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Va. Budget Negotiators Near Deal on Surplus

Lawmakers Reach Consensus on Amount to Be Used for Transportation

By Michael D. Shear and Rosalind S. Helderman
Washington Post Staff Writers
Wednesday, February 23, 2005; Page B05

RICHMOND, Feb. 22 -- Virginia's budget negotiators said late Tuesday that they were nearing agreement on how much of the state's surplus to spend on transportation, clearing the way for a budget deal before the General Assembly is scheduled to conclude Saturday.

House and Senate lawmakers said they have reached consensus on a plan to spend about $850 million on roads and transit, but they said the compromise is still subject to approval by the Republican caucus in the House of Delegates at a 9 a.m. meeting Wednesday.

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"I do think there's a real chance of getting out of here on Saturday," said Del. Phillip A. Hamilton (R-Newport News), even as he and other budget negotiators missed a midnight deadline to complete their work. "The discussions today have been most beneficial."

Eleven senators and delegates have been meeting since Sunday in the hope of deciding how to update the state's two-year, $60 billion budget. At issue is how best to divvy up the $1.2 billion surplus created by a booming Northern Virginia economy.

Negotiations had proceeded slowly since Sunday, as House members insisted that the state spend more money on transportation and Senate leaders demanded that a larger share of the surplus go to other services. House members had pressed for $1 billion for transportation, while senators wanted to approve a $670 million plan with a promise to seek more next year.

Senate Finance Committee Chairman John H. Chichester (R-Stafford) said a late-evening meeting broke the ice. He and Hamilton said lawmakers from both sides had agreed in principle to meet in the middle. The tentatively agreed-on expenditure would be slightly more than an $824 million transportation plan offered by Gov. Mark R. Warner (D).

Lawmakers also reached agreement to spare all but a few of the state's largest retailers from a budget gimmick that required them to submit sales taxes a month early to boost state revenue. But both stressed that a final budget deal had not been reached, and that many issues of disagreement remained to be worked out in the waning days of the session.

They differ on how to distribute money for hospitals, arts groups and the environment. And they are primed to fight about small items that are politically vital to individual lawmakers.

Still, Hamilton said, "the tone is much better this evening than it was last evening."

This year's budget negotiators are mostly the same ones who deadlocked for more than two months last year over whether to raise taxes. Some residual anger was evident this week as tempers flared several times.

Until Tuesday, there were few face-to-face discussions. Instead, both sides gathered separately -- munching on Oreo cookies and watching college basketball games late into the night -- while their staffs traded written offers that were swiftly rejected as "insulting" or "inadequate."

In a letter, senators threatened, "We may leave with no transportation package this year."

At one point during the discussions, Chichester was asked about a House offer.

"We've been digesting it," he said, then joked: "It came back up."

Lawmakers on both sides had said transportation funding was the largest obstacle to an agreement.

House members had said the state's road and rail network was in dire need of a quick infusion of cash that could be made without raising taxes on gasoline.

Senators said they would prefer to spend more money on health care, the environment and the elimination of budget gimmicks the legislature used in previous years. They also want to wait until next year to press for a larger transportation plan that could include substantial tax increases.

As usual, lawmakers said small items could prompt large arguments.

One such item is $750,000 for a horse farm that is a perennial favorite of Del. Lacey E. Putney (I-Bedford). A brief mention of the horse farm on Monday prompted Sen. William C. Wampler Jr. (R-Bristol) to neigh loudly.


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