- The Washington Times - Thursday, February 26, 2004

RICHMOND — The House and Senate passed their own budgets yesterday, but lawmakers say the differences between the two proposals are so vast that it is unlikely a consensus can be reached by the General Assembly’s adjournment next month.

The House voted 65-35, along party lines, to pass its two-year, $58 billion budget, which raises $520 million by eliminating exemptions for business industries. Its budget, which is based on the tax plan and predicts economic growth, funds the state’s basic needs at a level similar to the past year, and does not call for new programs or transportation projects.

Earlier in the day, the Senate voted 30-9 to pass its two-year, $61.5 billion budget, which includes a $3.8 billion plan that raises the sales, gasoline and cigarette taxes, and adjusts income tax brackets. Its budget calls for substantial new spending for transportation and education, and allocates more money to state programs than the $59 billion budget Gov. Mark Warner proposed in December.

Neither budget fully phases out the car tax, which is now frozen at 70 percent, or gives teachers pay raises, two elements Mr. Warner included in his proposal. That means the burden now shifts to local governments to provide teacher pay raises.

Mr. Warner, a Democrat, had called the Senate plan “aggressive,” but did not come out in favor of either plan. “The Senate plan incorporates many parts of our plan, but I’ve got concerns about pieces of each plan,” he said earlier this week.

Each proposal now heads to the opposite chamber for its traditional rejection. The rejections force a few powerful House and Senate lawmakers into conference committee negotiations, a private series of meetings where a budget ultimately will be finalized.

The House Finance Committee on Wednesday rejected the Senate’s $3.8 billion tax plan. The Senate Finance Committee, however, kept the House’s plan alive as a negotiating tool. The move did nothing to avert a feared impasse on drafting a new two-year state budget.

If lawmakers don’t present a balanced budget by June 30, the government will be forced to shut down.

Earlier in the week, House Speaker William J. Howell had asked Sen. John H. Chichester, the Senate’s president pro tempore, to help both chambers expedite votes on budget bills and quickly work toward a consensus.

The two Stafford County Republicans seemed to have reached an agreement. But after Mr. Chichester’s tax plan was killed Wednesday, he withdrew his agreement. “It sounds to me like they have no intention to compromise,” Mr. Chichester said.

Lawmakers now say they fear the negotiations will go beyond March 13, when the session adjourns.

Sen. Jay O’Brien, Fairfax County Republican, agreed with a delegate’s assessment that the chasm between the House and Senate budgets was deeper than the Grand Canyon.

“They are starting from two such disparate points and coming from two different objectives,” said Mr. O’Brien, who voted against the Senate budget.

“The House budget is drawn to meet obligations of the state and nothing more. Senator Chichester has a vision for a new Virginia. His vision costs money and the taxpayers pay for it.”

Sen. Kenneth T. Cuccinelli, Fairfax County Republican who also voted against the tax plan, said it was “so hard to swallow” and that the $3.8 billion is “hard to even say it with a straight face.”

But those in favor of the Senate’s budget argue it is an investment in Virginia’s future.

Mr. Chichester said his budget and tax plan “goes a long way toward reducing pressure on the pocketbooks of our citizens.”

The Senate budget provides $983 million on top of the $761 million increase Mr. Warner recommended for public education. The House budget bests Mr. Warner’s proposal by only $71 million.

The Senate budget also provides an additional $100 million a year for core college academic programs, $44 million to provide services to an additional 880 mentally disabled Virginians living at home or in group homes, and funding for 100 additional prison guards.

Democrats in the House have urged lawmakers to reject the House budget, saying the state’s core values of education, transportation and public safety are being threatened.

But House Appropriations Chairman Vincent F. Callahan Jr. said yesterday the House has a “perfect budget” that heeds the advice of “three wise men” — Mr. Warner, U.S. Sen. John W. Warner, Virginia Republican, and Steve Kantor, a financial analyst who told lawmakers earlier this year the state was in danger of losing its AAA bond rating.

“This bill represents the rising of the budget phoenix,” said Mr. Callahan, Fairfax County Republican. “For the first time in four years, not only does this budget allow us to address core services in education, health care and public safety, but we are able to begin reinvesting in economic development and natural resources.”

The House plan uses at least $22 million from the state pension fund for general appropriations, cuts the Department of Taxation’s funding by $1.2 million and decreases overall health and human resources funding by $42 million.

The House plan also removes $272 million that Mr. Warner’s budget directed from the general fund to the priority transportation fund. The money would come from one-half of a penny paid on the 4.5 percent sales tax.

The House budget writers cut $2 million the governor proposed to promote economic development in distressed areas and $500,000 to tout the state as a motor-sports venue. They also cut $2 million Mr. Warner wanted to market the Jamestown settlement 400th anniversary events in 2007.

The plan also freezes state aid to local law-enforcement at 2004 levels, trims $16 million Mr. Warner proposed for state per diems to local jails, and cuts another $3.2 million he recommended for pay incentives to retain state police officers.

Mr. Warner’s $5.7 million proposal to perform public school efficiency audits was also stripped from the House version, as was more than $5 million he sought for the Taxation Department to crack down on tax delinquents.

This article is based in part on wire service reports.

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