RICHMOND, FEB. 2 -- The lines are drawn for a showdown in the Virginia General Assembly on the recession-scarred biennial budget, with opponents of Gov. L. Douglas Wilder's plan to cut $2.2 billion in spending likely to face a major test during a Sunday session of the House of Delegates.
At issue is whether the legislature will go along with Wilder's proposal to use $162 million from the state's Literary Fund to help balance the budget. The fund ordinarily uses criminal court fines to pay for school construction.
That plan advanced toward a final vote in the House today after a 30-minute debate in which a Republican opponent called it "a shell game."
Another battle is likely to occur Sunday when the Senate Finance Committee, seat of the most discomfort about Wilder's budget plan, unveils its version of the budget.
At the heart of the debate is Wilder's insistence on maintaining a $200 million budget reserve, which he contends will be needed if the economy continues to worsen.
In the latest round of cuts, announced Friday, Wilder called for 100,000 state employees to be furloughed for three weeks without pay -- three days between now and July 1 and 12 days in the fiscal year that follows -- to help offset an additional projected shortfall of $176.2 million in tax collections.
Wilder attributed the latest reduction in revenue projections, which are based largely on income and sales tax receipts, to "slow sales over Christmas and fighting the war in the gulf."
The importance of the Literary Fund bill to the governor's program was emphasized by the rare appearance on the House floor today of the governor's chief of staff and chief arm twister, J.T. Shropshire.
Shropshire said he was not on the floor to cajole or coerce lawmakers into supporting the Literary Fund bill. He said he could see the action better in person than on the closed-circuit television on which he and Wilder ordinarily monitor the floor.
A procedural vote today on the Literary Fund measure indicated that despite strong Republican opposition, Wilder may have enough votes to get it through the House.
Del. Alan A. Diamonstein (D-Newport News), who is carrying the ball for Wilder on the House floor on the Literary Fund, employed a carrot and stick in urging its passage.
If the bill is approved, Diamonstein said, $175 million in bonds will be sold to finance construction of 116 schools in 46 areas. If it fails, those schools will not be built in the foreseeable future, he said. To emphasize his point, Diamonstein began reciting the list of projects at stake, until House Speaker A.L. Philpott (D-Henry) stopped him.
Wilder's plan calls for using the $162 million in Literary Fund receipts to pay for teacher retirement benefits so that the money doesn't have to come out of the cash-strapped general fund. The state would then sell $175 million in bonds through the Virginia Public School Authority to build the schools.
The bonds would be backed by future fines paid into the Literary Fund and would be paid off with $5.4 million a year transferred from the fund and with contributions from participating school districts.
Critics say the plan amounts to borrowing money for the state's operating expenses, a deficit-financing tactic Wilder often has criticized the federal government for employing.
The Senate Finance Committee is expected to offer a plan Sunday to build schools without a bond issue.
In a breakfast speech to the Virginia Press Association, Wilder made it clear that he has no intention of backing down from his approach to balancing the budget.
Critics urged him to use his rainy-day fund to balance the budget earlier, when the first drops of rain fell on the economy, Wilder said. Had he listened to them then, there would be no fund to even argue about now that the downpour resembles "a monsoon," he said.
Wilder said that although some are "carping about what they call 'smoke-and-mirror' tactics" he may be using to balance the budget, "no one has yet beaten a path" to his door with "their own fiscally responsible, workable budgetary proposals."
There is one item in the budget that Wilder and legislators appear to agree upon: providing money to help boost the state's bid for a maintenance and operations center for United Airlines at Dulles International Airport that could produce up to 16,000 jobs and tax income of $27 million a year.
Dulles is believed to be one of three front-runners for the prize, along with Oklahoma City and a combined bid from the Cincinnati and Louisville airports.
A package of three bills, two sponsored by Sen. Charles L. Waddell (D-Loudoun) and one by Sen. Clive L. DuVal 2d (D-McLean), is working its way through the assembly.
Those bills would provide up to $4 million a year in state funds to help United make its rent payments on buildings that would be financed by the Loudoun County Economic Development fund. They also would establish a special tax district along state Route 606 in Loudoun County so that the two-lane road could be widened to four, and allow Loudoun County to offer a lower property tax rate to United.