State Budget Talks and Effects of a Late Budget to Providers

As of today, budget talks are still ongoing. The General Assembly is looking at pensions, online gaming, and privatizing/modernizing the state liquor store system for revenue. The governor is still looking for property tax reform, possible personal income tax increases, and an extraction tax. If the governor and the General Assembly cannot come to an agreement, the General Assembly has indicated that they will pass and send the governor an on-time budget by the June 30 deadline.

If this occurs, one of two things can happen. One, the governor signs the budget bill on time and the General Assembly will go home for the summer, or two, the governor receives the bill and within ten days he may to decide to sign the bill, line item veto parts of the bill, or veto the bill entirely. If the governor decides to use his veto power, then there will be a late budget and the governor and General Assembly will go back to the negotiation table.

In a late budget scenario, our providers will not be able to plan effectively. Member providers may not have sufficient cash balances to provide services to clients, pay staff, and to pay day-to-day expenses. In most instances, when there are state funding delays, providers have to draw against their lines of credit. In today’s tough economic environment, providers are not as financially strong as they were the last time the Commonwealth had a late state budget, so providers will have more difficulties staying solvent.

RCPA is asking members to use the RCPA policy paper and contact your legislators and the governor to tell them it is imperative to pass an on time budget, and if they do not, how it will affect your business and the services you provide to residents of the Commonwealth.

Questions? Contact Jack Phillips, RCPA director of government affairs.