Key General Assembly committees advanced proposed revisions to Virginia’s two –year budget Sunday that would open a mothballed state prison in Grayson County, provide state funding for teacher pay raises, and set conditions for a potential expansion of Medicaid.

Republican-controlled budget committees from the Senate and House of Delegates produced plans that build upon Gov. Bob McDonnell’s amendments to the state’s two-year, $86.5 billion budget. McDonnell in December asked lawmakers to direct additional state revenue toward some of his top policy priorities when they revise the budget that expires June 30, 2014.

Both budget committees approved funding to open the River North Correctional Center, a 1,024-bed facility near Independence. The prison was completed in 2010, but the state has kept the facility mothballed due to budget constraints while spending more than $700,000 a year to maintain it.

McDonnell’s administration has said that opening the facility would employ 325 people, ease overcrowding in other prisons and enable the transfer of some state-responsible prison inmates being housed in local jails.

The Senate Finance Committee backed McDonnell’s proposal to spend $14.3 million to open the facility next January.

The House Appropriations Committee called for a more aggressive timeline, proposing an additional $3.7 million to open the prison in October.

Sen. Bill Carrico, R-Grayson County, the newest member of the Senate Finance Committee, questioned whether the state could hire and train a staff in time for an October opening. But Carrico said he was happy that both budget committees approved funds to open the prison.

The House committee unanimously approved its budget plan . But a partisan clash in the Senate over expanding the Medicaid program for the poor threatens to keep a budget bill from passing in the chamber later this week.

The House and Senate are scheduled to vote on their respective budget plans Thursday and negotiators from the two chambers will attempt to reconcile differences before the legislature’s scheduled Feb. 23 adjournment.

All five Democrats on the 15-member Senate Finance Committee voted against the panel’s budget package Sunday, largely because it would delay a decision on Medicaid expansion under the federal Affordable Care Act until the 2014 General Assembly session. Democrats occupy half of the Senate’s 40 seats, enough to block passage of a spending bill.

The House and Senate committees approved budget amendments that would condition Medicaid expansion on federal approval of reforms that improve service and contain costs. The General Assembly would have to approve the expansion once those contingencies are met. The House plan includes an escape clause that would allow Virginia to roll back Medicaid expansion if the federal government retreats from its funding commitment.

Under the Affordable Care Act, the federal government will cover the full cost of expanding Medicaid eligibility to individuals with income below 133 percent of the federal poverty level for three years beginning in 2014, and then gradually reduce its funding share to 90 percent by 2020. A U.S. Supreme Court ruling last year gives states the ability to opt out of the expansion.

Sen. Janet Howell, D-Fairfax County, said delaying Medicaid expansion is “morally wrong.”

“We must not be depriving over 300,000 Virginians of health care,” Howell said before the Senate committee’s vote.

Sen. John Watkins, R-Powhatan County, said he has “worked to try to see that the expansion takes place.” But he warned Democrats that voting against the budget bill would weaken the Senate’s negotiating position with the House.

Sen. Emmett Hanger, R-Augusta County, who chairs the Senate Finance subcommittee on health and human resources, said he will try to work out an agreement with Democrats before the full Senate votes on Thursday.

“We’re learning more every day that, in my judgment, puts a positive spin on why we should move forward” with expansion, Hanger said.

Both committees included pay raises for state workers, college faculty and school teachers in the budget plans they produced Sunday.

The existing budget already includes a 2 percent raise for state workers that would take effect in August. The Senate plan would increase the raise to 3 percent. The House plan includes $17.3 million to adjust pay for senior employees whose salaries lag behind the pay given to newer hires. Both plans would give 3 percent raises to college faculty.

The House and Senate plans also include funding for the state’s share of a 2 percent pay raise for teachers, which McDonnell proposed in December, and both included funds to provide the same salary increase for school support staff.

Both budget committees agreed with McDonnell’s plan to divert $49 million from the state’s general fund — which pays for services such as education, public safety and health care — to boost funding for transportation. That move would increase the portion of the existing state sales tax that goes to transportation from 0.50 percent to 0.55 percent.

McDonnell proposed the shift as part of a broader, long-term transportation funding package, which will come up for votes in the House and Senate this week. The Senate previously has resisted efforts to divert a greater portion of the existing sales tax to transportation.

The House budget contains funding to help public schools with security needs, a response to the December shootings in Newtown, Conn. The House plan includes $1.7 million for a grant initiative to help localities fund police resource officers in public schools, an increase of $1.3 million. The Senate plan would put $1 million into the program.

The House plan also would launch the first phase of a five-year, $30 million grant program for security infrastructure projects in public schools. School divisions would be able to apply for grants of up to $100,000 and would have to provide a 25 percent local match.
– Michael Sluss