Spectacular

Published February 28, 2014 by Bernie Niemeier

On a cold and snowy morning in late January, the Virginia Chamber of Commerce was forced to delay and shorten the program for this year’s Virginia Chamber Day at the Capitol.  Leaving my office, I slogged a couple of slushy blocks on foot to Richmond’s Omni Hotel.  The weather was anything but spectacular.

Inside the warmth of the hotel, I was pleased to see that attendance had held up pretty well.  A couple of hundred stalwarts from the business community were gathered, some in wet shoes and others in duck boots, for a luncheon keynote address by Gov. Terry McAuliffe.

Not unlike other successful politicians, our new governor can be substantially more engaging in a one-on-one conversation than from behind the podium.  Still, with the ugly 2013 election
largely behind us, McAuliffe now exudes a good deal more confidence as a governor than perhaps he did as a candidate — this is a good thing.

Our new governor extolled his “spectacular” secretarial appointments as a diverse crowd, mixing reappointments like Ric Brown, secretary of finance, with new faces, like Maurice Jones, secretary of commerce and trade.  As promised, the cabinet picks also come from across party lines — this also is a good thing.

McAuliffe extolled the “spectacular” assets of Virginia.  By my count the governor used the word spectacular more often than any other — at least five times in his first five minutes behind the podium. In concluding his remarks, he promised to be the commonwealth’s best salesman.  After all, he said, “I’m experienced at raising money!”

McAuliffe says he’s working hard across party lines to find common ground, finding what folks agree on and vowing to move forward.  Breakfast meetings every day at the Executive Mansion, receptions every night.  Rumors are that he’s thrown out the cheap booze and replaced it with the good stuff, paying out of his own pocket.  Given the allegations of past shenanigans at the Mansion, it’s good to have a guv who can do things on his own dime.

Still, it’s going to take more than throwing out bad whiskey to solve some of the problems faced by this year’s General Assembly. The fight over Medicaid expansion has opened a rift between the Republican establishment and the business community.  On one hand, the R’s are hewing to the anti-Washington party line that government can’t be trusted to pay for the expansion.  On the other hand, the business community knows that they’ve traditionally shouldered a disproportionate share of health-care spending.  Lack of Medicaid expansion has already cost Virginia at least $800 million in federal reimbursements through the remainder of the current budget cycle ending June 30.  This money cannot be recouped.

Furthermore, the Virginia Hospital & Healthcare Association estimates Virginia’s hospitals face an additional funding gap of more than $1 billion during the next two years because of  reductions in federal reimbursements if Medicaid is not expanded. 

It’s not as if Virginia doesn’t already rely on federal money for much of its economic health. When defense cuts are announced, politicians join hands across all party lines to help persuade Washington to spare the ax.  Whether it is entitlement spending, like Social Security, or defense contracts, we have long accepted federal money in a variety of ways without a litmus test for future solvency.

It’s also not as if Virginia is already overly generous in its support of Medicaid reimbursement. Virginia ranks 47th in the country in Medicaid services to people with intellectual and developmental disabilities and 48th in overall per-capita Medicaid spending.

This year’s General Assembly session is scheduled to end on March 8; with a special session it can be expected to conclude sometime in April.

Using recent years as an example, balancing the state budget will require monumental legislative effort.  By any measure, the millions (or billions!) in Federal Medicaid reimbursement could go a long way to helping Virginia with other priorities. Turning down these dollars only serves to subsidize programs in other states who accept them.

Medicaid expansion was a centerpiece of candidate McAuliffe’s economic plan for Virginia. Now that the election has been won, the governor’s challenge is to gain passage in a deeply partisan general assembly.

Success would be good for both parties — nothing short of spectacular.