- Associated Press - Thursday, March 26, 2015

RICHMOND, Va. (AP) - Virginia Gov. Terry McAuliffe has signed a new state budget that includes pay increases for state employees, boosts cash benefits for welfare recipients and has more money for the governor to spend on economic development.

The Democratic governor signed the budget Thursday at the Capitol while touting his good working relationship with Republican leaders on the state’s spending plan. McAuliffe did not try to amend the mid-course correction to the state’s roughly $95 billion biennial spending plan that state lawmakers approved last month, as past governors have regularly done.

Speaking to reporters at a signing ceremony, McAuliffe said he didn’t think he needed to amend the budget because he had worked out differences in private with GOP leaders during the legislative session earlier this year.

“There were no surprises,” McAuliffe said. “I thought that should be rewarded.”

The GOP-controlled General Assembly did not include expanding Medicaid in its budget, which has been a top priority for McAuliffe and state Democrats.

Medicaid expansion is a key part of the Affordable Care Act and about half of the states have implemented it. Democrats say the mostly federally funded expansion would help the poor and the state’s health care system, Republicans say Medicaid expansion is financially unsustainable.

Virginia’s budget situation has brightened in recent months due to higher-than-projected revenues and other factors, which gave lawmakers more money to spend this year’s legislative session.

The new budget includes a 1.5 percent pay increase in the state’s share of teacher pay, and a 2 percent increase in the salaries of state police, state employees and college faculty. Low-income recipients of the Temporary Assistance for Needy Families program will get a 2.5 percent boost in their cash benefits starting in 2016.

McAuliffe has scheduled a Friday news conference to announce the bills he’s vetoing or will seek to amend. The governor vetoed six GOP-sponsored redistricting bills Thursday and said he plans to try to overhaul an ethics package that lawmakers passed in the final minutes of the 2015 legislative session.

State lawmakers are due back in Richmond to consider McAuliffe’s vetoes and amendments on April 15.

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