Brief Notes on the HRCC Conference Call

Just finished a conference call with the HRCC regarding their FY 2011 budget proposals.  Lots of good news in here, mostly regarding the fact that the Senate version of the bill is structurally close to the House version.  McDonnell’s “secret meetings” did their job, eh?

House Republicans were able to close the $2 billion gap in the budget in part by:

* Suspended one of the SOQs (planning period) saving $185 million
* Putney bill saved $270 million this year
* Net is a $50 million cut to revenue to the VRS, but substantial structural changes were made in biennium, $720 million in cuts
* Did not touch higher ed (already cut by 29% — 2006 funding levels)

The Senate did the car tax much like the House, but were a bit more generous with K-12.

Additional highlights:

* $3 billions in savings by reforming the VRS over the next 10 years; employees benefit in better times with raises (no raises over the last 4 years).
* Did not play with car tax relief.
* No state park closures.
* Specific cuts to educations are replaced with flexibility/block grants.
* No cut to personal care.
* Fewer cuts to PPA’s — taking advantage of leveraging.
* House budget did not ratchet down eligibility for FAMIS (Family Access to Medical Insurance).

House restored 80% of the loss from LCI — which is a sigh of relief for localities.  House leadership also signaled that it was they — not McDonnell — who approached the Governor’s office about coming to terms with the budget.  Governor McDonnell was providing direction and leadership… happens all the time (at least when it’s asked).  Apparently, with the Senate budget coming into such close sync with the House budget, bringing the two budgets together will not be the once-Herculean task it was feared to be about a week ago.  As for a timeline, everyone is looking towards a 13 March adjournment due to the car tax issue being resolved.

Things that conservatives should be looking for:  the budget is balanced without a tax hike or the Kaine fees, there are structural change that will pay dividends down the road, rebuilding the rainy day fund, still some pork spending in the budget still, but the majority of the problems with the Governor’s (Kaine) Budget have been resolved.

As for 2011… we have addressed all those issues in the House budget, and the “cliff effect” for 2012 is largely resolved in the House budget.  With the Senate budget and the Governor’s budget, we’ve smoothed out those problems for FY 2012, with $550 million saved in VRS adjustments/reforms in 2012.

On jobs and the economy — about 10 to 12 bills came through Appropriations, and $50 million was set aside for economic development, which will enable the Governor to reach out to businesses to either relocate or find new ways to expand within the Commonwealth.

(crossposted at

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