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Va. budget stalemate could end in shutdown

Saturday - 3/8/2014, 2:17am  ET

WASHINGTON - A fight over the expansion of Medicaid in Richmond is tying up passage of the $96 billion Virginia budget, and the stalemate could result in the first shutdown in state history if lawmakers don't agree to a deal by July.

The two sides are close to reaching a deal on the two-year spending plan, however, Republicans are asking for a "clean budget" that doesn't include an expansion of Medicaid that would insure an additional 400,000 Virginians. Gov. Terry McAuliffe says he will call lawmakers back to Richmond on March 24 for a special session to continue budget negotiations.

"There's no alternative. There has to be a budget or you could have a government shutdown in Virginia for the first time," says Geoffrey Skelley, political analyst with the Center for Politics at the University of Virginia.

Expanding Medicaid was a campaign promise made by the governor, and he's pushing to make it happen.

But Republicans fear if the expansion goes through, and the federal government cuts future funds, that Virginia lawmakers will be forced to impose new taxes to pay for the expansion.

House Republicans offered to extend the current session in order to hammer out a deal. But Senate Democrats shot that offer down. Skelley says Democrats killed the idea in order to put pressure on House Republicans, basically blaming Republicans for there not getting a budget deal.

Skelley says both sides will get blamed if there's no deal, as the new fiscal year approaches July 1.

This isn't the first time lawmakers have needed more time to negotiate a budget -- lawmakers extended the session to haggle over the last two-year budget.

Despite the Washington-like posturing, a government shutdown is a long way off in Richmond, he says.

"But that is something that looms out there if there continues to be a complete inability to find some kind of compromise over the Medicaid issue," Skelley says.

A special session could last indefinitely given the deadlock inside the Virginia Capitol.

"How long it will take to hammer out an agreement is unknown at this point," he says.

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