STATE HOUSE UPDATE
As the General Assembly moves closer to the final day of the 2014 Legislative Session a few key issues remain unresolved, chief among them the state’s Operating Budget.
While both the House and the Senate have passed the state’s $39 billion budget plan, neither has yet passed the other chambers’ version – a mandatory step before the legislation becomes law. A conference committee has been established to help iron out the differences before the session adjourns Sine Die on Monday, April 7th.
Passing a balanced budget for the next fiscal year is the only legislative action that the General Assembly is constitutionally obligated to enact during the 90 day session.
As amended by the House Committee on Appropriations, the FY2015 Operating Budget:
- Maintains the state’s Rainy Day Fund at 5% of General Fund revenues;
- Provides enough funding to limit tuition growth to 3% at the state’s colleges and universities;
- Constrains spending to 3.1%; and
- Reduces the structural imbalance by $150 million.
Among the points of contention is a budget amendment passed by the House of Delegates that would allow the state to use eminent domain to seize the property of any film production company that has received more than $10 million in tax credits and terminates operations in the state.
The amendment, drafted by Delegate Bill Frick, is mostly directed towards the makers of the popular Netflix series, “House of Cards,” who threatened to leave the state for its third season if it does not receive additional tax credits. A bill to increase the state’s Film Production Tax Credit was heard in the House Ways and Means committee. The legislation has already passed the Senate.
Another issue still being debated is the Governor’s minimum wage proposal. The House of Delegates heavily amended the bill, and yesterday the Senate Finance Committee added additional amendments including a longer phase-in period to achieve the $10.10 an hour level. The amended version that has emerged from the Senate committee includes:
- A phased-in increase to $10.10 per hour beginning with an increase to $8 by January 1, 2015, $8.25 on July 1, 2015; $8.75 on July 1, 2016, $9.25 on July 1, 2017, and $10.10 on July 1, 2018.
- No automatic increased linked to the rate of inflation were included.
- Wages for tipped workers are set at $3.63 identical to the proposal passed by the House of Delegates.
Senate Finance Committee Chairman Senator Thomas Middleton had insisted that if the state’s minimum wage is increased, that the reimbursements for employees who care for developmentally disabled people should be increased as well to keep pace with their current levels. The state currently reimburses those caregivers at 36% above the minimum wage. Under the approved bill, those caregivers will see flat percentage raises of roughly 2% in 2015 and annual increases of 3.5% in 2016-2018.
As the phased-in period appears to be the most significant difference between the House and Senate version (pending additional amendments from the floor of the Senate), it is very likely that a compromise will be reached and a minimum wage bill will be enacted.
We will continue to monitor the budget and other pertinent issues during these final days of the legislative session and will provide updates as necessary. With the session ending on Monday, no State House Update will be published until the dust settles on Sine Die. We will strive to provide you with an oversight of the 2014 General Assembly session immediately after the session ends as practicable.
As always, if you have any questions or concerns, please feel free to contact me.
Donald C. Fry
GBC President & CEO