By Ellen Nakashima and Spencer S. Hsu
Washington Post Staff Writers
Wednesday, January 28, 1998; Page B01

RICHMOND, Jan. 27—Democratic lawmakers today proposed using $350 million in annual lottery profits to help localities build and renovate schools in what would be the largest state school construction program ever in Virginia.

The Democratic plan is aimed at addressing what city and county officials across the state have said is the biggest financial problem they are facing during the next five years: about $6.2 billion worth of unfunded projects to repair and replace aging classrooms.

Democrats, who have been reeling since the GOP swept the three statewide offices and made historic gains in the legislature in the November elections, also hope the plan will counter Republican efforts to dictate the agenda for the 60-day legislative session that ends March 14.

The session is likely to be dominated by debate over Gov. James S. Gilmore III's popular five-year plan to largely phase out the property tax on cars and trucks, which would cost an estimated $493 million in the first two years. Democrats think that focusing on crumbling schools will help them reconnect with voters.

But it was unclear how Democrats would pay for the massive initiative, which would be far more expensive than the Gilmore tax cut that many Democrats have blasted as fiscally irresponsible. Democrats today declined to say what cuts they would make in the state's two-year, $40 billion budget proposal to help build and repair schools.

As they deflected questions about how they would finance the plan -- and how the state could afford both Gilmore's tax cut and the school construction initiative -- Democrats cast the school initiative as a worthy companion to the tax cut in budget talks.

House Democratic Floor Leader C. Richard Cranwell (D-Roanoke) put it this way: "If we abolish the personal property tax on autos and don't do anything to address school construction needs, localities are going to have to raise real estate taxes."

The Democratic plan, sponsored by Southwest Virginia Del. Thomas M. Jackson Jr. (D-Carroll), would pump all state lottery profits -- currently about $350 million a year -- into a new public school construction trust fund.

State law requires that all lottery money be used for education, but in practice the lottery money goes into Virginia's general fund, which helps to finance schools and a broad range of other state programs.

School construction traditionally has been a local responsibility, with state education money going toward teachers, textbooks, equipment and other education necessities. So if Virginia used the state money for construction, it likely would have to find room in its budget for tens of millions of dollars more for nonconstruction education funding.

Under Jackson's plan, cities and counties would receive grants based on their wealth, meaning that affluent jurisdictions in Northern Virginia would benefit less than those in low-income, rural areas downstate.

But Democrats from across the state said the need for better school buildings overshadows most concerns about inequities in the plan. They said the school plan is likely to be Democrats' top priority of the session, an initiative that they say has united lawmakers from far Southwest Virginia and Northern Virginia -- areas whose interests often are at odds.

"The outcry for school buildings, along with smaller class sizes, is deafening," said Sen. Emily Couric (D-Charlottesville), a co-sponsor of the bill. "We must step up to the plate and meet this need."

"We have voices from Big Stone Gap, from Halifax to Fairfax, whose needs are the same," said Del. W.W. "Ted" Bennett Jr. (D-Halifax), a longtime advocate of increased state funding for school construction.

The idea has drawn support from moderate Republicans, from House Education Committee Co-Chairman James H. Dillard II (Fairfax) to Del. Anne G. Rhodes (Richmond).

"The key question is, everybody recognizes we need to do something to address school construction," Dillard said. Rhodes has proposed her own plan to return lottery money to localities for school construction, but at a much slower pace.

Couric ticked off a list of school building woes: 63 percent of public schools are more than 25 years old and in need of renovation or replacement; 45 percent of school divisions use a total of 3,621 trailers for students; 30 percent of schools report crowding; 7,900 classrooms will be needed over the next five years; and 52 percent of school systems report that school maintenance is being deferred.

In five Fairfax County high schools, said Del. Linda T. "Toddy" Puller (D-Fairfax), students study science in labs last updated during the Eisenhower presidency. Another high school -- Centreville High -- is so crowded that administrators have painted some hallways blue so that students know they cannot stop in them or "you will be trampled," Puller said.

"Facilities are just a desperate need across the commonwealth," said Fairfax School Board member Kristen J. Amundson, who is president-elect of the Virginia School Boards Association. "When school board members of all parts of the state get together, this is the one subject on which there is universal agreement."

Amundson added that when Gilmore pledged during the fall campaign to add 4,000 teachers to the state's schools, "what I heard from people all over the state was not that they thought this was a bad idea but, 'Oh my gosh, where are they going to put them?' "

Couric and other Democrats said that when voters approved Virginia's lottery a decade ago, they intended that all profits go to school construction. This initiative merely returns the state to its original plan, she said.

"This is the Democratic education initiative," said Del. Alan A. Diamonstein (Newport News), a member of the House Appropriations Committee and chairman of the House Democratic caucus. "The single biggest issue in the state is construction. This will send direct state aid to counties and cities, and it's never been done before" on this scale.