Kaine Pushes Bonds To Cut Bay Pollution
Plan Calls for Va. Borrowing $250 Million

By Tim Craig
Washington Post Staff Writer
Thursday, December 14, 2006

RICHMOND, Dec. 13 -- Gov. Timothy M. Kaine (D) said Wednesday that he wants to borrow $250 million to reduce pollution in the Chesapeake Bay, a proposal that immediately became entangled in a dispute over transportation funding that is heating up before the General Assembly returns next month.

Under Kaine's plan, Virginia would combine $250 million from a bond issue with $300 million in already appropriated general funds to pay for upgrading as many as 89 wastewater treatment plants. He said that would put the state on track to meet its goal of reducing nutrient and nitrogen runoff originating from human and animal waste.

Virginia, the District and Maryland pledged in 2000 to greatly reduce the waste that enters the bay by 2010. Although state officials say that Virginia probably won't meet the goal, it could come close if the General Assembly approves Kaine's spending plan.

"The package I announce today . . . will give us the ability to demonstrate our commitment to the bay," Kaine said. "The amount from last year and this amount added to it will get us a long way toward the goal."

Kaine will unveil his amendments to the two-year budget Friday. Wednesday's announcement became part of the debate over how the state should pay for its transportation needs, estimated at $17 billion in Northern Virginia alone.

Kaine and the Republican-controlled state Senate have opposed plans to rely heavily on bonds, which are repaid over several years, to finance transportation projects. Kaine and Senate Republicans instead presented a plan earlier this year to raise taxes, which House Republicans rejected, to help guarantee the long-term revenue stream for road construction projects.

Republican leaders in the General Assembly said Wednesday that they were generally supportive of the concept of issuing bonds for the bay cleanup, although some senators said Kaine has to come up with a way to repay the bonds.

But House Republican leaders said Kaine's bond financing proposal renews their argument that Virginia can borrow more money to start building roads.

"I think [Kaine] is on shaky ground if he is against bonds for transportation but for them for other things," said Del. Vincent F. Callahan Jr. (R-Fairfax), chairman of the House Appropriations Committee.

Eight other House Republicans from Northern Virginia said Wednesday that they will revive their push to use bonds to pay for transportation projects.

Kevin Hall, a Kaine spokesman, said there is a difference between borrowing money to protect the environment and fixing the state's road system.

"Sewage upgrade projects have a definite start and a definite finish, and there is no open-ended financial commitment. The same can't be said for roads," Hall said. "After spending most of the past year saying no to every idea, these guys continue to pitch the political equivalent of a payday loan, with no responsible way to pay it back over the long term."

The reaction from House Republicans underscores how Kaine is likely to be dogged by the debate over transportation even as he tries to succeed on other issues.

With a projected $550 million budget surplus, Kaine wants to spend more money on the environment, education and health care. He is also expected to propose new transportation spending, although he doesn't want the subject to dominate the upcoming legislative session, as it did last year.

But House Republicans, some of whom Kaine is targeting for defeat in next year's elections, are trying to preempt his budget announcement Friday by trying to shift the debate back to transportation.

House Speaker William J. Howell (R-Stafford) announced Monday that the House Republican caucus has pledged to spend at least half the surplus on transportation.

The eight Northern Virginia Republicans want to go even further, saying Wednesday that they hope to use the entire surplus, as well as bonds, to add $1 billion to this year's transportation budget.

"The governor has decided to flip-flop on bonding in order to address one priority. It is now past time for him to join the efforts of House Republicans and other forward-looking leaders to use all of the financing tools available to us to deal with transportation," House Majority Whip M. Kirkland Cox (R-Colonial Heights) said.

Virginia has a triple-A bond rating, which allows it to borrow money at low interest rates. In opposing calls for higher taxes, House Republicans have noted the state could borrow an additional $900 million a year and still stay within its self-imposed cap of using no more than 5 percent of the budget to pay off its borrowing costs.

Del. L. Scott Lingamfelter (R-Prince William), who opposes raising taxes to pay for new roads, said it makes sense to use borrowed money for cleaning up the bay and building roads.

"Today, projects are fairly cheap; we can lock in some projects at low interest rates. It is kind of like buying a home at the right time," he said.

Senate leaders and Kaine remain cool to the idea of using bonds to pay for roads without a new revenue source to repay the debt.

"You just can't go out and sell paper," Senator Majority Leader Walter A. Stosch (R-Henrico) said.