Va. Assembly To Borrow $1.5 Billion
Money Is for Projects At Colleges, Parks

By Anita Kumar and Tim Craig
Washington Post Staff Writers
Thursday, April 24, 2008; B01

RICHMOND, April 23 -- The Virginia General Assembly voted Wednesday to borrow $1.5 billion to pay for nearly 70 construction projects at colleges, parks and mental health facilities during a one-day session designed to complete the year's unfinished legislative business.

"This is a good bill, which is going to be a landmark piece of legislation for capital improvements," said Del. Lacey E. Putney (I-Bedford), chairman of the House Appropriations Committee.

Lawmakers also weighed in on dozens of amendments, recommended by Gov. Timothy M. Kaine (D), to some of the nearly 900 bills passed during the two-month legislative session that ended last month.

They agreed to many of Kaine's 41 recommended changes to the two-year, $77 billion state budget, including spending $5 million to preserve endangered Civil War sites, as well as small alterations to bills to crack down on puppy mills, further restrict payday lenders and overhaul the state's mental health system.

But House Republicans turned back Kaine's efforts to extend health coverage to some of the estimated 1 million uninsured Virginians.

Under the plan, the state would have spent $500,000 to partner with small businesses in Hampton Roads as part of a pilot program. The state, employers and low-income workers would then split the cost of an insurance policy.

"This is an opportunity to get started and try to provide insurance to the working uninsured," said Marilyn B. Tavenner, Secretary of Health and Human Resources.

The money would have come from unspent dollars in the budget, but several Republicans said they feared the pilot program would have led to a costly new government program.

Before the session began at noon, Kaine withdrew his most controversial budget amendment -- to cut Medicaid costs by substituting generic behavioral medicines for brand-name ones. Legislators argued that the change would have restricted the behavioral drugs available to mentally ill patients who receive Medicaid. Opponents said Medicaid would have paid only for more expensive medicine after cheaper drugs were deemed ineffective.

The Republican-controlled House and the Democrat-controlled Senate overcame partisan bickering to fill about two dozen judgeships across the state. That means Kaine can fill the rest of the current vacancies with one-year appointments.

Kaine is expected to call the General Assembly back to Richmond this year for a special session to find more money for roads and transit.

The regular session, which was extended twice, was marred by a budget shortfall of more than $2 billion through 2010. The shortfall has hindered Kaine's plans to create programs and will result in cuts to state agencies and local governments.

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.