Rainy Day Fund Eyed to Attack Virginia's $1.5 Budget Deficit

RICHMOND, VA — Virginia Gov. Terry McAuliffe told lawmakers Friday he will use $125.1 million that had been reserved for state worker pay raises in 2017 to help fill the state's nearly $1.5 billion budget deficit, and also urged them to finally accept Medicaid expansion under the Affordable Care Act, or Obamacare.

"We could soften this budget shortfall significantly if Virginia agrees to expand Medicaid and accept federal dollars that remain on the table waiting for our decision," he said. "Those funds would go a long way in relieving some of the difficult budget actions that lie ahead."

He also wants to use about $378 million from the state's rainy day fund to soften the budget shortfall.

"Combined, these two actions could address more than half of our immediate problem in the first year of the biennium," McAuliffe said."Nevertheless, we cannot assume that the remainder of the fiscal fix will be easy or cheap. We must prepare ourselves for tough decisions ahead."

He announced a budget shortfall of some $1.2 billion in the two-year budget for July 1, 2016-June 30, 2018.

Virginia also has a shortfall of nearly $280 million for fiscal year 2016, which ended June 30, making for a $1.47 billion sum.

McAuliffe urged lawmakers to protect K-12 school funding.

That's probably doable, Republican leaders told the Washington Post. But Medicaid expansion, an area where the governor repeatedly has been rebuffed?

"I have to admire the governor's persistency on Medicaid expansion," Senate Majority Leader Thomas K. Norrment (R-James City) said. "If, in fact, Virginia had expanded Medicaid, the shortfall that we would have in revenues would have been exacerbated."

Photo: The Governor's Office