Budget Stalemate

It looks like the budget stalemate may be finally coming to a holt. On Friday evening the Budget Conferees came to an agreement on the budget.

The Senate is scheduled to vote on the proposed budget toady and the House will vote on the budget tomorrow. If all goes well it will be sent to the Governor and he will have about a week to look it over and send back to the House and Senate for final adoption.

I have included an article from the Associated Press on the agreement below.

House, Senate conferees agree on budget draft

By BOB LEWIS
AP Political Writer
June 16 2006

RICHMOND, Va. -- State legislators reached a tentative agreement Friday on a new state budget, ending an unprecedented stalemate just two weeks ahead of what would have been a fiscal and constitutional crisis.

The compromise, 96 days late, sets up a frantic scramble to push the $72 billion, two-year spending plan through the full House and Senate, gubernatorial review and legislative reconsideration of vetoes and amendments by June 30.

After weeks of dickering and bickering, false starts and abrupt halts, the deal fell into place after rival House and Senate negotiators agreed to continue new transportation funding later this year.

The agreement no longer has approval of new, permanent taxes, fees or both for road, rail and transit projects as a condition for the allocation of
$339 million in general funds for transportation projects next year.

The proposal now goes before the full Senate for approval on Monday and before the House on Tuesday. Gov. Timothy M. Kaine will have up to seven days to amend or veto line items in the budget.

Looking haggard but relieved, the six House members and five senators announced their agreement at 6:45 p.m.

"We're tired but happy," Sen. John H. Chichester said.

"Once it's all put together and everyone reflects on it, it's a very fine document, one of the best I think we've seen for a long time," said Chichester, R-Stafford.
House Appropriations chairman Vincent F. Callahan Jr. said relations between the House and Senate after their protracted five-month debate were "cordial."

"We respect each other. We fight like cats and dogs sometimes, but we do that internally also," said Callahan, R-Fairax.

The accord ended a clash over efforts by the Senate and Kaine to boost transportation taxes by about $1 billion annually and the unbending resolve against any new taxes by the House's majority Republicans.

"This is what this was all about, who are we kidding," said Del. M.
Kirkland Cox, R-Colonial Heights. "I think this forever discredits the practice of trying to put tax increases in the budget."

House GOP leaders insisted that imbedding taxes into an appropriations bill is unconstitutional. Tax bills have to be separate measures, they argued.
Transportation was the marquee legislative issue of 2006. Kaine successfully campaigned on it in the governor's race last year and held two dozen town hall-style forums across the state to whip up support for it.

Kaine was relieved to see a budget in place, but is not conceding the unlikely possibility of increased fees or taxes for transportation when lawmakers take up the issue, said press secretary Kevin Hall.

"No one is claiming the discussion is over," Hall said. "House leaders have said in recent weeks they wanted to take care of the two-year budget and return to transportation and we take them at their word."

Other key agreements in the new budget include:

-- Fully repealing the estate tax--a posthumous levy on the estates of millionaires--at a cost of $35 million over the next two years, but at an estimated annual revenue reduction approaching $130 million after that.

-- Pay increases of 4 percent over the coming year for all state employees, state-supported local employees and public school teachers; the following year, state workers and state-subsidized local workers would get 3 percent raises with 1.5 percent boosts reserved for teachers.

-- $25 million over two years to help preserve the Oceana Naval Air Station in Virginia Beach, targeted for closure by the federal Base Realignment and Closure Commission, as a military base.

-- $200 million for Chesapeake Bay cleanup; $17 million to clean up Virginia rivers outside the Chesapeake Bay Watershed; $55 million for the Water Quality Improvement Fund.

This year's impasse marks the third time in five years that the General Assembly, which once prided itself on budgetary punctuality, has failed to finish work on a budget during their regular winter session.

Callahan said this year's delay, the longest ever, does not set a precedent for 11th-hour budgeting and fiscal brinksmanship.

"I think this was an aberration, very frankly," he said. "It's something out of the normal that I don't think we'll be seeing in the next couple of years."