Leading members of Virginia's House of Delegates learned yesterday that they will have a healthy surplus as they craft the state's next budget, but that could set up a showdown with the Senate over how much money to use for new transportation programs.
Meeting in Loudoun County for their annual retreat, members of the House Appropriations Committee said the promising numbers suggest that tax increases should not be necessary when the legislative session opens in January, even to pay for improvements to the state's road network.
That could put Republican delegates at odds with colleagues in the Senate, where a commission is working on a transportation package expected to necessitate raising billions of dollars in new funds.
According to new budget figures presented to delegates yesterday by Appropriations Committee staff, the state's continued economic growth will mean that lawmakers will have about a $1.8 billion surplus over the next two years -- even after the state pays for legally mandated increases in education and health care and puts millions toward cleaning up the Chesapeake Bay.
Despite the optimistic picture, state delegates warned that $1.1 billion of the surplus will come from a one-time windfall -- tax revenue from 2005 -- that should not be allocated to expensive, new programs that would have annual costs.
"This is just the money that we happen to have this year," said Appropriations Committee Chairman Vincent F. Callahan Jr. (R-Fairfax). "There is a consensus not to initiate new programs."
Instead, Callahan suggested that a "very large chunk" of the additional general fund money be devoted to transportation improvements. A tax increase to provide new, continuing revenue for roads, he said, would be unlikely to succeed in the House.
"You might see some proposal, but I don't think you'll see any successful proposal, especially if it involves increasing the tax on a gallon of gasoline," he said.
Senate Finance Chairman John H. Chichester (R-Northumberland), who attended yesterday's session, said he hoped this year's session would go beyond a one-time infusion to the state's aging infrastructure.
"I'm really hopeful we can come to a consensus on a long-term transportation package that lasts well beyond all of our horizons," he said.
The conflicting perspectives could foreshadow a clash between the House and Senate that could mimic the 2004 legislative session, when Chichester proposed a $4 billion tax increase to raise spending for state schools, public safety, health programs and transportation while the Republican leadership of the House insisted that there was no need for any tax increase.
"We're willing to look at any and all suggestions they make," said Del. R. Steven Landes (R-Augusta). "But I don't think any increases in taxes are viable at this point."
In 2004, a deal was brokered by Gov. Mark R. Warner (D) after an extended 115-day session in which 17 Republicans in the House supported a more modest $1.5 billion increase that put new money into schools and public safety but not transportation.
Gov.-elect Timothy M. Kaine (D) has indicated that transportation will be a major priority, outlining a schedule for town hall forums to discuss the topic before January. However, he has also said he will support no new money for roads until the state locks up its transportation trust fund, mandating that it not be spent on other needs.
That kind of lock has been a top priority for Republican delegates, who indicated yesterday that it is an area where they might find common ground with the new governor.
Another of Kaine's campaign promises, however, received less support: universal preschool for 4-year-olds.
Several delegates said they would be unlikely to fund a program that would represent a new, yearly expenditure out of the surplus.
"We don't have the capacity in the state of Virginia to educate all 4-year-olds," said Phillip A. Hamilton (R-Newport News). "We don't have the building capacity or the teacher capacity. Before we would look at it, I'd at least want to have an idea of how to pay for it."