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McDonnell to roll out massive spending campaign for roads, colleges, jobs

By Anita Kumar
Washington Post Staff Writer
Sunday, January 9, 2011; 12:47 AM

RICHMOND -- Virginia Gov. Robert F. McDonnell plans a massive spending campaign that he said would unclog state roads, award thousands more college degrees and spur job creation, part of an aggressive legislative agenda he is expected to roll out this week.

McDonnell (R) will press lawmakers to approve a series of statewide projects he said would be paid in part through Virginia's $403 million budget surplus, $337 million in higher-than-expected tax revenue, and $192 million generated through cuts and savings.

And in stark contrast to other governors, who are cutting budgets and slashing payrolls, McDonnell told The Washington Post that he plans to borrow nearly $3 billion over the next three years for transportation projects and intends to spend an additional $400 million to fix the state's ailing roads, $58 million to help state colleges and universities, and $54 million to create jobs.

"When you only have four years to do things, you understand the clock is always ticking," said McDonnell, referring to Virginia law that makes it the only state in the nation where a governor can't succeed himself. "You have a sense of urgency to get things done."

Democrats said that they share many of the Republican governor's priorities but that his transportation proposal is filled with IOUs and his jobs plan is based on stimulus money that will eventually run out. "His goals are sound, but his methods for achieving them are unsuccessful," said Brian Moran, chairman of the Democratic Party of Virginia.

The governor said he is aware that his legislative package is hamstrung by a divided General Assembly -- Republicans control the House, but Democrats run the Senate -- and the pressures of a looming election in which all 140 legislative seats are up for grabs.

But McDonnell said that if Democrats have better ideas, they should propose them. "I am perfectly willing to be bold and say 'Here's the problem and here's my solution to fix it,' " McDonnell said during the interview in his Capitol Square office. "You can't fight something with nothing. And right now, I haven't heard any alternatives."

A former veteran legislator, McDonnell will submit 130 measures from his state agencies during the legislative session that begins Wednesday, and even more from his office that will represent his top priorities, including a scaled-back plan to privatize state liquor stores. Delegates have laughed that they are having trouble carrying the governor's bills while abiding by House rules to sponsor only 15 bills each.

"He has a big agenda -- tons of bills," said Del. David B. Albo (R-Fairfax). "And he painstakingly analyzes everything."

Tackling roads

The governor, the first Republican chief executive in eight years, said the administration will also make larger payments into the Virginia Retirement System. Much of the surplus is committed by law to the Chesapeake Bay cleanup, K-12 education and transportation, but McDonnell decided to put more money into roads and give state employees a 3 percent bonus while making additional payments into the retirement system to ensure its solvency.

He also plans to release the second part of his transportation proposal, which will include both more funds for roads -- but no tax increase - and a flurry of management changes after an audit of the Virginia Department of Transportation found that hundreds of millions of dollars sat unspent for years in various accounts.

Every Virginia governor in modern times has tried to tackle the state's transportation problems, and McDonnell is no different. He already announced he wants to spend $150 million from last year's budget surplus and $250 million recouped from the transportation audit.

For years, the state has struggled to allocate transportation funding, with Democrats proposing tax increases and Republicans rejecting all levy increases. Meanwhile, Virginia's billion-dollar shortfall in the transportation budget has led to thousands of job cuts and hundreds of unfinished projects.

"There's no single easy way out of the transportation problem," said Del. Timothy D. Hugo (R-Fairfax), chairman of House Republican Caucus. Legislators, he added, will find that they have to vote for a transportation plan during an election year.

Democrats and conservative Republicans initially opposed taking on more debt for roads, especially after a committee of legislative and gubernatorial staffers voted to tweak the model used to determine the state's annual debt capacity. The state would be able to borrow the same amount over a decade, but more money would be available initially under the new interpretation.

"It's too much," said Del. Brenda L. Pogge (R-York). "We can't afford it right now. We should not be borrowing and spending. We should sit tight and let the economy get well."

McDonnell flew to New York on Tuesday with Republican and Democratic legislators to meet with bond-rating agencies about the state's AAA rating. They were told that the state was still on solid footing.

Sen. R. Edward Houck (D-Spotsylvania), who went on the trip, said McDonnell's plan was "weighing heavily'' until the bond raters praised Virginia in three separate meetings. "It made the proposal a lot more palatable," Houck said.

'Short four years'

McDonnell invites legislators to the Executive Mansion to discuss policy and plans, includes them in advisory groups and was the first governor to visit with budget negotiators on their own turf. But in recent months, several lawmakers have criticized him for not giving them a heads up before proposals are announced.

Sen. Mary Margaret Whipple (D-Arlington), chairman of the Senate Democratic Caucus, said that although most governors have a learning curve, that she was surprised given McDonnell's experience in the General Assembly and as attorney general that he did not accomplish as much as he did in his first year. "I would imagine maybe he's a little disappointed," she said.

The governor finished his first session with modest victories - a $50 million economic development package, including programs to lure businesses to the state, and education bills designed to increase the number of charter schools, virtual schools and laboratory schools in Virginia.

McDonnell considered but did not call for special legislative sessions on transportation and government reform last year. And he attributes his modest agenda last year to time spent learning the job, making hundreds of appointments and helping balance a budget with a $4.2 billion shortfall. Last year's session started with Timothy M. Kaine (D) in the governor's mansion and writing the state budget.

"I just didn't think with the economy being what it was last year that it was the right time," McDonnell said. "Because we've got more stability now in the budget and more progress on jobs . . . it gives me more time to be bold and energetic on getting some of these other major reforms passed. I couldn't take on transportation, higher education, things that needed some other new investment. This year, I can."

Whipple said McDonnell spent much of last year "fixated" on his unpopular proposal to privatize the state's 76-year-old liquor wholesale, distribution and retail monopoly. But he withdrew it after considerable opposition by Democrats and some Republicans, in part because it would bring in $47 million less a year for the state.

He then hired a national financial management company to revamp the plan, and he is expected to propose next week that the state privatize only its 332 liquor stores.

"Very few people have publicly or privately defended the fact that we have a government monopoly, but how you do the details . . . is where some of the conflicts come in, and it's not easy,'' McDonnell said.

McDonnell acknowledged that it would be easier to get his priorities through the General Assembly next year if he's successful in helping the Republicans win back control of the state Senate in November. But that doesn't mean he's not going to try to get his legislative priorities through this year - after all, the clock is ticking.

"I think that you've got a short four years to try to improve the quality of life for citizens, solve problems, find solutions," said McDonnell, who is looking toward his legacy and has been mentioned as a potential vice presidential candidate when his term expires in 2014. "Coming up on a year, I realize I've got an increasingly short amount of time to get some of these ideas done," he said

As of Sunday, it's 1,097 days.

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