In the upcoming session of the Virginia General Assembly, Loudoun lawmakers anticipate battles over how to distribute the state's budget surplus, its settlement with the tobacco industry and its tax revenues.

At a breakfast Tuesday at George Washington University's Loudoun campus, state Sen. William C. Mims (R-Loudoun) told about 50 Loudoun business leaders that the 2000 legislative session is likely to be dominated by counties' quest for state funding for school construction, transportation and slow-growth initiatives.

Mims, who was joined by Dels. Joe T. May and Richard H. Black, both Loudoun Republicans, also said he expects lively debate about returning more state income tax money to counties and expanding corporate tax breaks.

May said he anticipates bills on topics such as telecommuting, the legality of computerized signatures and rules for electronic commerce, signaling that Loudoun--like much of Northern Virginia--"is no longer an agrarian, mining and manufacturing economy, but a technology economy."

One of the more controversial issues this year will be how to fund transportation initiatives, the legislators said. The $2.5 billion that Gov. James S. Gilmore III (R) has proposed setting aside for transportation over six years is "not enough," Mims said.

Part of the governor's funding for roads could come from the state's settlement with the tobacco industry, according to May, who said that might anger southern legislators who are seeking compensation for tobacco farmers. It might also provoke legislators who would rather spend the money on health care.

Another part of the transportation fund could come from what Black called a controversial measure to change the point at which gasoline taxes are collected. Without tapping the tobacco money and changing the gasoline tax, Black said he and his Loudoun colleagues will be "scrambling to find another funding source" for projects such as improving Route 15.

Although the legislators said they are interested in the growth-management issues that dominated November elections in Loudoun and some other Northern Virginia communities, May said he was uncertain "how successful growth-management legislation is going to be."

Mims added that most such efforts will depend on the Loudoun Board of Supervisors, which now has a majority who say they support slowing the county's rate of growth.

According to Mims, one slow-growth measure that stands a good chance of passing would appropriate state funds for the purchase of development rights, although he said it probably would carry restrictions. For example, he said, land covered by the proposal--which essentially would compensate landowners for not developing their property--might be required to have historic or environmental value.

The breakfast was sponsored by Washington Gas and the Loudoun County Chamber of Commerce. Business leaders in the audience sought the legislators' support on two issues: returning more personal income tax money to Loudoun and offering tax breaks to companies who want to locate in Loudoun.

A group of Northern Virginia technology companies is lobbying for tax breaks on the ground that they create high-paying jobs and expand the tax base without polluting the environment. Mims said this represents a major shift from years past, when companies that lobbied for tax breaks were those in threatened industries such as coal mining.

"It will be real interesting to see how the General Assembly deals with [their] proposal," he said.