The Virginia legislature’s money committees passed tentative budget plans Sunday amid deep uncertainty about the depths of sinking tax revenue and the potential for federal stimulus cash.
Competing plans emerged from the House Appropriations Committee and Senate Finance Committee. Lawmakers, however, expect to overhaul both budgets once the commonwealth’s fiscal picture grows clearer.
Virginia faces a shortfall of at least $2.9 billion in its $77 billion, two-year budget. Legislators are preparing for that gap to worsen as the recession takes an increasing toll on state coffers.
“Every last one of us knows that we’re not going to meet those revenue projections,” said Sen. John Watkins, R-Midlothian.
Budget makers on Sunday sought to temper some of Gov. Tim Kaine’s deepest proposed cuts to education, health care and public safety while dealing with the consequences of a failed cigarette tax increase. Neither the House nor the Senate passed the 30-cent-per-pack tax increase, ripping another $150 million hole in the governor’s December spending plan.
Kaine’s proposed budget takes about $400 million from both K-12 education and health programs. GOP House appropriators want to restore funding to care for the mentally disabled that Kaine had removed. The House’s spending plan restores 200 slots, or “MR waivers,” for community-based care through Medicaid, and adds another 200.
Finance committee members in the Democratic-led Senate didn’t substantially change the amount of Kaine’s education cuts, but instead opted to make them temporary.
Neither plan passed on Sunday accounts for January tax data, which is expected to be dismal, or the potential cash from a massive federal stimulus bill now being debated in Congress. Senate Finance Committee Chairman Charles Colgan, D-Manassas, said the stimulus funds “will allow us to buy much-needed time,” but should not be used to avoid making tough decisions.
Lawmakers in both chambers are scheduled to take up their respective budget bill this week.
