Friday, December 15, 2006

RICHMOND — Gov. Timothy M. Kaine, outlining his 2007 budget amendments yesterday, proposed spending $1 billion of the state’s surplus on roads, tax breaks for the working poor, teacher pay raises and cleanup of the Chesapeake Bay watershed.

“Transportation remains the most urgent problem facing Virginia today,” Mr. Kaine told members of the state House and Senate finance committees in a 40-minute address. “Virginians are frustrated with the failure to reach a comprehensive solution in 2006.”

Based on a robust but cooling Virginia economy, Mr. Kaine’s budget projects an unappropriated balance of about $690 million from the present fiscal year. That, along with $339 million budgeted but never appropriated for transportation this year, gave Mr. Kaine, a Democrat, more than $1 billion to spend.

The governor’s amendments include a one-time infusion of about $500 million for transportation, a $250 million bond package for upgrading water treatment plants across the Bay watershed and increasing the minimum income tax filing threshold for the state’s poorest workers.

Under the tax plan, the threshold would jump from $7,000 to $14,000 for an individual and $14,000 to $24,000 for a married couple. The plan would cut state revenues by an estimated $28 million.

“The change would take over 300,000 Virginians off the income tax rolls,” Mr. Kaine said.

A portion of the additional transportation funds would be earmarked for public-private construction projects on the Capital Beltway and Route 50 in Fairfax and Loudoun counties.

Mr. Kaine’s plan also called for $64 million to cover the state’s share of 3 percent pay raises for teachers beginning next December, and $100 million in additional health care spending.

Despite optimism related to Mr. Kaine’s tax-break proposal, transportation funding remained heavy on the minds of legislators yesterday.

Mr. Kaine said the additional money for roads and mass transit is far from what is needed statewide and in the most congested areas of Northern Virginia and Hampton Roads.

House Republicans support long-term borrowing, and using more of the state’s surplus for roads and mass transit, while opposing tax increases.

Mr. Kaine, Senate Republican leaders and House Democrats favor new long-term revenue sources to bolster the state’s transportation funding formula, which has not changed since 1986 and depends primarily on gasoline taxes.

Mr. Kaine would not elaborate on the transportation package he plans to push in the legislative session that starts next month, but sounded poised to stick to his call for long-term revenue, which could mean new taxes and fees.

“Things don’t always happen the first time you ask,” he told reporters after his speech yesterday. “You have to stay at the table and be persistent to find solutions.”

Although Republicans were somewhat happy that Mr. Kaine opted to use some of the state’s surplus for transportation, they remained skeptical of the governor’s desire to reach a compromise before the 2007 election when all 140 seats in the General Assembly are up for grabs.

“I’m not sure he wants a transportation package,” said Delegate M. Kirkland Cox, Colonial Heights Republican. “I think he is ready to hit the campaign trail.”

House Speaker William J. Howell said Mr. Kaine’s amendments put transportation “on the back burner.”

The Stafford County Republican again urged Mr. Kaine to use more of the state’s surplus, take advantage of the state’s bond power and support abuser fees. He also said the House will push land-use reform and strive to improve performance at the Virginia Department of Transportation.

Delegate Jeffrey M. Frederick, Prince William County Republican, said Mr. Kaine’s amendments were “full of contradictions.”

“He says on one hand that transportation is our most urgent priority, but he refuses to make it our most urgent priority in the budget,” he said.

Delegate Franklin P. Hall, Richmond Democrat, said the Republican notion that Mr. Kaine would rather have lawmakers go into the 2007 election without a transportation solution is “what’s known as spin.”

“If we get it done in any sort of reasonable fashion, it is going to benefit everybody,” Mr. Hall said.

• This story is based in part on wire service reports.

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