Discretionary School Funds to Be Proposed

February 22, 2010

The House Appropriations Committee will propose $245 million in discretionary education funds to let local governments decide how to make painful budget cuts.

The House budget committee and Senate Finance Committee will meet tomorrow to adopt budget bills that the full legislature will consider next Thursday.

Del. M. Kirkland Cox, R-Colonial Heights, vice chairman of the Appropriations Committee, told House colleagues yesterday that, with the block grants, local school divisions could choose which programs to cut without interference from Richmond.

He noted that the money going into the block grants is reduced from the $314 million in discretionary education funding that then-Gov. Timothy M. Kaine proposed in the budget he introduced before he left office.

The two committees will work with $86 million in newly found money to pay Medicaid reimbursement costs. The National Conference of State Legislatures notified Virginia Thursday that the federal government will be pumping the Medicaid dollars to Richmond by spring — early enough to weave into the budget. Legislators anticipate that the money will reimburse health-care providers who participate in Medicaid, a program for the poor and aged.

Gov. Bob McDonnell has proposed $731 million in K-12 budget cuts in education, the largest state expenditure.

His proposals, announced Wednesday, have prompted cries of outrage from advocacy groups, but the chairman of the budget committee, Del. Lacey E. Putney, I-Bedford, said most will be adopted tomorrow.

Defending the proposed $2 billion in budget cuts on top of $2 billion in cuts proposed by Kaine, Cox said taxpayers are one advocacy group that hasn’t been heard from.

"They can’t hire rich lobbyists," he said. "They slug it out every day" to make ends meet, he added.

Senate budget writers, meanwhile, are poised to plow into public education more than a half-billion dollars drained from the public employee pension fund.

An estimated $508 million from lower contributions to the Virginia Retirement System would be used to ease reductions in state aid for K-12 education under a proposed budget to be released tomorrow by the Senate Finance Committee. The budget covers the fiscal 2010-2012 period, beginning July 1.

The Senate proposal, outlined by lawmakers and budget experts, is similar to one under consideration by the House Appropriations Committee and echoes a concept advanced by McDonnell.

Putney ind icated that the House version will not include 10 furlough days for most state employees, as McDonnell has proposed. That means the committee would have to find an additional $180 million to balance the budget.

Putney said one area being looked at is the dealer discount, the fee allowed retailers for collecting the state sales tax. Eliminating the discount would save the state $160 million over two years, but Putney indicated not all would be repealed.

Retailers say the fee merely compensates them for their collection efforts. Critics of the discount say computerized equipment makes the task of collection much easier.

Putney has proposed sweeping changes that would cut the state’s retirement benefits for employees hired after July 1.

The House is expected to go along with McDonnell’s request to restore retirement contributions the state makes for its employees. In his proposed budget, Kaine proposed that state employees begin contributing up to 2 percent from their take-home pay to their retirement packages.