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Location: Strasburg, Virginia

Monday, December 19, 2005

Warner presents final state budget; A1

Governor stresses fiscal prudence, urges assembly to spend carefully

By Garren Shipley
(Daily Staff Writer)

RICHMOND — Virginia is in good fiscal shape, but the General Assembly would do well not to count on good times forever.
That was one of the key points in the final budget presented to the General Assembly by Democratic Gov. Mark R. Warner on Friday.

In a speech to the legislature’s money committees, Warner said his new $68.8 billion budget for the 2006-08 biennium was one that took advantage of current good times but was still financially prudent.

The budget contains no tax hikes or cuts. It relies on revenue growth to fund new spending.

Warner hit on themes of fiscal pragmatism, something he’s done throughout his tenure, and said that 52 of 96 state agencies are smaller than they were before he took office.

But that’s not what matters, he added.

“At the end of the day, people don’t care if a good idea has a ‘D’ or an ‘R’ attached to it,” he said. “And they care less than most people think about whether government is big or small. What they want is smart and efficient government.”

Holding the line on spending should be the order of the day, with the exception of some one-time expenditures like $200 million for sewage treatment plants along the Shenandoah, Potomac and James rivers, and some $150 million to match earmarks in this year’s federal transportation bill.

That bill will bring more drainage improvements to U.S. 11 in Maurertown. Warner’s budget also includes funding for the new armory in Winchester and expansion of the Northwest Regional Jail.

Warner appears to be making room for the new administration, said Del. Joe May, R-Leesburg, one of the few legislators from the area affected by Thursday’s ice storm to make it to Richmond on Friday morning.

“What was presented was what I would refer to as a plain vanilla set of budget amendments with no huge surprises in it,” he said.

That’s an “indication that the balance of the budget-making process will be done by the Senate and by the House,” he said. “I don’t think the governor made any attempt to have any earth-shattering initiatives.”

“He’s going out on a very gracious note,” May said.

Warner said his emphasis is on keeping the books balanced.

“In this budget, we will not make spending or tax policy commitments whose cost will show up or escalate in the out years,” Warner said.

“We will not start major new programs,” he said. “And, we will not casually assume that Virginia’s revenues will continue to show extraordinary growth for the next 2 1/2 years.”

The commonwealth is expected to post an $860 million surplus by the end of fiscal 2006.

Instead, Warner’s final budget is based on declining growth, dropping to 5.1 percent by fiscal 2008.

Warner’s fiscal swan song doesn’t include any significant funding for one of his successor’s top priorities — pre-kindergarten education.

Gov.-elect Tim Kaine announced his desire during the campaign to start a universal pre-K education program for the state, but said costs for the program would be so large that they would have to be phased in over time.

Friday’s budget as proposed sets aside some $8.6 million over the next two years for a proposed Virginia Early Childhood Foundation, which would seek matching private dollars to improve “early childhood services.”

For his part, Kaine said he supports the spending plan.

“This budget wisely invests in our core priorities and adheres to the principles of accountability and fiscal responsibility,” he says in a statement issued while Warner was speaking.

“Governor Warner’s good stewardship of Virginia’s economy has served the state’s best interests. As Governor, I will continue the commitment to the sound fiscal practices that have earned us our good standing,” the statement says.

The General Assembly convenes on Jan. 11.