2017 Session

Budget Amendments - HB1500 (Governor's Veto Explanation)

I have completed my review of House Bill 1500. This budget represents a number of significant accomplishments; most important, it addresses the revenue shortfall and is balanced in a manner that protects public education and other core services that are important to a growing economy and a high quality of life.

Together, in this budget, we kept the promise to prioritize compensation increases for our dedicated state employees and state-responsible local employees. I am also pleased that we worked together to adhere to a conservative revenue forecast. This fiscally prudent action, along with adoption of a Revenue Cash Reserve to guard against short-term revenue shocks, will help to ensure that the Commonwealth has the capacity to address potential negative impacts from sequestration or other potentially threatening federal actions, as well as the possibility of other economic uncertainties.

Overall, this budget represents more areas of agreement than disagreement. That said, I remain disappointed that we could not agree on critical issues for the future of our Commonwealth, like investments in cybersecurity, workforce development, and solar energy. I also regret that this budget does not include the revenue for the lifesaving benefits that Medicaid expansion would generate for our Commonwealth.

This budget achieves most of the major objectives I proposed to you and I am proud to sign it. However, pursuant to Article V, Section 6, of the Constitution of Virginia, I have vetoed four items, vetoed one unconstitutional provision, and noted a sixth provision I believe is unconstitutional and unenforceable. The summary below describes each of these actions.

                                                                                                                                      Respectfully submitted,

                                                                                                                                      Terence R. McAuliffe


Summary of Vetoes and Other Actions

Item 125, page 94 – VEDP Language
Action: I view this provision to be unconstitutional.
            Terence R. McAuliffe April 28, 2017

The reenrolled budget includes language authorizing the Comptroller to withhold general fund appropriations in the amount of $1.5 million from the Virginia Economic Development Partnership (VEDP) and to disburse the funding only as directed by the Chairmen of the House Appropriations and Senate Finance Committees following the chairmen’s receipt and evaluation of certain plans. However, the Virginia Constitution prohibits the General Assembly from delegating final legislative authority regarding budget or other enactments to a committee composed of a subset of the members of the General Assembly. Accordingly, I will not execute this provision as written, but I will work with VEDP and the committee chairmen to ensure VEDP submits the plans outlined in Item 125 R.1. and 2. in a timely manner.

Item 144, page 154 – Cybersecurity Scholarships
Action: I veto this item and, consistent with the November 1, 1996, Supreme Court decision, Gilmore vs. Landsidle and Jamerson, it will return to its original enactment in Chapter 780 of the 2016 Acts of Assembly.
            Terence R. McAuliffe April 28, 2017

The reenrolled budget eliminates a $500,000 general fund appropriation in FY 2018 and the related governing language for the cybersecurity public service scholarships program approved by the 2016 General Assembly and included in Chapter 780, 2016 Acts of Assembly. This program is intended to strengthen the state's ability to recruit cybersecurity talent by awarding scholarships to individuals who would work for the state upon completion of their cybersecurity academic program. Given the great amounts of sensitive information held by the state, and the difficulty experienced by state agencies when competing with the private sector for individuals with experience in protecting information technology from cyber-attacks, this program is vital for the state to continue defending itself from hackers and criminals. My veto will restore this appropriation and return it and the related language to its original enactment in Chapter 780, 2016 Acts of Assembly.

Item 306, page 280 – Medicaid Settlements
Action: I veto this item.
            Terence R. McAuliffe April 28, 2017

The reenrolled budget allows informal appeals agents at the Department of Medical Assistance Services to close an informal appeal based on a settlement between the parties up to $250,000 without legal review by the Office of the Attorney General (OAG). The removal of the OAG’s legal review could result in inconsistent settlement policy. The OAG should review and approve all settlements of claims of the Commonwealth pursuant to § 2.2-514 of the Code of Virginia.

I veto this language as it is new language not included in Chapter 780, 2016 Acts of Assembly. It is not related to an appropriation or a condition on an appropriation, therefore, it constitutes separate legislation.

