Former/two-term VA Lt. Gov. Bill Bolling is a conservative Republican and a Trump voter/supporter, but he definitely understands how Virginia’s government – including its budget, including the “rainy day fund” – works. For instance, this morning he posted the following analysis on his Facebook page, responding to Winsome Earle-Sears’ suggestion that Virginia “use its ‘rainy day’ fund to cover the cost of Medicaid in Virginia should the federal, so-called ‘One Big Beautiful Bill [sic – should really call it the Big UGLY Bill] increase the cost share paid by Virginia for the program.” As former LG Bolling correctly explains, Earle-Sears is badly misguided on this. Why? Here are some highlights, followed by the full Facebook post.
- “The purpose of the Revenue Stabilization Fund is to provide temporary funding for critical government programs in the face of a short term economic decline.“
- “The Revenue Stabilization Fund was never intended to provide long-term funding for ongoing government programs because these are one time funds. Once they’re spent, they’re gone.”
- “The balance in Virginia’s Revenue Stabilization Fund is currently $4.7 billion. That’s a lot of money, but it comes nowhere near to funding an anticipated Medicaid shortfall of $29 billion!”
- “But taking one time money out of the Revenue Stabilization Fund to try and cover this shortfall would be a very unwise choice. This is a long term, ongoing problem; not a short term, one time need.”
WHAT IS THE “RAINY DAY FUND” AND HOW SHOULD IT BE USED?
Here’s an opportunity for a little education on the state’s “rainy day fund”, which is actually known as the Revenue Stabilization Fund.
The Revenue Stabilization Fund is required by the Constitution of Virginia. It is funded by a dedicated percentage of budget surpluses, and any other funds the General Assembly may choose to put there.
The purpose of the Revenue Stabilization Fund is to provide temporary funding for critical government programs in the face of a short term economic decline.
The Revenue Stabilization Fund was never intended to provide long-term funding for ongoing government programs because these are one time funds. Once they’re spent, they’re gone.
Because of federal cuts to the Medicaid program that were included in President Trump’s Big Beautiful Bill, it is estimated that Virginia could face a shortfall of $29 billion in funding the state’s current Medicaid program over the next ten years. Lawmakers are rightly trying to decide how to fund this shortfall.
Against this background, the Republican nominee for Governor, Winsome Earle Sears, has proposed using the Revenue Stabilization Fund to help fund this shortfall. That’s a bad idea.
The balance in Virginia’s Revenue Stabilization Fund is currently $4.7 billion. That’s a lot of money, but it comes nowhere near to funding an anticipated Medicaid shortfall of $29 billion!
Plus, as noted above, the Revenue Stabilization Fund was never intended to pay for ongoing government programs over the long term.
If Virginia leaders are truly concerned about the adequacy of Medicaid funding, and they should be, their choices are limited.
They can raise taxes to cover these funding shortages.
They can redirect resources from other government programs to provide additional funding for Medicaid.
Or, they can adjust Medicaid eligibility guidelines and benefits to bring Medicaid expenses in line with the revenue available to pay for them. (This is what they should do.)
But taking one time money out of the Revenue Stabilization Fund to try and cover this shortfall would be a very unwise choice. This is a long term, ongoing problem; not a short term, one time need.
NOTE: Sears opponent, former Rep. Abigail Spanberger, has promised to protect Virginia’s Medicaid program, but she has offered no specific or detailed plan for how to pay for it.
P.S. Also, see below for a press release/statement about this from the Democratic Party of Virginia:
NEW: Sears Claims “Rainy Day” Reserve Can Cover Medicaid Cuts, Only There’s Not Enough Money and Lawmakers Oppose the Plan
Cardinal News: Virginia could see a $29 billion decrease in federal Medicaid […] Republican candidate for governor, has suggested tapping into the state’s $4.7 billion “rainy day fund” to cover the cost.
VIRGINIA – New reporting from Cardinal News details how Winsome Earle-Sears keeps claiming she can use Virginia’s “rainy day” reserve to cover the Medicaid cuts in the Trump tax bill she backed. However, Sears math doesn’t add up and Republicans, Democrats, and the Virginia Hospital and Healthcare Association pointed out the flaws in the suggestion and the devastating impacts of the cuts Sears has backed. Now her campaign is refusing to explain.
Sears has repeatedly praised the law saying it “does so many great things” while it will take healthcare away from 322,000 Virginians and force at least 6 rural hospitals to close.
“Instead of standing up to Trump’s devastating health care cuts, Winsome Earle-Sears’ has been lying to Virginians by pushing a fake solution that doesn’t add up at all – and now she’s refusing to comment on it. Sears owes Virginians real answers about why she backed Trump’s tax bill that will take healthcare away from Virginians and why she doesn’t have an actual plan to address it,” said DPVA Spokesperson Maggie Amjad.
