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State budget talks to focus on stimulus
State budget negotiations to begin tonight

Date published: 2/22/2009

BY CHELYEN DAVIS

RICHMOND--

Legislative budget writers will meet tonight to start hammering out a compromise on a two-year state budget that's $3 billion short.

The big issue that the six senators and six delegates who make up the budget conference committee must reconcile is the federal stimulus money.

Lawmakers don't expect to have to make further budget cuts, but they do have to agree on how to spend that stimulus money.

The House of Delegates wrote its budget before the stimulus money was announced, and before the state's latest revenue figures were in. The final state numbers add another $800 million to the budget shortfall, but the stimulus money so far is a little over $1 billion.

The Senate decided to wait a week to pass its own version of the budget, and did so last week. It incorporates the stimulus money, reversing proposed cuts to education, public safety and Medicaid.

But the House negotiators aren't sure they like the way the Senate has allocated the federal dollars.

Del. Phil Hamilton, R-Newport News, said the delegates want to split about $1.2 billion in stimulus money over the two years in the budget, while their analysis of the Senate's budget suggests the Senate has put most of the money into the first year to offset cuts.

"It looks like they're front-loading a lot of the stimulus money to fiscal year 2010," Hamilton said. "You don't want to build your base budget on stimulus money."

The House wants to ensure that the federal dollars don't get used for long-term programs, since the money is not going to be there in future years.

And, Hamilton said, the House will push for a reserve fund of about $250 million to cushion future budgets, in the expectation that the economy is not going to rebound any time soon.

If the House and Senate negotiators can agree on a reserve fund and a splitting of the stimulus money over the two years, Hamilton said, most of the other items of contention in the budget will fall into line rather easily.

Sen. Edd Houck, D-Spotsylvania, a Senate budget negotiator, also said the stimulus money is the sticking point.


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