McDonnell proposes adding to Va. budget to attract commerce

By Anita Kumar and Rosalind S. Helderman
Washington Post Staff Writers
Thursday, April 15, 2010; B01

RICHMOND -- Gov. Robert F. McDonnell on Wednesday recommended adding tens of millions of dollars to the state budget to lure companies to Virginia while restricting funding for certain types of abortions and slashing state aid to public broadcasting.

McDonnell (R) also proposed increasing fines for speeding by $1 for each mile over the speed limit, which could bring in an estimated $7.2 million over two years.

Many of McDonnell's new spending proposals are for economic development -- including a total of nearly $15 million for two companies, SRI and Bank of America, that previously announced they would relocate to the state, for potential new producers of biofuels, and for a fund he can use to help attract companies to Virginia.

"Smart states are taking proactive steps today to encourage economic growth tomorrow, and Virginia will lead the way," he said. "We need more good paying jobs in every part of Virginia."

McDonnell, who has made economic development his top priority, is trying to persuade Los Angeles-based Northrop Grumman to move its corporate headquarters to Northern Virginia.

In total, the governor proposed 96 amendments to the two-year, $82 billion budget that the General Assembly adopted last month. His amendments include $42.1 million in new spending, offset by $51 million in new cuts or increased revenue proposals.

Senate Majority Leader Richard L. Saslaw (D-Fairfax) called the number of McDonnell's budget amendments "pretty unusual."

"I've never seen anything happen remotely like this," he said. "A whole lot of them might be rejected."

In addition to recommending budget changes, McDonnell also proposed amendments to 122 bills, all of which the legislature will consider when it returns to the Capitol Wednesday for a one-day session. McDonnell accepted a bill calling for a new pro-choice license plate, but amended the language to ensure proceeds do not pay for abortions. He signed 749 bills, including one that will allow holders of concealed weapons permits to carry guns in restaurants that serve alcohol provided they do not drink. McDonnell did not veto any bills.

After being lobbied by the Family Foundation of Virginia and other conservative groups, McDonnell, a Catholic who opposes abortion, proposed withholding state money for abortions, including cases in which the health of the mother is at risk or the child might be born with a deformity. Under the proposal, money could be spent on abortions in cases of rape, incest or when the life of the mother is at risk.

The change would put Virginia in line with federal standards set by the so-called Hyde Amendment.

"His amendment concerning elective abortion is entirely reasonable, considering that people in overwhelming numbers do not support taxpayer-funded abortion," said Victoria Cobb, president of the Family Foundation.

Jessica Honke, public policy director for Planned Parenthood Advocates of Virginia, said she is disappointed that McDonnell is trying to further limit women's access to abortions. "The decision to terminate a nonviable pregnancy should be left to a woman, in consultation with her family and physician," she said.

McDonnell also recommended boosting funding for operation and maintenance of the Wallops Island Spaceport by about $700,000; restoring $1.9 million for a Virginia National Guard program based at Camp Pendleton that helps at-risk, middle-school-age children; and restoring $750,000 for safety inspections of Virginia mines and to keep open a prison that the General Assembly had proposed closing.

He proposed capping state spending on comprehensive services for at-risk and troubled children. The change would result in a $9.9 million cut to funding for programs that were already reduced by $86 million over two years.

He also wants to eliminate funds that allowed state employees to get non-sedating antihistamines and erectile dysfunction drugs on their state health plans, and proposed cutting $800,000 from public radio and TV stations.

Sen. Janet D. Howell (D-Fairfax), who sits on the Senate Finance Committee, said she hopes senators reject the broadcasting amendment. "It's so petty," she said. "For the value that the viewers get, it leads one to wonder what they're afraid of."

McDonnell also proposed retaining a tax break for Virginia manufacturers, a $10 million budget tweak that will please anti-tax activists and potentially spur economic development. The deduction mirrors a federal tax break adopted in 2004. Many states that had conformed their tax codes to follow the federal government's lead have now phased it out to save money, including Maryland.

The General Assembly had proposed reducing the amount that qualifying businesses could deduct from their state taxes. McDonnell said holding the program steady would give Virginia a competitive edge over its neighbors and spur job growth. One company that could benefit is Northrop Grumman, which is weighing whether to move its corporate headquarters from California to Virginia or Maryland.

McDonnell accepted a bill to create a "Trust Women/Respect Choice" license plate, but proposed amending the bill slightly to include language to ensure that any money generated from the new plate is not used to "provide abortion services."

After the first 1,000 plates, money from fees for the plate will go to Planned Parenthood. Almost 500 plates have been sold.

The state already offers a plate that reads "Choose Life," with proceeds going to antiabortion pregnancy centers.

McDonnell also signed a bill that will outsource Virginia's program for filing tax returns online to a consortium of private companies, which will be allowed charge a fee to those who make more than $57,000 a year. Virginia has for a decade allowed residents to file their taxes online for free, regardless of income.

According to the state tax department, 278,000 Virginians filed their taxes online in 2009; the department reported that 90,000 of them make more than $57,000 and would be subject to a fee under the new system. The new program will be similar to one at the federal level, in which the Internal Revenue Service also outsources online filing to companies that can charge a fee to higher-income filers.

Del. Kathy J. Byron (R-Lynchburg), the bill's sponsor, said she does not think state government should be providing a service that private industry could offer.

"If I had to make a choice about what I consider a core service of government, it wouldn't be tax preparation," she said. "There will be some who want government to provide everything for them, and they'll never understand it."

The bill had received overwhelming bipartisan support in both chambers of the General Assembly. Del. Adam P. Ebbin (D-Alexandria), one of 10 Democrats in the House of Delegates who opposed the idea, said he feared the new fee would be a disincentive to filing taxes online. "I don't think we ought to be charging people to file their taxes," he said.

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