$77 billion budget ready for lawmakers' vote

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RICHMOND — House and Senate budget negotiators yesterday finalized a $77 billion, two-year spending proposal that lawmakers will take up today when they return to the Capitol.

"It was a hard budget and hard economic times," said Sen. R. Edward Houck, Spotsylvania Democrat. "I think one of the things that happened in this particular budget conference is there were a lot more philosophical differences."

A projected revenue slowdown is expected to leave a $980 million shortfall in the budget through June 30 and nearly $2 billion by June 2010. Lawmakers reached the agreement after extending the General Assembly session for the third time in four years.

The 12 budget negotiators made a handshake deal after resolving differences on public safety.

The Senate dropped a $4.6 million demand for jail-diversion programs for prisoners finishing their sentences. In exchange, the House agreed to appropriate $7 million for 14 drug courts.

The package grants $2.6 million for regional jail expansions in western Virginia and Rappahannock and $1.5 million for Alicia"s law, a program that targets adults who solicit children for sex over the Internet. The law is named for Alicia Kozkeiwicz, who was kidnapped and sexually assaulted by an online predator when she was 13.

The negotiators said they were flooded with calls from supporters across the country, including Alicia"s mother.

"Every time you bring a computer into your home, you provide online predators with access to your children," said Delegate Brian J. Moran of Alexandria, the leader of the House Democratic Caucus.

On Monday, he made an emotional plea for the funding. "Law-enforcement officers have not had the resources to combat these crimes, but today we have taken a major first step by expanding two regional task forces to investigate and arrest these offenders," Mr. Moran said.

Also under the agreement, state employees, state-supported college faculty and state-augmented local government employees get a 2 percent raise this fall and another 2 percent raise in July 2009. Teachers also are included.

"Negotiations were hard-fought," said Senate Finance Committee Chairman Charles J. Colgan, Prince William County Democrat. "This was my 17th time as a budget conferee. I can remember when it took longer, but never when we worked harder."

Gov. Tim Kaine, a Democrat, received $22 million for his initiative to expand a pre-kindergarten program, but the House refused to adopt his proposal to widen income-eligibility requirements.

"We did 100 percent of the free-lunch kids," said Delegate Phillip A. Hamilton, the Newport News Republican who sits on the negotiating team. "I would think the governor would be pleased with the pre-K."

Kaine spokesman Gordon Hickey said the governor "is pleased that it is being expanded at all."

Also not funded was the governor's Virginia Share proposal to offer health insurance to small-business employees. The program called for one-third of the insurance costs to be split equally by employee, the worker and the state.

Negotiators cut $100 million in aid to localities over two years from what was outlined in the budget Mr. Kaine introduced in December and directed the governor to slash $35 million from state agencies, with the exception of higher education.

The plan also reserved $42 million to reform the state's mental-health system — a direct response to the April shootings at Virginia Tech.

Negotiators added 600 Medicaid waivers for mentally disabled people to receive community-based services, such as in-home nursing care, to avoid placing them in state institutions.

To close part of the budget shortfall, lawmakers pulled $296 million from the state's reserves, commonly known as the "rainy day fund."