Va. Assembly To Borrow $1.5 Billion

Secretary of Finance Jody M. Wagner told lawmakers Wednesday that the slumping economy is still battering state finances, though revenue this year is slightly outpacing earlier projections. But Wagner stressed that lawmakers might face additional tough choices next year if the economy does not rebound.

"We continue to be better off than other states, although not as good as we would like to be," Wagner told the House Appropriations Committee.

Later in the day, the House and Senate unanimously passed the bond package that will pay for almost 70 projects across the state, including two new state parks and a new school for the deaf, blind and disabled in Staunton.

Most of the money will be spent on projects for community colleges and universities, including George Mason University in Fairfax County and the Northern Virginia Community College system. An additional $1 billion will be borrowed to spend on planning for another 25 projects.

"For Virginia higher education, the final agreement creates more space for deserving students, which is needed due to steadily increasing numbers of students enrolling at our outstanding colleges and universities," House Speaker William J. Howell (R-Stafford) said.

If Kaine signs the bill, as is expected, the state could start issuing the bonds immediately. It would come as money from bonds approved in 2002 runs out.

Del. Brian J. Moran (D-Alexandria), chairman of the House Democratic caucus, said: "We've authorized the largest investment in construction at our colleges and universities in Virginia's history. This will help jump-start our construction industry while building capacity for our future."

Negotiators, who had been meeting for a month, reached a verbal compromise last week and signed the agreements late Tuesday night.

In December, Kaine asked legislators to approve a $1.65 billion bond for construction projects at the state's colleges and universities.

The Senate wanted to issue $2.6 billion in bonds for education and other projects, but the House voted to borrow $1.8 billion, as Republicans argued that the state should not borrow as much during an economic downturn.

The compromise bill includes ways to improve long-term planning and provide more accurate cost estimates.

About 360,000 students attend the state's 16 public four-year schools and 23 community colleges, making the system the 11th-largest higher education program in the nation. Enrollment is expected to increase by 51,000 students in the next decade.

State leaders have been relying more on borrowing for large projects, including a transportation package approved this year. In 2002, legislators and voters approved $900.5 million in bonds for higher education construction projects and $119 million for state parks.