Va. Senate Passes Stimulated Budget

House, Senate set up budget negotiations

RICHMOND, Va. -- A revised state budget that takes into account federal stimulus money passed the Virginia Senate Wednesday, but as it is widely different from the House version, a handful of lawmakers will try to negotiate a compromise.

The Senate passed its two-year, $77 billion version 36-4. It uses $216 million in stimulus money to plug holes in health care services, education and public safety funding that had been carved out by a $3 billion budget shortfall. Another $800 million will be used to reduce further cuts in education and public safety, but that money comes with restrictions not yet known.

The House voted 66-22 to stick with its version, which does not include stimulus money. The move expedites the beginning of negotiations, which will go on over the next week before the General Assembly adjourns Feb. 28.

The Senate budget restored funding for mental health facilities for the profoundly intellectually disabled and for children. It restored funding for support staff and textbooks in public education and for local police departments. It also used more than $60 million for building projects that would have been paid for by debt.

More federal money for Medicaid allowed senators to free up $1 billion for other uses without further cutting the medical service to the poor.

The Senate version left $46 million unappropriated in case the economy continues to crumble.

It retained a provision that would allow for the early release of nonviolent offenders, but reduced the number of eligible inmates by about 500. Gov. Timothy Kaine proposed in December releasing about 1,100 inmates 90 days early to save money.

The Senate chose last week to ignore a self-imposed deadline to finish work on its version of the budget so it could wait for two critical pieces of information: January revenue figures and how much Virginia would get from the nearly $800 billion stimulus package. The House passed its version, acknowledging it would need major revisions.

On Friday, Kaine announced that Virginia tax collections for January were down 15 percent, the worst year-to-date decrease in state revenues on record. It was the sixth consecutive monthly decline in general tax receipts, and it put the state 5.5 percent short of anticipated revenues used to construct the two-year budget last year.

Kaine lowered the official estimate of state revenues by $821 million on Monday, but by then Virginia lawmakers knew that would be offset by about $1 billion from the stimulus package Congress passed on Friday.

Another almost $3 billion outside of the state budget will flow directly to residents and local governments.

Sen. Edward Houck, D-Spotsylvania and vice chairman of the Senate Finance Committee, said waiting until they had all the information paid off because it settled contentious arguments over what funding reductions to make.

Sen. William Wampler, R-Bristol, agreed that lawmakers learn more everyday about how the stimulus package can help the state.

"We are every day continuing to work on minimizing the reductions that the governor put in his budget, and I think that's good for all of us," Wampler said.


Associated Press Writer Larry O'Dell contributed to this report.

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