Lynwood Lewis

On Sunday, Feb. 21, the House Appropriations Committee met to vote on its version of the budget. By the time you are reading this article, we will be on the verge of voting on passage of the House of Delegates version of the budget. Similarly, the Senate Finance Committee will be constructing its version of the state's budget which will also be voted on by the Senate on Thursday.

Each version of the budget will then be sent to the other body of the Legislature, which will impose as amendments its own version of the budget, and those amendments will then be rejected out of hand by the majority of the other body.

This process results in two conflicting budget bills which will then head to a committee of conference.

The Speaker of the House, Bill Howell, appoints the conferees for the House of Delegates, and the Chairman of the Senate Finance Committee appoints the Senate conferees.

The membership of the Conference Committees from either body is based on proportional party affiliation representation. The conferees begin to meet with budget staff from House Appropriations Committee and Senate Finance Committee to try and work out the details and agree upon a budget.

It is always an intense negotiation but in this environment even more so. Gov. Bob McDonnell's thoughts on the budget will most likely be represented in the House of Delegates version of the budget since his party is in control of the House.

As you all know from my prior reports and our town hall meetings, this train has been traveling down the track for some time given the extreme economic crisis in which our country finds itself. No matter what the final version, the budget will be austere.

We have been fortunate in Virginia, where our pro-business/ low tax environment, along with our proximity to the growth in the Washington, D.C. suburbs and the military presence in Hampton Roads and a strong port, have led to robust economic growth while maintaining a relatively low tax burden.

The recent shock to the economic system of our country was more than our strong state economy could overcome. Therefore, we have experienced an unparalleled shrinkage in the Virginia economy and in state revenues.

Specific items of contention between the House and Senate are likely to be the continuation of the car tax relief program which was capped a couple of years ago at a cost of $950 million.

In addition, the size and scope of the cuts promoted by Governor McDonnell and likely reflected in the House budget to K-12 public education, some $730 million, are also likely to be a topic of intense discussion. Health care, in particular Medicaid and our Community Services Boards, have suggested cuts of $300 million.

Virginia is 48th in the country in its level of Medicaid reimbursements and has one of the strictest Medicaid qualification requirements in the country. Deeper cuts in the area of public safety are being avoided by an extensive increase in filing fees for lawsuits in District Court and Circuit Court.

Our state's employee retirement system will be under review. One bright spot is the relatively modest reductions in higher education, which includes our community colleges, simply because they have borne the brunt of prior cuts. I further anticipate the suggestion of a series of significant fee increases which some maintain represents a "nickel and dime" means of raising revenue from our citizens.

There are no easy answers and each choice in this budgetary environment is a difficult one. We also need to remember the difference between government spending and investment.

A good deal of what government does is invest so that, as in the private sector, we can reap the benefits of that investment and build for our future, particularly in the area of education. That is why Virginia has heretofore had such a robust economy, a nationally recognized system of public education, and a relatively low tax burden.

We must vote on the final budget by the time we adjourn finally at noon on Saturday, March 13.

As we have all learned in recent years, it will be possible to extend the session or return for a special session.