2012.02.19
General Assembly committees produce budget plans
The General Assembly’s budget-writing committees produced competing two-year spending plans Sunday that pump additional state dollars into education and health care programs and take different approaches to transportation funding and shoring up the state’s underfunded pension system.
And in a preview of the political tug-of-war that could play out in the coming weeks, Senate Democrats served up a reminder that their votes will be critical to getting a budget passed. While Republicans have working control of the evenly divided Senate, they will need at least one Democratic vote to pass a budget because Lt. Gov. Bill Bolling does not have the authority to cast a tie-breaking vote on spending bills.
All six Democrats on the Senate Finance Committee voted against the budget bill produced by the Republican-controlled panel Sunday. Each house will pass its own budget bill on Thursday and the two sides will try to reconcile their differences before the General Assembly adjourns March 10.
The Republican-dominated House Appropriations Committee advances its budget bill with a unanimous vote.
The two budget bills contain more state spending than the $84.9 billion plan Gov. Bob McDonnell introduced in December. Both committees made schools and health care safety net programs top priorities in their revisions to McDonnell’s budget.
But the two plans also contain significant differences. The House plan diverts $94.6 million in sales tax revenue from the state’s general fund to transportation, fulfilling a McDonnell administration objective. The politically divided Senate, which is controlled by Republicans, did not include the sales tax shift in its plan.
“I think everyone in this room knows that knows that we need more money for transportation,” said Sen. Emmett Hanger, R-Augusta County. “But we shouldn’t be asked to pave more roads or build more bridges at the expense of K-12 education and health care.”
McDonnell said both budget plans appear to embrace his core objectives.
“I proposed that we not raise taxes, and instead that we prioritize existing state dollars to focus on the core functions of government most closely linked to job creation and economic recovery,” McDonnell said in a statement issued by his office. “In making their amendments today, the members of both committees have heeded this call, and signaled their clear partnership in what must be a bipartisan effort.”
House Appropriations Committee Chairman Lacey Putney, I-Bedford, said his panel’s proposal “will clearly and strategically focus our resources on keeping our promises to fund the core services of government.”
Senate Finance Committee Chairman Walter Stosch, R-Henrico County, said the Senate budget plan contains few new initiatives.
“What you will see is limited restoration of funding reductions in the key areas of public education and health care, along with targeted new investments in higher education and economic development,” Stosch said.
Both plans restore cuts McDonnell had proposed to free clinics, community health centers and the Virginia Health Care Foundation. Both budgets also increase Medicaid reimbursements for hospitals and nursing homes to account for inflation. McDonnell’s plan froze reimbursements.
“Adequate funding to our hospitals and nursing homes is not only important for the delivery of quality health care to the aged and disabled, but it also recognizes that our health providers are major employers, especially in rural Virginia.” Putney said.
The House plan also adds $136 million more than McDonnell had proposed for public schools. About $106 million of that amount would cover inflation adjustments for non-instructional costs such as maintenance and utilities that were not included in McDonnell’s budget . The Senate added $165 million more than McDonnell for schools, including $45 million in additional contributions for teacher pensions.
Both budgets include money fully fund a program to reduce class sizes in grades K-3 and to expand an early reading intervention program.
Part of the additional spending was paid for with a combination of additional revenue and balance transfers. More than one-third of the total – about $69 million – comes from Virginia’s share of a national settlement with mortgage bankers.
The Senate budget set aside nearly $62 million from the settlement in a reserve fund. Up to $50 million of that amount could be used in the upcoming fiscal year to offset a $60 million annual reduction in state aid to localities The House budget contains $70 million over two years to restore local aid, including $25 million that McDonnell proposed in his budget.
– Michael Sluss





