- The Washington Times - Thursday, December 20, 2001

RICHMOND Gov. James S. Gilmore III yesterday proposed a biennial, $51 billion budget that would fund pay raises for state workers, complete the phaseout of the car tax by 2004 and hold the line on new taxes as the state expects to lose nearly $2 billion in revenue over the next two fiscal years.
Mr. Gilmore, a Republican, recommended taking $467 million from the state's $934 million "rainy day" fund and using $652 million from a transportation trust fund to balance the budget. He also proposed cutting spending by $978 million and allowing state colleges to raise tuition fees to help solve the state budget crisis.
Virginia's economy is projected to recede by 1.4 percent through June 30, when the current fiscal year ends. The state is facing a $1.3 billion revenue loss for the current year.
"I have had to make many difficult decisions decisions that no governor would want to make," Mr. Gilmore told members of the Republican-led House and Senate money committees yesterday. "But many Virginians are making sacrifices during this difficult time. The government should be expected to do the same."
Mr. Gilmore's budget got a critical response from Democratic Gov.-elect Mark R. Warner, who said his administration will devise its own budget, one that will "promote fiscal responsibility."
"We've seen pay raises, car tax phaseout and additional spending," Mr. Warner said at a press conference. "There is a structural imbalance in the state's budget and today's proposal has made it worse."
Mr. Warner, who takes office Jan. 12, said there will be spending cuts but no increase in taxes. "Everyone's belts will have to be tightened," he said. "There will be cuts. There will be pain."
Other lawmakers said Mr. Gilmore's lame-duck budget will be rewritten.
"It has glaring deficiencies in transportation and education," said state Delegate Brian J. Moran, Alexandria Democrat. "This reminds me of my 17-month-old daughter. She always leaves behind a mess for somebody else to pick up. This budget is going to need a lot of analysis and a lot of work."
Delegate Whittington W. Clement, Danville Democrat, agreed: "The budget will be probably unrecognizable come March or April."
One of the most controversial items Mr. Gilmore proposed is his "alternative funding strategy," which would enable the state to transfer $653 million from the Transportation Trust Fund to the general fund. The money then would be available for spending on programs not related to roads and mass transit.
Lawmakers disagreed with Mr. Gilmore's contention that no transportation projects will be disrupted.
"He wants to take from the Transportation Trust Fund money that is already designated for real projects and replace them with IOUs?" state Delegate John A. "Jack" Rollison, Prince William Republican, told the Associated Press. "There's a reason they call this a 'trust' fund."
In his budget, Mr. Gilmore would set aside at least a 2 percent increase in pay for all state workers, including teachers and college faculty. The pay increases, which would total about $290 million, would be implemented next December.
"I believe public employees, who are critical to our success during this difficult time, should be rewarded for their hard work," the governor said.
Mr. Gilmore also would set aside $28 million to fully fund the increased cost of contribution rates for the retiree health care credit, the employee group life insurance program and the state's Sickness and Disability Program.
The budget would allocate $416 million to fully fund the Standards of Quality for public education and another $5 million to strengthen the Standards of Learning, a mandatory standardized test that students must pass to advance to the next level.
Another $20 million would be set aside to fund anti-terrorism and security efforts. In addition, Mr. Gilmore proposed issuing $16 million in bonds to pay for a new state emergency-operations center.
"Our top priority must be protecting our people and property against future terrorist attacks." h
Mr. Gilmore proposed a nearly $1 billion bond initiative to fund construction on college campuses. "The people of Virginia own every brick and every column on every public college and university campus of Virginia," he said.
Besides tapping the rainy day fund to balance the budget, Mr. Gilmore proposed that the state work with localities to draw down $259 million in federal Medicaid funds.
The budget also would use $18 million from reductions in the rates Virginia pays into the public employee retirement system and another $46 million from freezing the car-tax repeal until 2004. The repeal would stay at a 70 percent reduction until then.
In addition, Mr. Gilmore recommended that non-general fund, legislative and judicial agencies cut spending by 2 percent this fiscal year and 4 percent in fiscal 2003, which would total $410 million in cuts.
Mr. Gilmore said state colleges and universities should be able to raise tuition to $100 per student per semester, but also asks colleges to find $133 million in savings.
For the next biennium, Mr. Gilmore proposed taking the state's share of the national tobacco settlement in a lump sum, adding an extra $418 million in cash for fiscal year 2003. The money would be placed in an education and economic development trust fund.
"This is a financially prudent course," Mr. Gilmore said. "In fact, it would be fiscally irresponsible not to adopt this policy."
A similar Gilmore proposal was rejected by the Senate Finance Committee last year.

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