By Ellen Nakashima and Spencer S. Hsu
Washington Post Staff Writers
Tuesday, March 17, 1998; Page A01

RICHMOND, March 16—Virginia General Assembly leaders reached a $560 million deal tonight to build schools and start cutting the car tax, but lawmakers voted to adjourn Tuesday and go home without agreeing on how to divide the $110 million for school construction among local jurisdictions.

Instead, House and Senate leaders agreed to schedule a special session in April, when the legislature already was to meet to consider Republican Gov. James S. Gilmore III's vetoes and amendments.

In the meantime, budget negotiators will keep trying to resolve the questions they haven't been able to answer so far. Both houses voted tonight for the Tuesday adjournment, but only the Senate formally called for the special session. House leaders said their chamber would do so on Tuesday. As of tonight, the session's 62nd day, it was already the longest session in Virginia history.

The failure to work out the details showed how fragile the deal is, and how frayed lawmakers' nerves are.

"This is very complex and very difficult," said Sen. Charles J. Colgan (D-Prince William), a budget negotiator. "We just have to take some more time to do this. The General Assembly couldn't pass a car-tax bill that both houses could agree to in 60 days. They've asked the [budget] conferees to do it in a week."

Lawmakers, having blown past Saturday's scheduled legislative adjournment, said they now plan to adopt a $40 billion state budget Tuesday night but to defer difficult decisions on how to hand out the school money. Senate negotiators have pressed for a formula based on a system's enrollment, which would favor Northern Virginia and other urban-area districts. House members prefer allotting the money based on school districts' wealth and enrollment growth, which lawmakers believe would favor less-affluent, rural areas.

Budget negotiators will be told to come up with a plan -- which lawmakers expect by April 13 -- that also wraps up details for cutting the car tax.

Tonight's decision leaves intact the broad outlines of an agreement worked out Sunday by weary negotiators. The compromise would set aside $452 million to begin Gilmore's car-tax relief plan and set aside $110 million to start the school construction initiative -- the Democrats' top legislative priority this year.

But negotiators left it to Gilmore to find $20 million in the proposed two-year $40 billion state budget to begin the school building program.

Gilmore complained today about being asked to resolve an issue the lawmakers could not. "My belief is they ought to find the $20 million," he said, saying he would not comment further until he had a chance to review the full agreement.

At 5:38 p.m., the legislature set the record for the longest session, and the part-time lawmakers were glum. Senior legislators grimly predicted "revolt" on the floors if the budget talks dragged on, saying that lawmakers had to return to their jobs as teachers, lawyers, veterinarians and shopkeepers.

"It's very frustrating," said Del. Ward L. Armstrong (D-Henry), a lawyer with jury trials scheduled this week. "You commit to being here for 60 days. . . . I haven't seen my kids in a week."

At 10 p.m., legislative leaders said negotiators had agreed to complete their work on the budget without specifying how school-building money would be divvied up. If the legislature adopts the budget Tuesday as its leaders plan, the special session would be held on or around April 22, the original date of the veto session.

Although budget negotiators over the weekend reached broad agreement on the session's two major policy issues -- the car-tax cut and school funding -- they've been unable since then to work out the plan to distribute the school money.

"Wait until the veto session," said Sen. Madison E. Marye (D-Montgomery). "That's when you're going to see what really will happen."

Lawmakers also have failed to work out final details of the car-tax cut and say they're waiting for Gilmore to send down a bill that would spell them out.

Del. Vincent F. Callahan Jr. (R-Fairfax), a budget negotiator and the House sponsor of Gilmore's original car-tax bill, said that Gilmore had assured him he was willing to submit a bill next month with details similar to those worked out Sunday between House and Senate negotiators.

Under a House plan, the property tax on cars and trucks would be cut by 12.5 percent this year and 27.5 percent in 1999. Owners of vehicles worth less than $1,000 would pay no tax. After five years, the car-tax plan would phase out all of the tax on cars worth up to $20,000, providing the state's economy didn't sour.

But in a sign that even the car-tax compromise could face difficulty, Gilmore said today on a Washington public radio show that he opposed "arbitrary" provisions that tied the tax cut to state revenue growth and other factors.

The plan would allow the tax cut to continue only if its cost would not eat up more than about 8 percent of the state's general fund and only if state revenue grew by at least twice as much as the cost of the cut in any one year.

Without such a cap, "you could eat through the budget," said Sen. Malfourd W. "Bo" Trumbo (R-Botetourt). "That has to be in there, or there will be problems."

House Democrats chided Gilmore for not stepping in to help resolve the impasse.

"If the governor would provide some leadership in the Senate, this could be resolved," said House Democratic Leader C. Richard Cranwell (Roanoke).

Sen. John H. Chichester (R-Stafford), a budget negotiator, urged patience.

"Cooler heads will prevail after we leave here," he said. "Everyone is tired. We've been at this for 10 days. We need a fresh process."

Said Sen. Benjamin J. Lambert III (D-Richmond): "In the final analysis, there'll be more than chewing gum holding [this deal] together -- maybe some Super Glue. But we want to get the heck out of here."

Staff writer R.H. Melton contributed to this report.