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Budget battle could be fierce as close nears

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RICHMOND — The real work of the legislative session begins tomorrow when lawmakers in each chamber are expected to pass budget proposals that will be forwarded to a conference committee that will negotiate a spending compromise.

Differences over how to make up for a projected slowdown in revenue growth nearing $2 billion through 2010 portend two weeks of fierce negotiations between the Democrat-controlled Senate and the Republican-controlled House.

Some legislators yesterday said they would not be surprised to see the disagreements push the session into overtime.

"I think that it is even more likely now then before because the Senate has produced a budget that drains $180 million in transportation funds, funds a ridiculous General Assembly building and raises the gas tax," said Delegate David B. Albo, Fairfax Republican.

Gov. Tim Kaine remains optimistic that lawmakers can agree on a deal before March 8, the scheduled adjournment date.

"He believes the General Assembly should be able to get its work done on time," said Gordon Hickey, his spokesman.

The 2004 and 2006 General Assembly sessions — the last two sessions during which Virginia governors presented state budgets — went into overtime. In each instance the Senate, which was controlled by Republicans, included tax increases in the budget despite opposition from House members.

"Unlike previous years, so far, the two sides that are lining up are the House and the Senate GOP versus the Democratic senators and the governor," said Sen. Kenneth T. Cuccinelli II, Fairfax Republican. "So, given some of the fundamental differences, it is possible that we go long — again."

Last week, Mr. Kaine, a Democrat, provided a new forecast that projected revenue about $1.4 billion short of the $78 billion budget he introduced in December. To plug the financial hole, he recommended scaling back spending, trimming agency budgets and dipping further into the state's savings.

The revised forecast was in addition to the $400 million in cuts the governor offered late last year to address what was then thought to be a $641 million shortfall in the budget that runs through June 30.

The House and Senate money committees both passed budgets that include more funding for mental health reforms — a response to the Virginia Tech shootings in April.

Other than that, the budget proposals are worlds apart.

Senate Democrats want to borrow nearly $220 million to fund a new legislative office building for the General Assembly. Republicans say that, along with many of the other Democratic initiatives, is a non-starter.

The House proposal converts about $465 million in cash general fund spending Mr. Kaine had prescribed in December into debt, including $180 million in transportation spending. It also cuts about $500 million in bonded projects Mr. Kaine had proposed.

The House also wants to use about $220 million from the state's $1.2 billion "rainy day" reserve fund to close the projected revenue shortfall in the current budget.

Meanwhile, the new Democratic leadership in the Senate plans to increase the gas tax 5 cents over five years, to use $423 million out of the rainy day reserve and leave intact Mr. Kaine's proposal to expand pre-kindergarten for 4-year-olds from low-income families.

"I believe that the Senate Democrats believe in the governor's budget just as strongly as we believe you shouldn"t raid the rainy-day fund to pay for new programs and that you should cut school construction or raid the lottery profits to pay for new programs," said Sen. William C. Wampler Jr., Bristol Republican.

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