Accelify Blog

Virginia Assembly Approves Pared-Back Spending Plan

March 16, 2010

Virginia lawmakers bridged vast divisions Sunday to pass a pared-down $70 billion budget and two-year spending plan that dials back state funding for education, health care and employee pensions while raising about $100 million in fees.

Lawmakers had feuded for weeks about how to close a shortfall through mid-2012 of more than $4 billion. A small team of negotiators from the GOP-led House and Democrat-majority Senate dragged the session into a single day of overtime before emerging with a compromise early Sunday morning.

Their budget builds on an original document from former Gov. Tim Kaine, who in December proposed $2.3 billion in reductions.

The General Assembly agreed to cut an additional $250 million from K-12 education, $360 million from health care and $120 million from local aid, while underfunding the Virginia Retirement System by $620 million with the plan of making up the contributions over the next dozen years.

"There’s no way to sugarcoat the fact that when you have a $250 million cut in K-12 and $300-plus million cut in health and human resources, that there’s going to be a real impact on some Virginians ," Gov. Bob McDonnell said in a news conference. "… There’s no way to say this budget will not cause some pain to our citizens."

Lawmakers decided not to furlough employees, which had been favored by the Senate and McDonnell. The House, which wanted no fee increases, and the Senate, which had pushed for $330 million more in fees, agreed to increase the charges for court visits and several other services.

Those increases met with protest from anti-tax forces in the House. By embedding the fees in the budget, said Del. Bob Marshall, R-Manassas, lawmakers were "ducking a separate vote" on the items.

The health care cuts target both program eligibility and reimbursements to hospitals, nursing homes and other providers, although those reductions would be restored with an expected $370 million in extended federal Medicaid dollars.

The compromise bill passed on a 73-23 vote in the House and a 34- 6 vote in the Senate.