Youngkin touts Va.’s $4.7 billion cash cushion, downplays Medicaid, federal workforce changes

At a joint meeting of the Virginia Senate and House appropriations committees Thursday morning, Gov. Glenn Youngkin presented his final overview of the fiscal condition of the state of Virginia. He painted a rosy picture, with revenues coming out over forecast for fiscal year 2025 and a $4.7 billion cushion in rainy day funds.  Democrats, however, pushed back on the governor’s claim that no Virginia Medicaid enrollees would lose coverage under the new federal government requirements.  

Recently, Congress signed off on the reconciliation bill that includes new Medicaid work requirements for “able-bodied” adult enrollees. Starting in 2027, Medicaid recipients will have to work or volunteer, or be enrolled in school. Most Medicaid recipients already work, while lawmakers and hospital associations in Virginia have warned that if thousands of Medicaid recipients lose their insurance, it could have “ripple effects” including a strain on health care centers and passed-down costs to taxpayers. 

For months, state Democrats have said over 322,000 Virginians could lose health insurance, based on a state-by-state breakdown from the U.S. Senate’s Joint Economic Committee and previous CBO estimates released as the reconciliation bill made its way through Congress. The Congressional Budget Office estimated that approximately 4.8-5 million people could lose coverage.

“Changes to Medicaid are not taking coverage away from anyone, and I want to say that again, not a single Virginian is losing access to Medicaid or getting kicked off the program,” Youngkin said to reporters after his presentation on Tuesday. “Not 40,000 Virginians, not whatever number someone else is saying on a given day, no Virginians are losing their Medicaid coverage.” 

Secretary of Finance Stephen Cummings also said no one will lose coverage, but hospitals may face financial challenges, which he said they can absorb. Lawmakers were skeptical.

“I’m glad that you have confidence, but a lot of folks who are relying on us, especially to provide their health care, don’t feel confident,” Del. Candi Mundon King, D-Prince William, stated. King cited Medicaid changes in Arkansas, where 18,000 individuals lost their health care coverage when the state implemented work requirements in 2018.

Cummings would not comment on whether the administration would use its multi-billion dollar rainy day fund to offset Medicaid costs. 

On Wednesday, Youngkin signed two executive orders to launch a Rural Health Transformation plan, leveraging federal funds to support quality health care access in rural Virginia. Virginia is expected to receive at least $500 million, potentially $1 billion, over five years for rural health care improvements through the initiative.

Federal job loss impact

Youngkin brought up how the state has fared amid mass federal layoffs, saying 11,200 Virginians have lost their jobs since the start of the year. That number doesn’t reflect the full scope of the impact, with Cummings stating it does not include the workers that took the early buyouts and are still receiving payments until later in the year. As he has in recent months, the governor touted the 250,000 open state jobs in the commonwealth as a possible solution for unemployed workers. 

“What we have seen is unemployment claims generally staying at a very normalized level,” Youngkin said. “Today, we have 250,000 open and available jobs, many of them in Northern Virginia, over 100,000 of them require a bachelor’s degree.”

The governor did not have data to show how many of the former federal workers had made the shift over to an open state position. Virginia’s overall unemployment rate ticked up to 3.5% in June, which has continued an upward trend since January.

Effort to reduce SNAP error rate 

The governor recently signed an executive directive aimed at localities to reduce the amount of error in doling out payments. In 2027, the state will be on the hook for some of the SNAP funding if there is an error rate above 6%. The state currently pays nothing towards SNAP, with it all being federally funded. The state could pay up to 15% depending on the error rates, which would come out to about $270-million in the budget. 

Virginia currently has an 11.5% error rate in SNAP payments. If the state can get that number down to below 6% before 2027, then state funds will not have to be used for the program.

“I firmly believe that if we can go to work with the localities and provide them with support resources, automation, we do have to change some of the rules which we can do,” Youngkin said. “You can’t allow somebody to attest that they made this much, but they actually have to verify it real time, and I think that will bring down error rates substantially.”

SNAP is handled on the local level, not by the state. But the state is directing the localities to create incentive programs that encourage weeding out fraud, developing partnerships to help alleviate workload in these offices managing the program, and possibly implementing technology upgrades.

Youngkin touts strong financial situation

Cummings also reiterated the governor’s main message that the commonwealth is in a strong and resilient fiscal position heading into fiscal year 2026.

Cummings said this is a result of Virginia collecting a significant amount of extra money, including $572 million more than expected, due to Virginians paying more in individual income tax nonwithholding revenues. The total general fund revenues grew  by 6.1%  from last year  to $1.78-billion. 

Virginia has accumulated $10 billion in revenue surpluses since 2022 against original forecasts, demonstrating a consistent trend of exceeding expectations.

Overall, Virginia’s economic output grew by 2.6% compared to the 1.5% forecast.

Virginia has also given back over $8.9 billion to taxpayers through tax cuts since 2022, meaning a typical family has saved over $4,600. However, Senate Majority Leader Scott Surovell, D-Fairfax, questioned the taxpayer data, considering most of them are military retirees.

Cummings said the total is a blended figure and is not intended to “mislead” anyone. He said the data can be broken down by military and non-military.

Youngkin will present his fiscal year 2026 amendments and the 2026-2028 biennial budget to the money committees in December.

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