Cuccinelli raises legal issues on roads plan, Medicaid

Attorney General Ken Cuccinelli has thrown a shroud of legal uncertainty over two of the General Assembly's most significant actions this year -- passage of legislation to raise money for transportation and creation of a path for reforming and expanding Virginia's Medicaid program.

Cuccinelli, the presumed Republican nominee for governor, issued an advisory opinion late Friday saying that taxes imposed on localities in Hampton Roads and Northern Virginia to pay for regional transportation initiatives are unconstitutional.

Virginia Attorney General Ken Cuccinelli

The attorney general also repeated his opinion -- first pronounced on the final day of the General Assembly session -- that a legislative commission created under the state budget does not have authority to approve expansion of Medicaid after it verifies the achievement of specific reforms to the program.

Both nonbinding opinions, issued in response to inquiries by Del. Robert G. Marshall, R-Prince William, put new pressure on Gov. Bob McDonnell just before the Monday deadline for the governor to act on legislation and the state budget.

"The governor's office has previously received input from the Office of the Attorney General relating to the same questions contained in the opinions issued today," McDonnell spokesman Jeff Caldwell said Friday.

"Every bill passed by the General Assembly is reviewed by the attorney general, and we will consider that advice as we make a final determination on necessary amendments to the legislation," Caldwell said.

Cuccinelli emphasized that the advisory opinions are based on law rather than the policy merits, but he has strongly opposed Medicaid expansion and the taxes imposed by the transportation legislation as he prepares to run for governor while remaining attorney general.

"I'm sure politics had something to do with it," said Senate Minority Leader Richard L. Saslaw, D-Fairfax, who said the state has a long precedent of imposing taxes for transportation in Northern Virginia and not the rest of the state.

The General Assembly imposed an additional tax on fuels sold in Northern Virginia in 1980 to support the region's Metro system, Saslaw said. "It has been in effect since then, and it was imposed by Richmond."

House Speaker William J. Howell, R-Stafford, who introduced the transportation bill as originally proposed by McDonnell, said Friday that he expects the governor to address the attorney general's concerns through amendments Monday.

"We'll sort it out," Howell said.

Del. S. Chris Jones, R-Suffolk, who carried the revised transportation bill that included taxes for regional initiatives in Hampton Roads and Northern Virginia, disagreed with the opinion but said he was not surprised by it.

"With all due respect to the attorney general, it's just one attorney's opinion," Jones said.

Marshall successfully challenged legislation adopted by the General Assembly in 2007 that delegated taxing powers to a regional authority in Northern Virginia to raise money for transportation. The Virginia Supreme Court voted unanimously that the law was unconstitutional, ruling that such unelected bodies cannot levy taxes.

On Medicaid, Marshall said the opinion vindicated his objection to delegating authority to the newly created Medicaid Innovation and Reform Commission to determine whether the state had achieved sufficient reforms to allow expansion of the program under the Affordable Care Act.

"Medicaid needs serious reform before we can even begin to consider expansion, and the decision about when those reforms are sufficient can and should only be determined by the General Assembly as a whole," Marshall said in a statement Friday that called on McDonnell to remove the provision.

Cuccinelli said the budget language unconstitutionally delegates the General Assembly's authority to a subset of the legislature that does not have power to act on the budget without a majority of each chamber.

But legislators in the House and Senate said they already have addressed the same concern, which Cuccinelli raised Feb. 23 in an advisory opinion to Del. Benjamin L. Cline, R-Rockbridge, even before the budget was adopted.

"I am still confident with what we did at the end of the session," said Jones, who helped revise the budget language to address the concerns raised by the opinion then.

The revision of the budget language authorized the appropriation of a "sum sufficient" to carry out the expansion, which the new commission "shall approve" if it finds that specific reforms to the state Medicaid program are achieved.

"I think he is misreading what the language says," said Sen. John Watkins, R-Powhatan. "I think the language in the budget allows the expansion of Medicaid."

"The money has already been appropriated," Watkins said. "The legislative action has already taken place."

On transportation, Cuccinelli said the bill would unconstitutionally impose a higher sales tax increase on localities in Northern Virginia and Hampton Roads than other parts of the state, while imposing additional taxes on real estate transactions and lodgings in Northern Virginia.

He said the provisions violate the Virginia Constitution's prohibition against the General Assembly imposing a local tax. Although the legislature can delegate taxing authority to localities, the attorney general said it cannot directly impose the taxes on those localities.

His opinion was endorsed by former Virginia Democratic Party Chairman Paul Goldman, a political consultant and lawyer who has argued that the tax provisions for regional transportation initiatives is unconstitutional.

"He made the right decision," Goldman said. "This is a decision based on the law, and the Democrats need to accept that. It was unconstitutional to do it the way they did it."

Sen. A. Donald McEachin, D-Henrico, a lawyer and chairman of the Senate Democratic Caucus, said he had not yet read the opinion but noted that it carries no force of law.

"I believe what we did was constitutionally correct," McEachin said.

By Michael Martz, Richmond Times-Dispatch, mmartz@timesdispatch.com, (804) 649-6964

Source: The Richmond Times Dispatch