Virginia legislature approves $85 billion budget

Reuters News
Posted: Apr 18, 2012 6:53 PM
Virginia legislature approves $85 billion budget

(Reuters) - The Virginia state Senate approved an $85 billion biennial budget in a special session on Wednesday, sending the spending plan already passed by the House to the governor for review.

"I look forward to conducting an expedited comprehensive review of this final document in the weeks ahead, and making amendments as may be necessary," Virginia Governor Bob McDonnell said in a statement.

The state Senate had failed to pass the budget on Tuesday over disputes about funding an extension of the metro train system to Dulles International Airport. Virginia's budget year begins July 1 and clashes last month forced the legislature to convene a special session to pass a spending and tax plan.

"Budgets are generally a tapestry of compromises. No budget contains funding for every program that each legislator supports," said McDonnell.

"Unfortunately, some Senate Democrats spent the session seeking multiple excuses to vote against the budget," added McDonnell, who has been mentioned as a possible Republican vice presidential pick.

Budget battles are not new in Virginia - the legislature had to overcome impasses in 2001, 2004 and 2006.

Unlike many states, Virginia is quickly recovering from the 2007-09 recession, mostly due to its proximity to the nation's capital and the military installations along its coastline.

The state's total revenue collections rose 7.6 percent last month from March 2011, and were up 5.3 percent for the fiscal year-to-date, said Treasurer Richard Brown in a letter earlier this week. The commonwealth forecast collections to grow 4.6 percent this fiscal year, which ends June 30, from last year.

The two-year budget would reduce the unfunded liabilities for the state pension system by $9 billion by 2031, McDonnell said. The Virginia Retirement System is at risk of having a little more than 60 percent of the money needed to cover state and local retirement benefits. Throughout the recession, the state lowered its payments into the pension fund.

(Reporting By Lisa Lambert; Editing by Diane Craft)