- The Washington Times - Thursday, March 7, 2002

RICHMOND The House of Delegates and Senate struck a budget deal last night that gives Virginia state employees and teachers a bump in pay, restores millions to a key road-building fund, and makes deep funding cuts to agencies and programs.
The nine senior lawmakers who are part of the conference committee charged with reaching an agreement raced against their second midnight deadline in two days to come to a compromise over how to plug a $3.8 billion budget shortfall through 2004.
"I think we've done well, it's a good budget for Virginia," Delegate James H. Dillard II, Fairfax Republican and member of the conference, said of the two-year, $51 billion budget. "I am very optimistic that the governor is going to like this budget."
The Republican-controlled General Assembly has until Saturday, when it adjourns, to vote on the budget during this session. In addition to voting on the 2003-2004 budget, legislators will also have to approve amendments to the current budget to close a $1.2 billion gap. There is a $2.6 billion hole in 2003-2004.
Another conference member, House Minority Leader Franklin P. Hall, Richmond Democrat, said that while the budget they agreed upon is in the best interest of Virginians, it was still hard to cobble together.
"There are a lot deeper cuts than we would have liked," Mr. Hall said. "This is clearly a budget that we will have to share the pain."
The cuts came across the board as percentages of state agency budgets as well as targeted cuts, lawmakers said.
For instance, there are 4 percent cuts to many health and human services programs as opposed to the 7 percent and 8 percent cuts proposed by Gov. Mark R. Warner, a Democrat.
But the Staunton Correction Center and several other detention facilities, including one in Fairfax County, would be closed as part of $43.1 million in reductions to the Department of Corrections.
The $30 million in fee increases Mr. Warner had called for to go to specific anti-terrorism programs will continue to be funneled into the general fund as the House had wanted.
The House-Senate agreement restores all $653 million to the Transportation Trust Fund that former Gov. James S. Gilmore III, a Republican, had wanted to use to plug the budget hole.
About $317 million in 2003 still will be transferred from the trust fund to the general fund to fill the budget gap, but it will be replaced with money the state has to borrow, but is expected to be paid back from anticipated federal highway funds in later years.
Robert Vaughn, the House Appropriations Committee staff director, said transportation will actually receive an additional $106 million over the two-year budget by depositing one-third of the insurance premium tax into the trust fund.
The rollback of the car tax remains at 70 percent through 2004, which means taxpayers will still pay their local government 30 percent of the personal property tax on vehicles valued up to $20,000.
The deal also provides $63.5 million in 2003 for a 2.5 percent bonus to state employees, agency heads and judges or two weeks additional vacation. There is also money for a 2.5 percent raise for faculty at public colleges and universities.
In 2004, there is $101.4 million that has been set aside that can provide up to 2.75 percent in raises for state employees, college faculty, state-supported local employees and teachers.
The major hang-up that lawmakers found this year was over "special project" spending. The House was going to slash from $23 million to $10 million the amount that would go to non-state agencies, such as museums and cultural centers across the state.
But the Senate wanted to also keep about $7.9 million worth of its special-project spending.
A compromise was reached though, said House Appropriations Chairman Vincent F. Callahan Jr., Fairfax Republican, where the Senate can spend all of its money on projects it sees fit and the House spend $6.25 million on those it deems important.
More details about the budget will be made available today, and the House and Senate could vote on it by tomorrow. There were still four small items that the delegates and senators had to resolve, but they were not seen as issues that could unravel the deal.
In fact, all of the negotiations were done with the full knowledge that they had to redeem themselves this year after failing to produce a budget last year, a first in the history of the state.
"This year was a slam dunk in comparison" to last year, Senate Finance Committee Chairman Sen. John H. Chichester, Fredericksburg Republican, said.
Mr. Chichester said that the "tough decisions" seemed to come back to the non-state agencies, but in the end lawmakers were able to find common ground.
Mr. Hall said before the budget was agreed to that the framework Mr. Warner and senior lawmakers established at the beginning of the session helped guide the conversation about what would and would not be on the negotiation table.
Lawmakers and Mr. Warner had agreed, among other things, that there would be no pay raises or bonuses over the next two years.
But Mr. Hall and other lawmakers said that as the state faces the possibility of laying off about 700 people over the next 28 months, there needs to be money in the budget that shows employees are valued.

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