Budget: Where U.Va. stands
Process a long and winding road

By Dan Heuchert

The news about the state budget seems ever-changing. One governor proposes a budget; the next one changes it. Then legislators rewrite the budget altogether. Numbers shift constantly. One day, you may be getting a raise. The next day, you’re not. Then it’s not a raise, but a bonus, or perhaps some time off. It can be frustratingly confusing.

“Laws are like sausages,” the late German Chancellor Otto von Bismark once said. “It is better not to see them being made.” With apologies to the squeamish, then, what follows is a primer on Virginia’s budget process, with an eye to salary matters as an example of how things change in the process.

Virginia operates on a two-year budget cycle. In even-numbered years, the General Assembly meets for a 60-day “long session” to consider a 24-month spending plan, to take effect July 1, the beginning of the state’s fiscal year. In odd years, the legislature generally meets for 45 days, and makes midstream adjustments to fit the more current financial picture. Lawmakers also may modify the expiring budget, if need be, with so-called “caboose bills” that take effect as soon as the governor signs them.

So budgeting, either writing a new one or amending an old one, is a nearly constant process. Each fall, the University submits its budget priorities — developed through an extensive internal process — to the state Office of Management and Budget. These include requests for both operating needs and capital (building) projects, the latter of which are enumerated in a six-year plan that is updated every other year.

The state budget office, working in concert with the governor, reviews the state’s revenue projections and puts together a budget proposal, which the governor usually unveils in December. At the close of 2001, outgoing Gov. Jim Gilmore did the honors.

Gilmore’s proposal, which included a 2 percent raise for state workers, was immediately panned as unrealistic for many reasons by legislative leaders and then-Gov.-elect Mark Warner, all of whom had their eyes trained on a mounting revenue shortfall, thanks in part to Virginia’s recession-swamped economy.

Still, Gilmore’s budget was introduced as the plan of record when the 2002 “long session” opened Jan. 9. It was referred to the legislature’s powerful “money committees,” the state Senate’s Committee on Finance and the House of Delegates’ Appropriations Committee. There, the sausage-making began in earnest.

Warner took office and submitted his own package of budget amendment proposals, which included a salary freeze for state workers, including faculty members.

Committee members submitted amendments of their own. Even as the committees worked on the budget, fresh revenue projections forecasted a growing deficit: $1.3 billion for the remainder of the current fiscal year, and $2.5 billion for the two-year cycle beginning July 1.

The capital budget process has gone fairly smoothly. Early in the session, both committees agreed to a $1.6 billion bond package to finance construction at the state’s colleges, universities and parks. Almost $1 billion of that would have to be approved by voters in a referendum, presently slated for November. U.Va.’s share would be $98.2 million, $68.3 million of which would go before the voters.

The money committees finally completed their work on the operating budget Feb. 17 and sent their versions to their respective full houses. The Senate considered its version for only two hours Feb. 21 before voting 34-6 to approve; the House debated into the night, voting on dozens of amendments before finally approving its version by an 81-15 vote.

The House bill provides for a 2.5 percent across-the-board salary increase in December 2003, as long as the revenue picture gets no worse. The Senate went a different route, scheduling one-time bonuses of 2.5 percent and 2.0 percent in the coming two fiscal years; alternately, classified employees could choose to receive two week’s of additional paid annual leave instead. In the Senate plan, institutions could be given discretion as to how they would dole out the bonuses to faculty members.

The houses were expected to formally reject each other’s budgets Wednesday, sending their competing versions to an eight-member conference committee, expected to be comprised of senators John Chichester (R-Fredericksburg), Charles Colgan (D-Manassas), Walter A. Stosch (R-Glen Allen) and William Wampler (R-Bristol), and delegates James H. Dillard II (R-Fairfax), A. Victor Thomas (D-Roanoke), Lacey E. Putney (I-Bedford) and Vincent F. Callahan Jr. (R-McLean). Their task is to come up with a compromise measure to be approved by each house in time for the assembly’s scheduled March 9 adjournment.

Warner will have 30 days to review the budget passed by the legislature. In Virginia, governors are empowered with a so-called “line-item veto,” which allows them to red-line certain elements of the budget without vetoing the whole bill.
The Assembly reconvenes April 17 to consider Warner’s vetoes. It takes a two-thirds vote of each chamber to overturn a gubernatorial veto.

The new budget will then take effect July 1 — just a few months before the University submits its proposed amendments for consideration by the governor and the 2003 General Assembly.