The standoff over Medicaid funding in the Virginia Statehouse isn’t likely to be resolved soon. Gov. Terry McAuliffe and his Democrats who control the state Senate won’t let a budget pass unless the Republicans in the House of Delegates relent and allow an enormous expansion of Medicaid eligibility.
As important as it is to hold the line on this fight, it diverts all eyes from the other budgetary problem: The state’s spending is out of control.
Tipping the scales at $96 billion, the proposed budget sets a record. Once adopted, it would go into effect when the new fiscal year begins on July 1 and cover state operations for the next two years. Only four years ago, sensible taxpayers were outraged that the tab for the state’s biennial budget had grown to $78.6 billion. Two years later, the budget was up to $86 billion for fiscal years 2013 and 2014. Mr. McAuliffe and Virginia’s profligate lawmakers, Republican and Democrat alike, now think the state should add $10 billion to the irresponsible and bloated budget.
That’s a growth of 11 percent for the state government in just two years, even though the rate of inflation was 2.9 percent and personal-income growth topped 4.5 percent over this same period, as estimated by the Department of Commerce. Thus, Mr. McAuliffe calculates that the government should grow 244 percent faster than taxpayers’ income.
His scheme guarantees that taxes will be raised (again) to cover the never-ending rise in the cost of government. Higher taxes will discourage businesses and families from relocating to Virginia. Some existing businesses will flee to low-tax states, leaving a smaller tax base and kicking off a vicious cycle in which the legislature will authorize more tax increases to generate more revenue to fund the wasteful ways. Pretty soon the Old Dominion will look no better than Maryland and California.
The deadlock in Richmond over whether to expand Medicaid could be a blessing in disguise. Responsible legislators have time on their hands and should spend it to study the budget and look for places to dice, splice, shave and slice.
The governor, for example, requests an increase in corporate-welfare handouts from $110 million to $136 million over the next two years. Mr. McAuliffe further wants to subsidize technology companies by $22 million through the Innovation and Entrepreneurship Investment Authority. State giveaways to lure the movie industry to Virginia are scheduled to increase from about $2.5 million annually to $12.5 million a year.
There are plenty of ways to economize with the Department of Conservation and Recreation, which is to receive a 56 percent increase for its operating budget. Taxpayers will annually spend $4 million to subsidize art and another $4 million to build bathrooms in the homes of Virginia residents, often in vacation cabins at fishing spots near the shore. The General Assembly managed to tuck in a $5.9 million budget increase for itself over the next two years.
While the Medicaid standoff continues, the legislature must go line-by-line through the governor’s spending requests to delete the millions promised to wasteful and crony schemes. It’s called doing the right thing.