Monday’s legislative briefing on Virginia’s revenue projections has generated a great deal of heated rhetoric and wild headlines. But is the state really heading for a big revenue decline? Is the bond rating in danger? Can the governor keep spending money even if there is no budget in place?
Big questions that need answers. But overall, those reading Virginia newspapers were largely left without solid answers. Except those who happened to catch David Ress’ piece in the Daily Press.
On the question of the revenue shortfall…are the bad times coming fast? Eh, maybe not:
The problem, Brown said, was that 2013 saw big payments from capital gains Virginians realized when they cashed in stocks and bonds in 2012. This month so far looks like a return to more normal tax collection patterns, but the budgets now before both the House and Senate are based on total 2013 tax collections. Brown said several big business tax payments are due in the next few weeks, however.
So more money has yet to roll in. Until those figures are released…chill out.
On the idea that the state’s AAA rating could be among the casualties of shutdown…that ties-in with the governor’s constitutional responsibilities even if a budget is not in place:
The state constitution also says the governor has to make payments on state bonds, and to pay salaries of most elected officials.
Nice to see the political class has its paychecks guaranteed. But so, too, are the bond payments. So again…chill out and find a new talking point.
The stickier question is whether Gov. McAuliffe could find a way to keep some of the state’s lights on without a budget. That’s a mixed bag:
The committee’s staff lawyers said federal funds for a variety of welfare programs would probably still flow, however.
Federal laws, like those requiring states to disburse federal funds for food stamps and child welfare programs, would supersede the state Constitution, the lawyers said. Payments for Medicaid, the joint state-federal health insurance program for the poor and disabled, are also governed by federal law. The Affordable Care Act funds that House Republicans don’t want to accept are intended to expand Medicaid.
Pass throughs from the federal government represent a large chunk of annual state spending, and are the fastest growing part of the budget. As for the rest of the state’s functions, it comes down to constitutional interpretation:
Mark Vucci, a senior staff attorney for the General Assembly, brushed off arguments floated by then-Gov Tim Kaine during the 2006 budget crisis that he could authorize other spending,
Kaine’s view was that the Constitution’s requirement that governors faithfully execute state laws would allow him to spend money to keep essential state services running if the legislature failed to pass a budget. In the end, the General Assembly passed a budget that year with just a few days to spare.
Vucci said because the language saying the state can’t spend money unless the legislature appropriates it is so specific it would take precedence over the more general language about executing laws. That’s what Kentucky’s Supreme Court ruled a year after then-Gov. Ernie Fletcher kept the state government open after the 2004 legislature failed to enact a budget.
McAuliffe may believe he has the authority, and could march ahead, but the General Assembly could sue to stop him (though Chris Jones says there are “no plans” to do so).
We shall see.
In the meantime, the bluster over the budget and Medicaid expansion will continue for a while — June seems reasonable.
But the worthies will find a solution. Neither side wants to be tagged as the one who, for the first time, shut down Virginia’s government. As the April Christopher Newport poll on Medicaid expansion found, voters were confident a solution would be reached. If not, they will blame both sides for failing to get the budget done and they will blame Gov. McAuliffe most of all.
Now you know why Terry is saying, loudly and often, that the government will not shut down. It’s very much in his interest to see that it doesn’t, which also makes it very much in his interest to see that a compromise on the budget is reached before the June 30th deadline.
Update
There’s debt, and then there’s voter-approved debt. It appears as though the governor can make some bond payments without a budget, but not all. To see what he can and can’t do, refer to Article X, Section 9, paragraph B of the Virginia constitution:
If sufficient funds are not appropriated in the budget for any fiscal year for the timely payment of the interest upon and installments of principal of such debt, there shall be set apart by direction of the Governor, from the first general fund revenues received during such fiscal year and thereafter, a sum sufficient to pay such interest and installments of principal.
That’s for voter-approved debt. So there is a wad of bonds needing payment which, it appears, Gov. McAuliffe could not make payments.
And as to the payments for elected officials…that, apparently, does not include legislators. But does cover the governor, lt. governor, attorney general and state judges. Except that may be iffy, too (according to the presentation made to the Appropriations committee on Monday):
It is unknown whether a Virginia court would find that such things as salaries of statewide elected officials and justices and judges are constitutionally required to be paid. See Article V, §4 (Gov.); Article V, §14 (Lt. Gov.); Article V, §15 (Att’y Gen.); and Article VI, § 9 (Justices and judges).
So again…going over the budget cliff leaves a lot of unanswered questions. And that could mean loads of fun for lawyers.
