Last Thursday, the Virginia House of Delegates and Senate adopted their amendments to the 2006-2008 biennial budget. As is customary, each house will reject the amendments of the opposite chamber and send the amendments into a conference committee for development of a conference report.

As was the case during the 2006 legislative session and the special session in September, long-term funding for transportation dominated budget discussions as the House and Senate continue to disagree on the how to finance transportation improvements. The Senate failed to adopt transportation legislation; consequently, their budget reflected the Governor’s budget recommendations for transportation, including a modest amount of state General Fund resources.

General Funds are typically reserved for the state’s core services such as education, health care, and public safety. On the other hand, the House’s budget amendments provided additional funds for transportation through the use of new fees and $250 million annually in state General Funds, as well as a proposal for $2 billion of General Fund-financed revenue bonds, and one-half of any excess General Fund revenues in the future.

Higher education funding in the Senate’s budget amendments remained essentially unchanged from the Governor’s proposed amendments announced in December. However, the House created a reserve account which includes a tuition moderation fund to encourage institutions to hold down tuition increases while providing funding for enrollment growth during the 2006-07 academic year. The funds in the reserve account only become available if the Governor certifies the revenue projections for 2006-2007 in October.

The House budget amendments also included an additional 1 percent pay increase for all state employees and faculty above the 3 percent approved during last year’s session; the faculty salary increase is again dependent on the General Fund meeting its projections.

Cooperative Extension and the Agriculture Experiment Station received additional resources in both House and Senate budgets for the Commonwealth Staffing Initiative, which will provide funds for local agent and specialist positions statewide. Both budgets also retained capital funding provided in the Governor’s budget amendments for the hazardous waste facility and project supplements for the Building Construction Lab and Cowgill HVAC.

Transportation funding issues must now be addressed before other areas of the budget can be resolved. The Senate Finance Committee reported a substitute bill and the full Senate will take action on the House transportation plan in the next few days. While the transportation discussions continue, budget conferees will be announced soon to begin negotiations on the other areas of the budget.

A conference report is due on Tuesday, Feb. 20 and the session is scheduled to adjourn on Saturday, Feb. 24, assuming that transportation funding can be resolved and a conference report approved by the General Assembly.


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