Va. may get $5.8 billion from stimulus

The state may get as much as $5.8 billion from the federal economic stimulus package, but only about $1.3 billion of that can be used to offset the state's projected $3.2 billion budget deficit, House of Delegates budget-writers said today.

Robert Vaughn, director of the House Appropriations Committee, said other monies would be earmarked for transportation, clean-water programs, student-loan aid and special-education programs that are not financed through the general fund budget.

Because the Virginia Constitution requires a balanced budget, legislators are trying to patch a projected $3.2 billion hole in the general fund budget. That hole is expected to grow next week when January revenues are tallied.

Del. Lacey E. Putney, I-Bedford, chairman of the committee, said he hopes the General Assembly will have enough information on the final stimulus package in time for budget conferees to make adjustments to the state budget before the General Assembly is scheduled to end on Feb. 28.

That would be cutting things close. The House of Representatives has passed a stimulus package. The Senate is expected to begin debating its version next week. The Obama administration hopes to have a bill completed between Feb. 15 and Feb. 22.

The Appropriations Committee was briefed today on the latest figures the staff had learned about the "American Recovery and Reinvestment Act of 2009," the stimulus package.

Some legislators did not like what they heard. Although the money is supposed to be spent in two years, Del. M. Kirkland Cox, R-Colonial Heights, said some of the programs appeared to go far beyond that time frame, potentially leaving the state with long-term payments that would affect future budgets.

One of the provisions of the transportation funding, which would send an estimated $750 million to Virginia, requires the transportation projects to be built in economically depressed areas.

Del. Robert H. Brink, D-Arlington, pointed out that that could mean that Northern Virginia, which has the worst traffic problems but is economically prosperous, wouldn't get any money.

Vaughn said he thought the state could work around those federal strings.

The biggest source of money for the state from the stimulus package is $1.58 billion from a state fiscal stabilization fund. But that would be over a two-year period and thus the current budget would get only about $800 million from it, Vaughn said.

The next richest source of money would be about $550 million in Medicaid relief over fiscal 2009 and fiscal 2010, he said.

The state discretion in spending the federal money would be limited to K-12 and higher education modernization funding, the stabilization fund, highway spending and Medicaid. Other programs would be based on federal formulas.

Vaughn said the state would get about $230 million to use for elementary and secondary school construction and $146 million for higher education modernization of buildings, but not new construction.

Other goodies for Virginia in the package include up to $124 million for the Clean Water State Revolving Fund, $4 million for underground storage tank cleanup, $58 million for crime prevention, $13.7 million for unemployment compensation and $203 million for education grants for the disadvantaged.

Vaughn cautioned that the stimulus package is still a work in progress and could yet be changed, but he said the Senate and House appear to be in broad agreement on the final details.

Contact Tyler Whitley at (804) 649-6780 or .