Item 306, page 286 – Medicaid Expansion Language
Action: I veto this unconstitutional provision.
            Terence R. McAuliffe April 28, 2017

I veto Item 306.JJJ.4, which is unconstitutional. Item 306.JJJ.4 purports to condition, "all appropriations in this act" and to govern, "notwithstanding any other provision of this act, or any other law," such that no funds may be expended or appropriated to implement expanded coverage under the Patient Protection and Affordable Care Act.

Item 306.JJJ.4 violates Article V, Section 6(d), which provides the Governor line-item veto power in appropriation acts. By conditioning all appropriations in the budget on Item 306.JJJ.4, the Governor’s ability to issue a line-item veto is removed. I object to Item 306.JJJ.4 as a condition on Item 306, yet I am unable to reject it without also rejecting all of the monies appropriated in this budget bill. Under Item 306.JJJ.4, the General Assembly has attempted to entirely remove the Governor’s ability to reject an objectionable item, which is an unconstitutional overreach.

Additionally, Item 306.JJJ.4 violates Article IV, Section 12, which mandates that "[n]o law shall embrace more than one object," a constitutional prohibition on combining into one legislative act multiple provisions that separately may not each receive majority support. If the policy underlying Item 306.JJJ.4 were a separate bill, as it should have been, then I would have vetoed it and that veto certainly would have been sustained. The General Assembly has attempted to avoid that result by embedding that policy in the budget bill.

I vetoed this same provision last year and I communicated this same message. The Keeper of the Rolls did not print my veto. Once again, I must insist that this is an unconstitutional provision and I respectfully request that the enacted bill reflect my actions.

Item 436, pages 399 through 404 – Language relating to the Public-Private Transportation Act of 1995
Action: I veto this item and, consistent with the November 1, 1996, Supreme Court decision, Gilmore vs. Landsidle and Jamerson, it will return to its original enactment in Chapter 780 of the 2016 Acts of Assembly.
            Terence R. McAuliffe April 28, 2017

The reenrolled bill includes language that would extend public works contract requirements that presently pertain only to state-initiated transportation projects to include projects developed under the Public-Private Transportation Act (PPTA) of 1995. This could preclude vendors with union labor from participating in PPTA projects. Vendors involved with PPTA projects are typically national and international firms. Any restrictions on these vendors will reduce the possible benefits Virginia could reap from its PPTA projects.

My veto will remove this new restrictive language since it is likely to limit the number of companies willing to participate in transportation projects under the Public-Private Transportation Act.

I realize that my veto will return this item to its original enactment in Chapter 780, 2016 Acts of Assembly, and that it will nullify other provisions passed by the 2017 General Assembly to which I do not object. In order to implement those other provisions, I have asked my Secretary of Transportation to work with the affected parties and the appropriate General Assembly members to implement those provisions administratively.

Item 476, page 447 – Virginia Coalfield Economic Development Authority
Action: I veto this item.
            Terence R. McAuliffe April 28, 2017

The reenrolled bill directs the Virginia Coalfields Economic Development Authority (VCEDA) to provide up to $500,000 of its balances to the Lenowisco and Cumberland Plateau Planning District Commissions to support economic development activities in Southwest Virginia. Currently, the Lenowisco and Cumberland Plateau Planning District Commissions each receive $75,971 from the general fund in each year. Since the conclusion of the 2017 General Assembly, several communities in Southwest Virginia have expressed concern about the transfer of funds and requested a veto.

Further, the budget also provides funds for the Virginia Initiative for Growth and Opportunity in Each Region (GO Virginia). GO Virginia's focus is the creation of state financial incentives, technical support, and other assistance that will encourage collaboration for private-sector growth and job creation by business, education, and government entities in nine designated regions. Each region is developing a plan for spurring regional growth.

My veto removes the appropriation and corresponding budget language. I believe that the VCEDA funds duplicate efforts that can be accomplished through GO Virginia.