Legislators begin working to slash billions from budget

RICHMOND

The most unpleasant work of the General Assembly begins in earnest today, cutting programs to balance a growing state budget hole of at least $2.9 billion.

Deep slashes in education, health care and public safety will probably be recommended this afternoon when House and Senate budget writers meet separately to reveal their competing proposals for state spending over the next 2-1/2 years.

Lawmakers will be moving forward without vital pieces of financial information that will determine the true amount of budget cuts needed.

An updated report on the state's revenues may not be available until next week. The data are expected to show the budget hole has grown - perhaps to $3.5 billion - largely because of tumbling tax receipts from stock market profits.

The other missing piece is exactly how much money Virginia can expect from the federal stimulus plan being debated in Congress. Assuming Congress passes a bill this week, state budget writers are hoping to have definitive numbers later this month.

The General Assembly is scheduled to balance Virginia's two-year, $77 billion budget and adjourn by Feb. 28. Senior senators say they can't recall a more difficult financial challenge.

"This is my 34th year, and this is by far the toughest one I've seen," said Sen. Charles Colgan, D-Prince William County, chairman of the Senate Finance Committee. "This really, really is just a tiger to ride."

Virginia is among 40 states this winter facing budget gaps, according to the National Conference of State Legislatures. Unlike the federal government, Virginia is constitutionally required to balance spending with revenues.

Colgan wants the General Assembly to delay budget decisions until April, when a clearer picture of the state finances is available and lawmakers can be certain how much spending needs to be cut. House budget writers, however, are insistent the work can be completed this month.

Gov. Timothy M. Kaine is urging lawmakers to move with an assumption that the $2.9 billion shortfall he forecast in December will remain accurate. Any deepening of the budget gap will be offset by federal stimulus money coming into Virginia, Kaine said.

"My sense right now is that the federal stimulus package will put more money into the general fund than any downward adjustment," Kaine told local government officials last week.

In December, the governor urged reductions to virtually every state service. He proposed:

• Cutting $590 million from public education, largely by reducing support personnel at schools such as nurses, clerical workers and curriculum specialists.
• Cutting funding to four-year colleges by 15 percent, and to two-year colleges by 10 percent.
• Cutting $62 million in aid to state and local police and commonwealth's attorneys' offices.
• Releasing some nonviolent inmates 90 days early to create prison space.
• Cutting $418 million from Medicaid, in part by capping admissions to community-based nursing homes and homes for the mentally impaired.

But the House and Senate have defeated a key part of Kaine's budget proposal - to double the state's cigarette tax to 60 cents a pack to raise about $150 million annually. The governor wanted to use the revenue to offset some of Medicaid reductions that he has urged.

Lawmakers complained that the tax would pose a disproportionate burden on low-income people. Many legislators also were unwilling to offend Philip Morris USA, the nation's largest cigarette producer, and its corporate parent, Altria. Both are based in Richmond.

The House Appropriations and Senate Finance committees will hold separate meetings this afternoon to put forth their competing budget plans. The full House and Senate are slated to vote on their respective plans Thursday. Budget negotiators - six from the House and five from the Senate - will then begin meeting to work out differences.

House leaders say any adjustments to the budget required by last-minute revenue changes can be handled by the negotiators.

"I think we're very competent to handle it," said Del. Phillip Hamilton, R-Newport News, one of the House budget mediators.

Staff writer Julian Walker contributed to this story.

Warren Fiske, (804) 697-1565, warren.fiske@pilotonline.com