Gov. Terry McAuliffe told local government officials Tuesday that spending for K-12 education will be the “No. 1 priority” of the two-year state budget he will introduce in December.
His pronouncement drew loud applause from 300 local officials gathered at the Richmond Marriott for the Virginia Municipal League’s annual awards banquet because local government is carrying most of the burden for public education in the state. The league represents 211 cities, counties and towns in Virginia.
McAuliffe took direct aim at the findings of a new report by the Joint Legislative Audit and Review Commission that said local spending on education — at 56 percent of the cost — is the 11th highest local share in the country, as the state has retreated on K-12 funding since the recession.
The governor estimated that local school systems have 5,000 fewer teaching positions than in 2008, despite growing enrollment, increasing numbers of students for whom English is a second language, and higher testing standards.
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“We’ve put three new burdens on and at the same time we’ve reduced by 5,000 positions,” he said. “That doesn’t work.”
McAuliffe offered few details of the budget he will present to the General Assembly money committees on Dec. 17, but he cited the need to further reduce Standards of Learning testing, lower class sizes, and invest in childhood education.
The governor also made clear he has not abandoned his effort to expand health coverage for hundreds of thousands of uninsured Virginians, using money state taxpayers already have paid under the Affordable Care Act.
“We’re forfeiting about $2.4 billion a year in federal funds,” he said. You put it in, you get it back.”
McAuliffe cited the financial stress facing rural hospitals — with 17 operating at a deficit — and looming cuts in federal reimbursements for indigent care, which were supposed to decline as states expanded eligibility for their Medicaid programs.
“Every rural legislator should be pushing for this,” he said after his speech. “At the end of the day, they’re the people most impacted.”
McAuliffe tried last year to expand coverage in his first year as governor, but was blocked by Republicans in the House of Delegates. He and allies in the Senate backed down in a budget stalemate in the face of a projected $2.4 billion revenue shortfall in the current two year budget.
The shortfall this year turned into a record $553.3 million surplus. The money already was committed by law to be deposited in the state “rainy day” fund and a water quality improvement fund, but McAuliffe said the surplus reflects the recovery of major revenue sources, particularly income taxes and recordation taxes tied to home sales.
“You can feel that we’re coming back,” he said, citing the state’s 4.5 percent unemployment rate, which he said is the lowest in the Southeast.
However, McAuliffe warned that the state economy continues to face threats from reduced federal military spending under budget sequestration as Congress prepares to address the debt ceiling next month and the federal budget in December, when a short term extension is due to expire.
“I’ve got to get through the sequestration (threat),” he said. “We’ve got to solve the health care issue.”