GOP plan emerges to fix Va. shortfall

House of Delegates budget negotiators hope to overcome a multibillion-dollar budget shortfall in part by deeper cuts at state agencies, bigger contributions from state workers to their pension plans and more federal money to pay for Medicaid.

Each of those items are landmarks on a "road map" the Republican-controlled House is using to produce a budget by Feb. 21, the day both chambers are scheduled to release their spending plans.

The House spending plan, and the Senate's counterpart, have to compensate for a $4.2 billion shortfall. Former Gov. Timothy M. Kaine's outgoing budget contains more than half of those cuts, but legislators still need to find another $1.9 billion. Kaine proposed finding the money by eliminating the state's car tax relief subsidy to localities, but Republicans have dismissed that idea.

Senate Democrats continued Monday to tee off on Gov. Bob McDonnell for what they characterized as his delay in releasing budget amendments illustrating where he wants to cut.

And McDonnell announced that he plans to continue a school funding formula that will give Northern Virginia schools $128 million more in state aid but cost South Hampton Roads localities.

The House budget plan is based in part on a bill from Del. Lacey Putney, chairman of the House Appropriations Committee. It would require new government workers to contribute more toward their pension benefits, roll back cost-of-living adjustments and alter how a worker's age and years of service count toward retirement.

While it's envisioned as more of a long-range strategy,

one estimate suggests it could free up as much as $200 million to $300 million in the near term.

Officials also are anticipating approval of billions more in federal dollars to help states cover a share of Medicaid dollars until 2011. Those funds are part of the budget proposal President Barack Obama unveiled recently. That will free up state dollars that otherwise might have been used on health care costs.

Also being considered are proposals crafted by state department heads at the instruction of Kaine to show how agencies would function with graduated funding cuts up to 15 percent.

Deep cuts to education, public safety and health care were part of the Kaine

plan. And tough choices about deeper cuts are on the horizon.

"We haven't had it as bad as we have it with a hole this big in the budget from one governor to the next," said Appropriations Committee staff director Robert Vaughn, who nevertheless said the House is far enough along that it could produce a balanced budget by the end of this week if it had to.

A plan to offset the $1.9 billion with hundreds of millions in cuts to education and health and human services leaked from the Senate last week. But Senate officials said that is only one "scenario" that might not reflect their final proposal.

In that chamber Monday, Sen. Janet Howell said McDonnell's opposition to new revenues and his insistence that car tax relief continue "has boxed us in so that the only choice is cutting vital state services."

"The people of Virginia deserve to know how he will live up to his election promises," added Howell, a Fairfax County Democrat. "They deserve to know which state programs he wants us to cut. It is time, it is past time, for the governor to do the job he asked voters to elect him to do."

That rhetoric, Putney said, is motivated by Democrats' concerns that McDonnell hasn't presented his budget ideas "for them to throw rocks at and complain about on the floor."

"The way the governor is going about this deliberately and slowly working with both sides, both houses, I think it makes sense to approach the budget and the shortfall in that fashion," added Putney, a Bedford County independent who caucuses with the GOP.

McDonnell has rolled out some budget proposals in methodical fashion, but most have been new spending initiatives to fund his economic growth agenda.

Monday, he proposed another $29 million in spending to continue a state education funding formula that determines what share state and local government pay based on a wealth calculation. Last fall, school officials estimated that the formula would cost Virginia Beach

$15.5 million, Chesapeake $9.5 million, Norfolk $7.2 million and Suffolk and Portsmouth $4 million each.

Earlier in the day, Hampton Democratic Sen. Mamie Locke and education advocates lobbied for passage of legislation that would pump money into education with a menu of new levies, including collections of certain corporate, estate and income taxes. McDonnell has said he will not support any tax increases.

Julian Walker, (804) 697-1564, julian.walker@pilotonline.com