RICHMOND, Va. (AP) — General Assembly budget negotiators agreed late Friday night on revisions to Virginia's state budget, including a tentative compromise on Medicaid expansion that became a bargaining chip in a high-stakes legislative battle over transportation funding reforms.
The dozen senior legislators — six senators and six delegates — reached a final deal on changes in the final year of Virginia's $88 billion two-year state government fiscal blueprint.
That puts the budget — including creation of a 12-member commission to oversee Medicaid reforms — up for final votes in the House and Senate just before the 2013 General Assembly adjourns on Saturday.
The Senate also faces a final vote on the transportation compromise.
The Medicaid issue was the biggest sticking point in the budget talks. It became linked to the transportation initiative when Senate Democrats conditioned their support for that legislation on written assurance from Gov. Bob McDonnell that he would not veto or amend the Medicaid agreement.
"We need to see the letter with his signature, and the logjam is broken," said Sen. Janet Howell, D-Fairfax County and one of the Senate budget negotiators. When the governor's letter had not arrived by late afternoon, the Senate adjourned without voting on the transportation bill.
McDonnell completed the letter and sent it to Senate Republican Leader Thomas K. Norment around 7 p.m. In it, the governor lauded the compromise but conspicuously left open the possibility of amending it later.
"It's what we were looking for," said Senate Democratic Leader Richard L. Saslaw of Fairfax County.
McDonnell on Wednesday had admonished negotiators not to expand Medicaid until major state and federal reforms are achieved, angering Democrats who favor prompt expansion.
"I commend the conference committee for coming up with a concept to ensure that significant reforms are attained prior to any potential expansion of Medicaid," McDonnell wrote in the letter released late Friday.
He concluded: "I look forward to reviewing the final language that is agreed upon by the conferees when the budget reaches my desk."
The letter clenched a compromise the administration and Health and Human Resources Secretary Dr. Bill Hazel had negotiated over the past two days.
Democrats hold 20 seats in the 40-member Senate, giving them just enough clout to kill the $880 million-a-year transportation bill — the first significant funding overhaul for Virginia highways and transit in 27 years — if they don't get their way on Medicaid.
McDonnell spokesman Tucker Martin contended that the Medicaid expansion letter and transportation are unrelated.
"Both issues are being considered on their own merits, by themselves," he said in a written statement.
The Senate and the House of Delegates offered substantially different approaches to Medicaid in conflicting versions of the budget. The Senate favored expanding the program to an additional 400,000 uninsured Virginians just over the poverty level, provided the state finds substantial savings and reforms and the federal government agrees to them. The House budget called for deferring expansion until those reforms are in place.
The compromise would establish a 12-member Medicaid Innovation and Reform Commission consisting of five members of the Senate Finance Committee, five members of the House Appropriations Committee and — as nonvoting members — the state secretaries of finance and health and human resources. The commission would determine when enough reforms were in place to begin expansion.
"They would be the approval authority," said House Majority Leader Kirk Cox, R-Colonial Heights and a member of the House budget negotiating team.
The commission would meet every other month, starting this summer. Any commission action would require the vote of at least three representatives from each chamber.
"That is a compromise I think everyone should be comfortable with," Howell said.
How well it will be received by the two-thirds GOP majority in the House remains to be seen, however.
"I would hope we would all stand firm in the House position," Del. Ben Cline, R-Rockbridge, told his colleagues on the House floor.
Under President Barack Obama's health care overhaul, states have the choice of whether to expand Medicaid, a federal-state program that helps pay for health care for the indigent, disabled, elderly, blind and low-income families with children. The federal government said it would pay the full cost of expansion for the first three years and 90 percent of the costs after that.