Dear Virginians, Governor McDonnell’s massive, largest-ever Virginia tax increase for road and transit (other general taxes were also increased) passed 60-40 in the House of Delegates (Republicans: 35 yea, 33 no) and 25 to 15 in the State Senate (Republicans: 8 yea, 12 no)

My earlier emails addressed many problems with the many tax increases, lack of transparency, questionable regional authorities, political construction priorities, and funding inequities. This email will address the backroom “deals” that if left unchanged will lead to an even higher tax burden (than even the transportation bill) through Medicaid expansion. PLEASE SEE ACTION ITEMS AT END OF THIS EMAIL!

HB 2313, the Governor’s transportation bill introduced by Speaker Bill Howell (R-Stafford) is now projected to “produce” (from our pockets) from $880 million to $1.2 Billion per year after the conference committee changes. However, one senator informed me that the Senate Finance Committee staff was instructed by Republican leaders to produce the lowest revenue figures possible to “soften” the actual tax blow to the public.

New revenue streams for road construction were touted to justify the massive increases. However, when I asked Sen. Barbara Favola (D-Arlington) on an ABC News Channel 8 TV program this past Monday what new interstates or primary roads would be constructed, she answered, METRO!

VOTE TRADING: MEDICAID EXPANSION FOR TRANSPORTATION TAXES Sen. Favola confirmed my conclusion (also reported widely in the media) that the Governor signaled support for Medicaid expansion to garner more democrat votes for his transportation tax. On the same TV program, Senator Favola admitted that she disliked aspects of the Governor’s transportation plan such as the $100 tax on hybrid vehicles, but she voted for it anyway because she got what she wanted: Medicaid expansion. (Why any democrat would need to be persuaded to raise taxes is a mystery to me.)

A northern Virginia Democrat delegate personally told me that the Medicaid “agreement” was responsible for at least ten Democrat votes for the transportation bill in the House. And, Democrat Delegate Spruill spoke on the floor of the House of Delegates explaining that he trusted the Republicans and was satisfied that the Medicaid issue was worked out.

BACKGROUND On Feb. 20, Governor McDonnell wrote to Republican and Democrat Budget Conference members noting Medicaid currently takes up 21% of Virginia’s general fund budget, a 1600% increase from 1983 and pointing out that costs to state taxpayers will increase significantly even with federal support.

He stated that Medicaid reform “requires completing state based reforms, amending the ACA [Obamanocare] to provide more flexibility and waiver authority, creating state and federal assurances that the current or expanded program will not break the state budget or add to the federal debt, and facilitating reforms in the private sector health delivery system to reduce costs. ...”

He said, “I cannot and will not support consideration of an expansion of Medicaid in Virginia until major reforms are authorized and completed, and until we receive guarantees that the federal government’s promises to states can be kept without increasing the immoral national debt. To do so, would be irresponsible ... Doing anything that suggests that expansion can occur prior to substantial, long lasting, cost-savings will damage our efforts to reform the system.” The Democrats protested!

Two days later Gov. McDonnell wrote to the Republican Majority Leader assuring budget conferees with clever wording that he supported setting up a Commission to oversee agreeing to what democrats wanted, mainly adding 400,000 new recipients to the current 1,000,000 on Medicaid, one of the most, if not the most fraud-ridden federal program on the books.

Rank and file House and Senate Republicans were not made aware of Governor McDonnell’s “accommodation” letter until the Washington Post reported on it Saturday morning, but the Republican leadership of both chambers knew about it earlier as they were part of the deal cutting.

The Governor’s so-called “firewall” to protect Medicaid was to consist of a select commission of delegates, senators and two citizen members appointed by the same House Republican leaders who led the charge for higher taxes. The commission members are supposed to ensure that any proposed Medicaid expansion includes “reasonable limitations on non-essential benefits such as non-emergency transportation are implemented; and ... patient responsibility is required including reasonable cost­sharing.”

Such loose language is unacceptable because it is an open invitation to a lawsuit. Democrats know full well that any prospective Medicaid recipient can dispute in court the definition of “reasonable” with their claims defended by the ACLU and other attorneys who are funded with public money.

If a federal judge in Virginia can decide (as was done recently) that a prisoner can argue that the state’s refusal to pay for a sex change operation presents a reasonable claim of a violation of the Eighth Amendment’s prohibition against “cruel and unusual punishment,” you can be sure that a tax funded lawyer will successfully challenge a denial of Medicaid benefits. The Governor’s assurance that Medicaid expansion will not happen on his watch gives me no assurance. The skids have already been greased by the language in the budget and the health exchange legislation passed earlier in the session.

The Medicaid commission is nothing more than a paper tiger supposedly guarding taxpayers from a 40% increase in Medicaid beneficiaries in a federal program so riddled with widespread fraud that even the federal Government Accountability Office cannot begin to measure its full extent.

Delegate Ben Cline had earlier drafted a letter signed by 51 House members to the budget conferees, explaining that they wanted to wait until “significant reforms are put in place in order to reduce costs before we consider any expansion of Medicaid."

Unfortunately, the overwhelming number of these 51 members still voted for the Budget conference report with the much more liberal Medicaid provisions in it.

REQUESTS TO THE ATTORNEY GENERAL Delegate Ben Cline had asked Attorney General Cuccinelli on February 21, whether it was legal for the General Assembly to delegate its authority to a commission to decide on expanding Medicaid. The AG concluded such a commission cannot make decisions for the entire General Assembly. New budget language was then approved by conferees to finesse the AG’s objections, but the new language is so broad it offers no protection.

On February 26, 2013, I asked the Attorney General to review the new language subsequently approved in the conference report and advise me prior to the veto session whether the conference language delegating authority to expand Medicaid is constitutional.

I will keep you apprised of the AG’s response. I thought you should know the behind-the-scenes orchestrations that have led to this infamous Republican led tax hike and future expansion of Medicaid. Both of these measures violate principles critically important to our Republican base and constitutional conservatives. But even more important, they are examples of bad policy which threaten the future economic well-being of Virginia’s families and our Commonwealth. Here is my letter to Cuccinelli.

ACTION ITEMS: Urge the Governor to veto HB 2313 and portion of Budget (HB 1500) which expands Medicaid. If your delegate signed Del. Ben Cline’s letter opposing Medicaid expansion and voted for Budget (HB 1500) ask why. (See earlier links.)

Thank you.

Delegate Bob Marshall