House, Senate budget plans compete for approval

Virginia's House and Senate budget-writers are laying out competing hard-times spending plans that slash health care for the poor and increase class sizes but don't raise taxes.

Breaking with Republican Gov. Bob McDonnell, the House Appropriations Committee rejected state worker furloughs altogether, including one proposed for May by his Democratic predecessor, Timothy M. Kaine.

The Senate Finance Committee recommended that employees take six furlough days over the next two years -- four fewer than McDonnell recommended.

However, both panels sided with McDonnell over a revision in the public employee retirement system to generate $508 million for day-to-day expenses.

"In my 49 years in the legislature, I have never seen a budget situation this bad," said Del. Lacey E. Putney, I-Bedford, chairman of the Appropriations Committee.

Facing a shortfall estimated as high as $4.5 billion, Virginia's divided legislature is struggling to balance a two-year budget while preserving popular programs without increasing taxes.

Kaine's proposed budget included $2.3 billion in proposed cuts. But lawmakers rejected Kaine's proposal to scrap $1.9 billion in car-tax relief for localities and make it up with an income-tax increase. That left lawmakers seeking about $2 billion more.

The House and the Senate seek to shelter colleges and universities from additional cuts, but they could require local schools to increase class sizes. However, both chambers give localities some flexibility in determining class sizes.

The Republican-led House and the Democrat-led Senate are expected to approve their drafts of the budget Thursday afternoon.

Then, about a dozen senior delegates and senators will fashion a compromise that both chambers would approve just ahead of the General Assembly's scheduled adjournment, March 13.

"The parameters governing the budget-making process from this point forward are set," McDonnell said in a written statement.

"We will work together across party lines to cut spending while not raising taxes. . . . There are no easy choices in closing the $4 billion budget shortfall that is unparalleled in Virginia history."

Putney held out the hope that federal money would allow the state to restore some Medicaid cuts next year and enable the state to give its employees a 3 percent bonus in December 2011.

"While this economy presents huge challenges, we may be beginning to see the light at the end of the tunnel," said Sen. Charles J. Colgan, D-Prince William and chairman of the Finance Committee.

Seven of the eight Democrats on the House Appropriations Committee voted against the bill, without explanation.

The Senate panel approved its budget nearly unanimously. Republican Leader Thomas K. Norment Jr. of James City County said later that his party may challenge elements of the plan on the floor, including the change in how the state funds the Virginia Retirement System.

As for fee increases, the House version eliminates about $144 million's worth that Kaine proposed. In contrast, the Senate bill relies on $51 million a year in higher court fees.

The House bill takes several actions that would affect the Richmond area.

Among them: closing a Virginia Cooperative Extension office in Richmond, denying residents farm and gardening advice. Also, proposed public-defender offices in Chesterfield and Henrico counties would not be funded.

The House also recommends phasing out the Virginia Commission on the Arts by 2012.

Under the Senate bill, the state's fractious relationship with computer contractor Northrop Grumman would be monitored closely through the assembly's watchdog agency. Also, contract revisions that could drive up annual payments to Northrop Grumman would have to be vetted by the House and Senate money committees.