In Virginia budget, McAuliffe pushing two percent raise for state employees

RICHMOND, Va. (AP) - Democratic Gov. Terry McAuliffe plans to propose a 2 percent raise for state employees when lawmakers return to Richmond on Monday for a special session in which they will try to pass a roughly $96 billion two-year budget.

McAuliffe spokesman Brian Coy said Sunday the raise would apply to virtually all full-time state employees and would go into effect in March 2015. Coy declined to say where the roughly $200 million for the raises would come from.

The GOP-controlled House's proposed budget contains a 1 percent bonus for state employees in 2015 and then a 1 percent raise in 2016, with some positions targeted for a greater salary increase.

In addition to debating proposed pay raises, lawmakers are set to reopen debates over Medicaid expansion.

The governor and the Democratically controlled Senate want a state budget that includes a Medicaid expansion plan that emphasizes the use of private insurers. Leaders in the GOP-controlled House staunchly oppose the plan.

The impasse over Medicaid expansion prevented lawmakers from passing a budget before the regular session ended earlier this month. State government could shut down if no budget is passed before July 1.

Expanding Medicaid coverage to low-income adults was a key part of President Barack Obama's health care overhaul. A ruling by the U.S. Supreme Court made expansions an option, and about half the states so far have opted to expand.

McAuliffe has made expanding Medicaid eligibility to as many as 400,000 Virginians his top legislative priority. The federal government has pledged to cover the full cost of expansion for several years and no less than 90 percent after that. McAuliffe has argued the state's cash-strapped rural hospitals can't afford to forgo that money.

The governor has spent the two weeks since the end of the regular session appearing at health centers around the state to promote Medicaid expansion. At a health clinic in Alexandria on Thursday, McAuliffe pledged that Medicaid expansion would occur this year, according to a video of his comments posted on the website Blue Virginia.

"We will get this done this year. You have my word on it," McAuliffe said. "I do not make promises lightly. If I put my word to it, you're going to get it."

But House Republicans have said they are equally dedicated to preventing Medicaid expansion. They have argued Virginia cannot afford a large-scale increase of Medicaid enrollees and should be wary about the federal government's promises to pay most of the costs associated with expansion.

Republicans have also proposed passing a budget without the expansion and considering it later. But McAuliffe has rejected the Republican's suggestion that the General Assembly pass a budget without Medicaid expansion and then hold a special session devoted entirely to the subject.

House leaders have spent the break between the regular session and the special session highlighting how uncertainty with the state budget affects those who depend on the money.

"The thing we're interested in right now is decoupling, because the local governments are waiting on our budget," House Speaker William J. Howell told reporters after meeting with McAuliffe on Wednesday.

A spokesman for Howell declined to comment on the specifics of McAuliffe's proposed pay raise for state employees.