What you need to know: Virginia’s 2016 budget in the wake of proposed federal cuts

*Editor’s Note: This week, The Daily WRAG is excited to bring you commentary on the recently released 2016 federal and state budgets from leading fiscal policy experts. What issues should you be concerned about in your jurisdiction? How might the proposed budgets affect your grantmaking priorities? Check in this week for an overview of the federal, District, Maryland and Virginia budgets and their implications for some of the most pressing social issues affecting our region.

Today, Michael Cassidy, president of The Commonwealth Institute for Fiscal Analysis, gives us his thoughts on how the U.S. House and Senate budget proposals may affect Virginia:

by Michael Cassidy
The Commonwealth Institute

Further cuts to federal investments in public services, as proposed in both the House and Senate budget plans, will hurt our local economy and do so on the backs of the state’s most vulnerable. That’s because Virginia relies heavily on federal help to meet the needs of our communities and our people:

  • Despite the bright spots in the national economy, Virginia has still not fully recovered from the recession and earlier federal budget cuts. The number of unemployed Virginians is still 70 percent above where we were eight years ago, and more Virginians still need help meeting their basic needs. In February, more than 856,000 people relied on the Supplemental Nutrition Assistance Program (SNAP) to help put food on the table. That’s a 67 percent increase since the same month in 2007.
  • As Virginia’s economy regains its footing, federal assistance is vital.  For example, the state is expected to receive $102 million in 2016 to help women and infants get the nutrition they need. Likewise, federal funds will help us support struggling communities and provide affordable housing for low-income families: through $430 million in housing vouchers and an additional $50 million community development block grant.
  • Our schools rely heavily on federal funding, too, especially to make up for recent state cuts. In 2016 our school divisions are expected to receive almost $261 million to help students in poverty get ready for college and careers, and $285 million to help teach students with disabilities.

Under either the House or the Senate budget plans, all of these services could face deep cuts.

What’s more, these two plans would put health care out of reach for hundreds of thousands of Virginians by eliminating the tax credits available through the federal marketplace for private insurance, as well as cutting Medicaid and changing the way it’s funded. Removing the tax subsidies alone would threaten health care for the 319,000 Virginians who have gained coverage through the federal marketplace this year. On top of that, the proposed changes to  Medicaid would inevitably result in less funding and fewer people receiving coverage.

Given the state budget landscape, there’s little hope that Virginia’s General Assembly would make up the difference in the wake of federal cuts. The state just had to fill a $2.4 billion shortfall last fall and relied heavily on budget gimmicks and deep cuts to do it.

With families still struggling across Virginia and the state unwilling to invest in the things that we know strengthen the economy, we cannot bear further cuts at the federal level. At a time when Virginia’s families need Congress to continue making strong investments in education, health care, and family supports like nutrition and housing, the House and the Senate budget plans would do great damage to the commonwealth.

Michael Cassidy is the president and CEO of The Commonwealth Institute for Fiscal Analysis, a nonprofit think tank focused on providing independent research, analysis and public education on budget and tax issues, with emphasis on the impact of fiscal decisions on low- and moderate-income Virginians. He also worked for several years as a budget analyst at the U.S. Office of Management and Budget where he handled policy development, regulatory and legislative review and budgetary process and execution for a wide variety of social policy programs.

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