- The Washington Times - Friday, December 14, 2001

Virginia Gov. James S. Gilmore III yesterday proposed that the state borrow $926 million to fund new medical research buildings, dormitories and other construction needs at state universities and colleges.
About $608 million in bonds would have to be approved by voters in a referendum in November if the General Assembly and Gov.-elect Mark R. Warner, a Democrat, approve the move. The remaining $318 million would come from Virginia College Authority Building bonds, which do not require voter approval.
Mr. Gilmore, a Republican, said the bonds are an untapped resource to get much-needed money for the construction of buildings and facilities that state higher education leaders have long clamored for, saying Virginia was falling behind in competitive research and that they would turn away potential students if more dorms and classrooms were not built or renovated.
"This is the right time to utilize this underutilized resource," Mr. Gilmore told a George Mason University audience in Fairfax County that included state college and university presidents.
The $927 million proposal would provide funds to all of the state's 16 public colleges and universities and to its 23 community colleges. Among the recipients, George Mason is in line to receive more than $75 million; Virginia Tech, $108 million; the University of Virginia, $77 million, and the state's community college system more than $139 million.
Since Mr. Gilmore took office in 1997, his administration has issued about $700 million in bonds, much lower than his predecessors. Former Gov. L. Douglas Wilder, a Democrat, issued $1.7 billion worth of bonds that included more than $612 million for higher education, mental health and parks that voters approved 10 years ago.
Virginia has a AAA bond rating from the top three bond houses in the country, Mr. Gilmore said, making the decision to borrow that much easier.
He said the state will get the lowest possible interest rates because of its good credit rating and high debt threshold.
State Delegate Vincent F. Callahan Jr., Fairfax County Republican and chairman of the Appropriations Committee, said he plans to offer his own bond proposal and was "elated" with Mr. Gilmore's announcement.
"We are way behind in our capital projects," Mr. Callahan said. "It's a good start."
Mr. Warner said in a statement that he was abit wary of Mr. Gilmore's plan.
"It is critical that we deal with the urgent capital needs of our colleges and universities. But first and foremost, we must be fiscally prudent and produce a budget that is structurally in balance," Mr. Warner said. "Until we know the true extent of the fiscal problems the Commonwealth faces and have the opportunity to propose a plan to address them, I think it is premature to support any specific debt package."
Secretary of Finance John W. Forbes said the 20-year bonds "are the cheapest way for" the state to finance capital projects. Mr. Forbes said there is no correlation between the state's projected $1.3 billion revenue shortfall and Mr. Gilmore's bond plan, which will be included in the his final two-year budget he presents next week to the House and Senate budget committees.
"I wish that in today's economy we could provide the same kind of cash infusions as in recent years," Mr. Gilmore said.
But since it can't, he said, bonds are the best way for construction to begin at the state's colleges and universities.
During last year's General Assembly, a stalemate between the legislature and Mr. Gilmore over the pace of the phaseout of the car tax forced Mr. Gilmore to make more than $ 421 spending cuts to keep the budget balanced, which included a freeze of about $275 million in college construction projects not under contract.
Mr. Gilmore's announcement came a day after a Virginia Commonwealth University poll showed 71 percent of Northern Virginians want education to be the top priority for Mr. Warner and the legislature.

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