Panels' budget plans unsettled

Virginia lawmakers are rewriting Gov. Timothy M. Kaine's share-the-pain budget-balancing plan, relying -- in part -- on money they don't have.

The House and Senate money committees yesterday afternoon unveiled competing proposals -- fraught with uncertainty because of the recession and a pending handout from Congress -- to erase a shortfall that is expected to swell beyond the current $3.2 billion when January revenue collections are tabulated.

Del. Lacey E. Putney, I-Bedford, chairman of the House Appropriations Committee, acknowledged the question marks, calling it "a halftime budget."

For the Richmond area, the two packages are a mixed bag.

Neither increases state-worker salaries. Both include a new criminal-justice training center in Hanover County. The Senate, however, would close a juvenile prison in Hanover. The House wants to merge Richmond's aviation museum with a similar facility in Hampton.

The Senate is recommending, in effect, a hiring freeze for state police by postponing two training sessions for prospective troopers.

Complicating the budget process -- and perhaps pushing it beyond the General Assembly's scheduled Feb. 28 adjournment -- is uncertainty over how much money Virginia will receive from President Barack Obama's economic-stimulus package.

Robert Vaughn, director of the House Appropriations Committee, said Virginia stands to lose $800 million under the U.S. Senate's version.

Through communications director Lynda Tran, Kaine warned legislators not to rely on funds from Washington for long-term needs, particularly with the state likely facing additional declines in tax collections.

The House panel adopted its version of the budget without debate, 23-0.

As Kaine did when rolling out his version of the budget in December, both committees looked for savings in programs that previously were spared, including public education and health care for the poor.

In addition to shuffling dollars to pay for their priorities, both committees fell back on bookkeeping gimmicks to generate additional funds.

By cutting here and finding new revenues elsewhere, the House was able to add funding for K-12 education, higher education, public safety and mental health. It also set aside $65 million in a reserve fund to prepare for more bad budget numbers.

Though they take different approaches, the House Appropriations and Senate Finance committees rely on a one-time burst of $100 million that would come through stepped-up collections of sales tax from the biggest retailers.

Senate Minority Leader Walter A. Stosch, R-Henrico, criticized that feature as "borrowing money against the future."

The Senate Finance Committee is made up of nine Democrats and seven Republicans; the vote on its version of the budget was 9-4, with three abstentions. Stosch and the other six Republicans on the panel, including Sen. John Watkins of Powhatan, abstained or opposed the panel's revisions to the two-year, $77 billion budget. Both committees also are depending on an amnesty program next year that would allow Virginians to pay back taxes without penalty, possibly generating $36 million.

Senators clashed sharply over the loss of an additional $155 million, through higher state cigarette taxes, to close a hole in Medicaid, which underwrites health services for the poor.

The tax increase, proposed by Kaine, was killed for the year in the Finance Committee on a largely party-line vote last week.

Sen. R. Edward Houck, D-Spotsylvania, said the defeat forced spending cuts elsewhere to prevent deeper reductions in Medicaid.

Sen. Kenneth W. Stolle, R-Virginia Beach, accused Democrats of using the proposed doubling of the tobacco tax as "bribery and extortion" to protect funding for health care.

Putney, the leader of the House Appropriations panel, noted that he has been in the General Assembly for 47 years.

"I must say this has been one of the most challenging of any of them," he said.

As usual, the Sunday budget sessions drew a horde of lobbyists who lined up in the hallways to get summaries of the two budgets.

Contact Jeff E. Schapiro at (804) 649-6814 or jschapiro@timesdispatch.com.

Contact Tyler Whitley at (804) 649-6780 or twhitley@timesdispatch.com.