- Associated Press - Sunday, February 3, 2013

RICHMOND — State workers, public educators and Virginia’s disabled were big winners in the House and Senate budgets advanced Sunday by the budget-writing committees of Virginia’s General Assembly.

But a partisan spat erupted in the Senate over the expansion of Medicaid eligibility, which could mire the budget for weeks or more in profound and protracted differences for the second year in a row.

State employees, school teachers and support staff, college faculty and local constitutional officers would receive a pay raise of 3 percent on average. That’s 1 percentage point more than the previous proposal.

Part of that would give state agencies the ability to combat “salary compression” for senior employees, which results when starting pay to attract new hires grows faster than pay for senior staff, creating salary stagnation that makes experienced employees easy to hire away.

The House budget also provides $6 million and the Senate budget provides more than $12 million in “cost of competing” money to help school districts in suburban localities in Northern Virginia enhance pay for support staff and prevent out-of-state and private employers from poaching them. Gov. Bob McDonnell had eliminated all the funding in the budget he submitted in December.

Both budgets provide about $13.5 billion for kindergarten through high school, including $53.5 million for the 2 percent teacher pay raise. There’s another $9 million for support staff such as librarians and teachers’ aides. But to qualify for the money, localities would have to match the state’s funding and provide another 2 percent pay boost of their own.

The House budget establishes a five-year, $30 million fund to help school divisions buy equipment to enhance security in the wake of December’s shooting that killed 20 children and six staff at an elementary school in Newtown, Conn. That would allow localities to submit competitive bids for grants as high as $100,000 each to beef up campus safety and security measures. Local governments would have to provide a match of at least one-fourth of the state grant.

In contrast, the Senate budget provides only an additional $1 million for school resources officers and $125,000 to improve school emergency-response training.

The biggest sticking point in the Senate, however, is Medicaid.

Finance Committee Democrats objected to putting conditions on expanding Medicaid, something Sen. Janet D. Howell, Fairfax Democrat, called “morally wrong.” The budget advanced on a 10-5 party-line vote with Republicans voicing concerns that a deadlock in the evenly divided 40-member Senate later this week could weaken the chamber’s negotiating position with the House of Delegates.

Neither House nor Senate budgets specify a dollar amount for expanding Medicaid under federal health care reform laws. Instead, both condition the expansion on federal acceptance of stricter Virginia criteria and cost-containment reforms, federal funding of the expansion and final General Assembly approval in 2014.

Among the reforms both budgets seek in exchange for approving expansion in Virginia is assurance that benefits would be similar to those provided by commercial insurers.

The House budget was more explicit, directing the Department of Medical Assistance Services to seek expansion Medicaid eligibility for those within 133 percent of the federal poverty level, or about $30,600 for a family of four. It advanced on a 22-0 vote.

As expected, some of Mr. McDonnell’s transportation funding reforms survive: The House and Senate committees, both ruled by Republicans, include in their budgets a shift of a 0.05 percent share of existing state sales tax collections — or an additional $49 million — to the Highway Maintenance and Operating Fund.

That has created another partisan schism that threatens to hold up passage in the Senate, where Democrats decry it as a raid on funding for such basic state services as public schools, public safety and health care.

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