Virginia House, Senate Strike Deal on 2-year, $85B Budget

April 5, 2012

Legislative negotiators reached a handshake deal Thursday on a new $85 billion budget that would keep state operations funded for the next two years.

It came after House and Senate talks nearly collapsed in a dispute over money to hold down sharp toll increases in northern Virginia.

Senate Democrats demanded more than double the $150 million that Republican Gov. Bob McDonnell approved for the Dulles project, but the administration said it was a budget-buster and House budget negotiators rejected it.

Senate Democratic Leader Richard Saslaw said that while the negotiators might approve a report without the Dulles toll abatement, it might not survive a Senate floor vote.

"Then we've got a problem — huge. You ain't got 21 votes in the Senate for a budget, period — not now, not next week, not next month, not June. That's the way it is," Saslaw told about a dozen lawmakers gathered with him around a conference table.

Then, looking at a grim-faced Transportation Secretary Sean Connaughton, Saslaw barked: "I suggest you go back and find the goddamn money or tell the governor he ain't going to have a budget."

Democrats control 20 of the Senate's 40 seats, and the state Constitution forbids Republican Lt. Gov. Bill Bolling from casting the tie-breaking vote with his party on appropriations bills.

Twice during the regular legislative session, budget bills died in the Senate's partisan crossfire when Democrats stood firm against it and withheld the necessary 21st vote. That forced the General Assembly to convene a special session to finish work on the budget for the third time in a dozen years.

With Republicans controlling two-thirds of the 100 House seats, passage there is no problem. Holding all 20 Democrats together against a budget and risking a meltdown that would leave state government unfunded starting July 1 is not as easy as Saslaw implies.

When Sen. Charles J. Colgan, D-Prince William, was asked whether he could vote against the budget without the Dulles toll abatement funding, he furrowed his brow and said, "Well, I don't know." He chuckled and added, "Can't tell you all my secrets."

The budget deal is silent on relief for planned tolls on two tunnels that connect Portsmouth and Norfolk beneath the Elizabeth River. An agreement between Senate Democrats and McDonnell would delay the Hampton Roads tunnel tolls until 2014.

Thursday's breakthrough, reached 21 days after the regular session adjourned, sets up a decisive floor vote on April 17, one day before a scheduled reconvened session to consider McDonnell's amendments and vetoes to bills.

The budget conference accord also comes as good news to the state's cities, counties and towns as they struggled to finalize their own budget plans, guessing at their state funding.

Local governments were stunned by legislation passed in the dying hours of the regular 2012 session on March 10 that could require staggering increases in local government contributions to the underfunded public employee pension fund. Increased local taxes on real estate and personal automobiles, cuts to local government services or a combination of both are under wide consideration because of the changes.

Details were unclear how the new agreement would affect localities' obligations to help the Virginia Retirement System cope with unfunded liabilities totaling $24 billion.

Other changes in the budget compromise:

— Funding for community-based care for Medicaid recipients with intellectual or developmental disabilities was increased by 22 percent. It provides funding for 225 additional slots for the intellectually disabled, an increase of 25, and 80 new slots for the developmentally disabled, up from 50 previously.

— State employees, college faculty and state-supported local employees get a one-time 3 percent pay bonus in December and a 2 percent permanent pay raise — their first since 2007 — in August 2013 provided state revenues are undiminished.

— Public education receives $215 million, with slightly more than half used as block grants localities can apply toward retirement costs, inflation adjustments and pre-kindergarten needs. It provides $40 million Democrats demanded to help northern Virginia school districts keep salaries of non-teaching staff competitive with those of rival out-of-state school systems.

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