- The Washington Times - Monday, February 18, 2008

RICHMOND (AP) — The Republican-run House Appropriations Committee approved an austerity budget yesterday that cuts the governor’s preschool initiative and funds 2 percent pay raises.

The Senate Finance Committee, however, endorsed a budget far more friendly to Gov. Tim Kaine’s signature initiatives but over discordant protests by the panel’s Republican minority.

With a slowing economy reducing expected state revenues by nearly $2 billion over the next 2½ years, the House proposal prescribes retrenchment in nearly every sector of state government.

The Republican-run House and Mr. Kaine, a Democrat, agree on the difficult times ahead, but they differ on which programs to save and which to sacrifice.

The House proposal converts about $465 million in cash general fund spending Mr. Kaine had prescribed in December into debt, including $180 million in transportation spending. It also cuts about $500 million in bonded projects Mr. Kaine had proposed.

The House also recommends using only about $220 million from the state’s $1.2 billion “rainy day” cash reserves to cushion the projected revenue shortfall on the current budget. Mr. Kaine initially had recommended about $261 million but increased it last week to $423 million.

Mr. Kaine’s proposal to boost driver’s license renewal fees by $10 but expand renewal periods from five years to eight years is deleted from both the House and Senate recommendations.

Pay raises for state government employees, teachers and state-supported local employees also got downsized. In December, Mr. Kaine proposed a 3.5 percent boost in teacher pay and 3 percent for state employees in July 2009, with no 2008 pay raise. Last week, he scaled those back to 2.5 percent and 2 percent, respectively.

The House budget would fund 2 percent raises effective in November but nothing more. The Senate plan includes 2.5 percent for teachers in December 2009 and 2.5 percent for state employees in November 2010.

One of Mr. Kaine’s signature initiatives — expanding the enrollment in pre-kindergarten programs by about 50 percent over the next two years — is eliminated in the House budget. It takes about $32 million that would have been used to expand preschool programs for working-class children.

Also cut was Mr. Kaine’s proposal to provide $7 million in state subsidies to help businesses that employ two to 50 persons provide health care for uninsured workers who earn up to twice the federal poverty level, or $41,000 for a family of four.

For the first time in decades, the Senate panel split along party lines in a 9-7 vote endorsing most of what Mr. Kaine proposed, including the rainy-day fund withdrawal. Republicans on the committee were especially irked that Mr. Kaine still wants to expand pre-kindergarten programs, even as he dips into the state’s financial reserves.

“We believe that the rainy-day fund should not be used to fund new programs that will remain in the base budget for years to come,” said Sen. William C. Wampler Jr., Bristol Republican, who presented a rough outline of a Republican-backed alternative budget. “The rainy-day fund should be reserved for protecting our core services during exceptionally tough times after we have exhausted all other options.”

The Republican alternative called for, among other things, a 6 percent across-the-board cut in state agency spending — double what Mr. Kaine has recommended.

Sen. Charles J. Colgan, Prince William Democrat and committee chairman, said the Republican dissent marked the first time in his 29 years in the Senate that the panel’s budget failed to get an unanimous vote. Mr. Colgan said the pre-kindergarten expansion is “really a drop in the bucket” in a $75 billion spending plan.

He said Democrats and Republicans would try to resolve differences. If they fail, Mr. Colgan said, a split vote in the closely divided Senate could weaken the body’s position in budget negotiations with the House.

The full House and Senate vote on the budget proposals of their money committees Thursday.

One concession to the hard times is that state grants to nongovernmental, nonprofit entities such as museums and parks were cut completely from the House budget.

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