- The Washington Times - Friday, June 16, 2006

RICHMOND — State legislators reached a tentative agreement yesterday on a new state budget, ending an unprecedented stalemate just two weeks ahead of what would have been a fiscal and constitutional crisis.

The compromise, 96 days late, sets up a frantic scramble to push the $72 billion, two-year spending plan through the full House and Senate, gubernatorial review and legislative reconsideration of vetoes and amendments by June 30.

After weeks of dickering and bickering, false starts and abrupt halts, the deal fell into place after rival House and Senate negotiators agreed to continue new transportation funding later this year.

The agreement no longer has approval of new, permanent taxes, fees or both for road, rail and transit projects as a condition for the allocation of $339 million in general funds for transportation projects next year.

The proposal now goes before the full Senate for approval on Monday and before the House on Tuesday. Gov. Timothy M. Kaine will have up to seven days to amend or veto line items in the budget.

Looking exhausted but relieved, the six House members and five senators announced their agreement at 6:45 p.m.

“We’re tired but happy,” said Sen. John H. Chichester, Stafford Republican.

The accord ended a clash regarding efforts by the Senate and Mr. Kaine to boost transportation taxes by about $1 billion annually and the unbending resolve against any new taxes by the House’s majority Republicans.

“This is what this was all about, who are we kidding,” said Delegate M. Kirkland Cox, Colonial Heights Republican.

House Republican leaders insisted that embedding taxes into an appropriations bill is unconstitutional. Tax bills have to be separate measures, they argued.

Transportation was the marquee legislative issue of 2006. Mr. Kaine successfully campaigned on it in the governor’s race last year and held two dozen town-hall-style forums across the state to whip up support for it.

Mr. Kaine was relieved to see a budget in place, but is not conceding the unlikely possibility of increased fees or taxes for transportation when lawmakers take up the issue, said press secretary Kevin Hall.

“No one is claiming the discussion is over,” Mr. Hall said. “House leaders have said in recent weeks they wanted to take care of the two-year budget and return to transportation and we take them at their word.”

Other key agreements in the new budget include:

• Fully repealing the estate tax — a posthumous levy on the estates of millionaires — at a cost of $35 million over the next two years, but at an estimated annual revenue reduction approaching $130 million after that.

• Pay increases of 4 percent during the coming year for all state employees, state-supported local employees and public school teachers; the following year, state workers and state-subsidized local workers would get 3 percent raises with 1.5 percent boosts reserved for teachers.

• $25 million over two years to help preserve the Oceana Naval Air Station in Virginia Beach, targeted for closure by the federal Base Realignment and Closure Commission, as a military base.

• $200 million for Chesapeake Bay cleanup; $17 million to clean up Virginia rivers outside the Chesapeake Bay Watershed; $55 million for the Water Quality Improvement Fund.

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