Va. House, Senate Set For Clash On Budget

By Anita Kumar
Washington Post Staff Writer
Monday, February 9, 2009

RICHMOND, Feb. 8 -- Lawmakers in Virginia's Senate and House of Delegates offered competing plans Sunday for amending the state's budget, setting the stage for a series of partisan clashes over spending during the final three weeks of the legislative session.

The General Assembly's budget committees approved the revised spending plans without knowing how much larger the $2.9 billion shortfall will be or how much the state will receive from the federal government's economic stimulus package.

"We have done our best with the information that we have in hand, but we know the budget . . . is a work in progress," said Sen. Charles J. Colgan (D-Prince William), chairman of the Senate Finance Committee. "We will have to make additional reductions to our revenues and make further spending cuts."

The biggest disagreement between the Republican-controlled House and Democratic-controlled Senate is how to close the shortfall in the two-year $77 billion spending plan that runs through June 2010.

The House wants to save or raise money by offering early retirement to school employees 50 or older and changing the way the state collects sales tax. It also wants to spend millions more on tourism and on treating mentally retarded individuals at home instead of in institutions.

The Senate wants to save or raise money by accelerating sales-tax collection, diverting funds from the state's smoking-prevention program to offset the escalating cost of Medicaid, increasing the cost of out-of-state tuition at colleges and universities and postponing training schools for new state troopers.

The Senate expanded Gov. Timothy M. Kaine's proposal to release nonviolent offenders early, but the House included no money for that program.

House Speaker William J. Howell (R-Stafford) said the House Appropriations Committee's proposal succeeded in "balancing the budget without any earmarks, protecting core services to the extent possible and enacting policies that hasten job creation and economic recovery."

Both chambers expect to raise about $36 million during a proposed amnesty from the thousands of Virginians who owe the state $1.4 billion in past-due taxes and want to spend money to keep open two mental health facilities that Kaine recommended closing: the Southeastern Virginia Training Center in Hampton Roads and the Commonwealth Center for Children and Adolescents in Stanton.

Neither chamber's budget includes Kaine's proposal to raise the tax on cigarettes, and the House and Senate set aside millions of dollars for further revenue reductions.

"The governor and his team will look at the budget they send to him and give it careful consideration," said Gordon Hickey, Kaine's spokesman.

The full House and Senate will approve a budget this week. A handful of negotiators from both chambers will meet to hash out a compromise before the 45-day legislative session is scheduled to end Feb. 28.

State legislators from both parties say they estimate that the shortfall will be $3.3 billion or more.

Kaine (D) told city and county officials last week that January's income taxes, the second-largest source of state general funds, are far below projections. He said he will revise his estimate next week.

Senate Majority Leader Richard L. Saslaw (D-Fairfax) said legislators might want to consider ways to raise money in addition to the budget cuts. "If we go down a whole lot more than we are today, there are going to be a lot of areas of this state that are going to look like a nuclear war hit it," he said.

The state already has started to eliminate thousands of jobs, slash agency spending by 15 percent and trim almost $1 billion from K-12 education and Medicaid, which helps cover medical needs for the indigent, elderly and disabled.

The state could receive $5.8 billion from the federal government's economic stimulus package, but much of it would have to be spent on targeted areas, including education, transportation and Medicaid. Legislators estimate that $1.5 billion could be used to offset the budget shortfall.

Kaine said last week that the stimulus package should provide the state with more money than the shortfall. "But because we are not out of the woods yet with the economy, I would not suggest that we view the stimulus package as something that should make us breathe a sigh of relief," he said.

© 2009 The Washington Post Company