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Warner Presents Va. Budget Proposal

Money Slated for Transit, State Worker Raises, Health Care

By Michael D. Shear
Washington Post Staff Writer
Friday, December 17, 2004; 12:35 PM

RICHMOND, Dec. 17 -- Virginia Gov. Mark R. Warner (D) on Friday proposed spending the fruits of a growing economy on new road and transit projects, more money for health care, higher salaries for state workers and reduced taxes on groceries.

In a speech to the legislature's budget-writing committees, Warner also pledged to sock additional money away for a rainy day, and he warned lawmakers against becoming so giddy that they spend more than the state can sustain in the long run.

Virginia Gov. Mark Warner, right, listens to Secretary of Finance John Bennett as he prepares to deliver his 2005 budget proposals in Richmond. (Steve Helber - Associated Press)

"The budget amendments I outlined today are fiscally responsible," Warner said in kicking off the budget debate that will begin in earnest when the 2005 General Assembly session convenes Jan. 12. "They make smart investments in transportation, economic development and better schools."

Warner's proposals, which would amend the state's two-year budget at its halfway mark, include about $918 million in higher-than-expected tax collections. If the amendments are adopted by lawmakers next year, the state's new operating budget would be about $26.33 billion over two years.

Warner's proposals include:

• $824 million to finance transportation proposals, including $140 million for a fund to encourage private partnerships, $80 million for new rail cars and buses, $80 million to help local governments take over road building, $23 million for railroad improvements, and $147 million for other projects across the state.

• $259 million to pay for the rising cost of health care, including a 9 percent increase in the number of children, elderly and disabled enrolled in Medicaid.

• $229 million into the state's rainy day fund, including a mandated set-aside of $135 million required by law when the economy is growing rapidly.

• $120 million for education, including $48.8 million for K-12 schools, $20 million to help local systems build schools, and $50.8 million to help colleges and universities meet enrollment growth.

After the speech, Warner reiterated his warning against run-away spending.

"There's a lot of the lawmakers who share the concern that we have to be fiscally conservative," Warner said. "The challenge will be as we get into a session during an election year, will they work with us to hold the line on spending."

Members of the Republican-dominated General Assembly greeted Warner's proposals warmly, saying they largely conform to their own priorities.

"It was a good speech. I don't see how anybody could be critical of this speech," said Sen. Kenneth Stolle (R-Virginia Beach), a Warner ally in past years.

House Speaker William J. Howell (R-Stafford), who opposed Warner's tax proposals last year, called the speech "a fair statement of where we are." Howell was asked whether he heard anything that would prompt outright opposition from his Republican caucus.

"No. I didn't see anything like that," he said.

But some advocacy groups expressed disappointment that Warner did not go further in attempting to meet the state's needs.

Michael Lipford, the executive director of the Nature Conservancy in Virginia, said that while the budget provides an additional $32 million for water quality improvements, it still does not contain enough money for the environment.

"We are very disappointed that his budget does not provide new funding for land conservation," Lipford said in a statement.

And some transportation advocates continued to express the belief that Warner's proposal for roads and rail falls short. Prince William Del. L. Scott Lingamfelter (R) vowed to push legislation that would increase the amount of money the state borrows to pay for new road construction.

"I think we can do more and I think we must do more," Lingamfelter said.

© 2004 The Washington Post Company