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Stimulus bill sends Virginia

RICHMOND, Va. (AP) — Virginia’s cash-strapped budget will get about $1 billion from the federal stimulus package, or about $200 million more than it lost in its latest plunge in state revenue, Gov. Timothy M. Kaine said Monday.
Kaine said a disastrous January downturn in state revenues the past three months added $821 million to the snowballing state budget shortfall. General state tax collections dipped by 15 percent in January, creating the deepest drop in year-to-date revenues on records that date to 1960.
But the stimulus package Congress passed Friday and that President Barack Obama is expected to sign Tuesday pumps about $1.02 billion into state government through June 2010, Kaine announced.
A little more than $800 million underwrites the growing rolls of Medicaid recipients; about $216 million will be largely discretionary in the state budget.
"With this revenue adjustment — the downward adjustment (and) the upward adjustment — I believe they have what they need to go ahead and do the budget by Feb. 28," the General Assembly’s scheduled adjournment date, Kaine said.
That’s in addition to about $3 billion that will flow directly to Virginia residents and local governments outside the state budget into late 2010.
Over the remainder of the state’s current budget, it will infuse about $1.2 billion into public schools, according to a House Appropriations Committee breakdown of the package. It provides $100 million in grants to help low-income households weatherize their homes, and tax credits for college costs, for first-time home buyers and for new car purchases.
"The tax cut portion of this is massive," Kaine said. "For families making less than $150,000 a year, it’s significant tax relief."
Kaine cautioned against assuming the anticipated $200 million cushion the stimulus package affords will last.
The reasons, he said, are enormous growth in enrollment in Medicaid that should consume all of the additional federal cash infusion, and the likelihood that the poor economy will force him to lower the official revenue forecast again.
Lawmakers over the next few weeks have to compensate for a shortfall still between $2.7 billion and $2.9 billion using the federal cash, cuts to state jobs, agencies and programs, the state’s "rainy day" revenue reserve and other savings measures as they finish work on the budget.
The stimulus windfall won’t reverse job and agency cuts already made. It will mandate some changes for the state to be able to receive some of the cash.
—Virginia must restore cuts Kaine proposed in December to the state’s already stingy Medicaid program for the elderly and disabled. Tighter eligibility standards and the elimination 200 waivers that allow families to put mentally retarded members in community-based care near home instead of institutions are being reversed.
—Reductions to public school must be undone as a condition of receiving federal education money.
—Because nearly $700 million in highway funding Virginia will get from the package requires a list of projects that can commence immediately, the Commonwealth Transportation Board scrambled Friday to define a roster of ready road projects.

Questions also remained Monday about ways federal money will flow directly to local governments and school districts. Administrative regulations directing many of those allocations are still being written, said Kaine and lawmakers who spent the weekend analyzing the newly passed stimulus bill.

Republicans who dominate the House Appropriations Committee didn’t conceal their heartburn at the wholly Democratic rescue package. There’s too much spending while only about 15 percent of Virginia’s take goes to infrastructure investment, they complained.

"Other than the 15 percent, is there really anything in here that’s going to help boost Virginia’s economy from the standpoint of jobs for people who’ve been laid off," Del. Steven Landes, R-Augusta, inquired sourly.

Lawmakers also worried about what happens after the federal stimulus package benefits run out in two years, particularly support for Medicaid, which has grown rapidly.

Kaine and legislative budget leaders agreed to limit the amount of money plowed into new spending programs that the state will have to sustain by itself after the federal largesse disappears in 2011.

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Stimulus bill sends Virginia

RICHMOND, Va. (AP) — Virginia’s cash-strapped budget will get about $1 billion from the federal stimulus package, or about $200 million more than it lost in its latest plunge in state revenue, Gov. Timothy M. Kaine said Monday.
Kaine said a disastrous January downturn in state revenues the past three months added $821 million to the snowballing state budget shortfall. General state tax collections dipped by 15 percent in January, creating the deepest drop in year-to-date revenues on records that date to 1960.
But the stimulus package Congress passed Friday and that President Barack Obama is expected to sign Tuesday pumps about $1.02 billion into state government through June 2010, Kaine announced.
A little more than $800 million underwrites the growing rolls of Medicaid recipients; about $216 million will be largely discretionary in the state budget.
"With this revenue adjustment — the downward adjustment (and) the upward adjustment — I believe they have what they need to go ahead and do the budget by Feb. 28," the General Assembly’s scheduled adjournment date, Kaine said.
That’s in addition to about $3 billion that will flow directly to Virginia residents and local governments outside the state budget into late 2010.
Over the remainder of the state’s current budget, it will infuse about $1.2 billion into public schools, according to a House Appropriations Committee breakdown of the package. It provides $100 million in grants to help low-income households weatherize their homes, and tax credits for college costs, for first-time home buyers and for new car purchases.
"The tax cut portion of this is massive," Kaine said. "For families making less than $150,000 a year, it’s significant tax relief."
Kaine cautioned against assuming the anticipated $200 million cushion the stimulus package affords will last.
The reasons, he said, are enormous growth in enrollment in Medicaid that should consume all of the additional federal cash infusion, and the likelihood that the poor economy will force him to lower the official revenue forecast again.
Lawmakers over the next few weeks have to compensate for a shortfall still between $2.7 billion and $2.9 billion using the federal cash, cuts to state jobs, agencies and programs, the state’s "rainy day" revenue reserve and other savings measures as they finish work on the budget.
The stimulus windfall won’t reverse job and agency cuts already made. It will mandate some changes for the state to be able to receive some of the cash.
—Virginia must restore cuts Kaine proposed in December to the state’s already stingy Medicaid program for the elderly and disabled. Tighter eligibility standards and the elimination 200 waivers that allow families to put mentally retarded members in community-based care near home instead of institutions are being reversed.
—Reductions to public school must be undone as a condition of receiving federal education money.
—Because nearly $700 million in highway funding Virginia will get from the package requires a list of projects that can commence immediately, the Commonwealth Transportation Board scrambled Friday to define a roster of ready road projects.

Questions also remained Monday about ways federal money will flow directly to local governments and school districts. Administrative regulations directing many of those allocations are still being written, said Kaine and lawmakers who spent the weekend analyzing the newly passed stimulus bill.

Republicans who dominate the House Appropriations Committee didn’t conceal their heartburn at the wholly Democratic rescue package. There’s too much spending while only about 15 percent of Virginia’s take goes to infrastructure investment, they complained.

"Other than the 15 percent, is there really anything in here that’s going to help boost Virginia’s economy from the standpoint of jobs for people who’ve been laid off," Del. Steven Landes, R-Augusta, inquired sourly.

Lawmakers also worried about what happens after the federal stimulus package benefits run out in two years, particularly support for Medicaid, which has grown rapidly.

Kaine and legislative budget leaders agreed to limit the amount of money plowed into new spending programs that the state will have to sustain by itself after the federal largesse disappears in 2011.

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