General Assembly will not pass the budget by end of session

I believe there may be a misunderstanding here among some regarding the Medicaid expansion issue and the budget impasse (we have had these before in recent history in 2004 over Gov. Warner’s state sales tax increase request and in 2014 with Gov. McAffile and the Medicaid issue then as well). Both were resolved in an extra called session by the then sitting Democratic governor prior to the June 30th fiscal year deadline.

The issue as I understand it today is NOT over medicaid expansion or it’s “rejection” but rather whether the House version that calls for expanding Medicaid under the Affordable Care Act is passed or the Senate’s version that does not rely on the initial ACA infrastructure of federal subsidies. The House plan is far more cash flush based on the immediately available federal grant hits to the tune of around $370 million.

The House budget version, not missing a beat, immediately allocates this so call “free” cash bonanza into incremental budget line spending for schools, state employee raises and other priorities setting in effect new spending baselines downstream potentially as well in the local counties. This is the real incremental whami to the “free” ACA cash as it will have large impacts at the local budgeting 2018 baseline levels currently being developed and bake in potential local county downstream incremental spending increases.

Once a county budget spending line item goes up (then when NOT if the ACA money goes away) it will have set in place new baselines potentially requiring new revenue sources to backfill shortfalls. In my opinion this is almost inevitable unless you believe in the tooth fairy and think county administrators and supervisory boards will be proactively reducing these new inflated spending baselines of their own volition!

The Senate version doesn’t reject Medicaid per se but simply uses a different budgetary funding set of mechanisms to underwrite its operational funding that does not rely on the ACA legislation and associated Congressional ACA subsidies. So what the Medicaid question here really is, I believe (perhaps somewhat simplistically), is how do you want your expansion, with ASC funding or not? There is NO not at all option under discussion.

The non ACA funding being pushed by the Democrats might have less fiscal pain up front (but they are immediately setting that advantage aside by adhering to their spendthrift ways) and the Senate version may have more immediate upfront cost impacts but greatly ameliorates the risks of growing downstream county budgets that would likely in the near future have to be backfilled with new revenue shortfall taxation in my opinion. I believe the voters are largely confused about the options under consideration here and there hasn’t been much concerted effort by the state’s legislators (of either party) to help them to grasp the choices.

Just another example of what happens when the democrats throw a tantrum, and toss out experienced delegates for unqualified hacks like Lee Carter and Elizabeth Guzman. In a democracy, we get the government that we deserve.