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McDonnell makes final budget pitch

The Associated Press

RICHMOND -- Virginia Gov. Bob McDonnell proposed millions in new spending for mental health, education and other priorities Monday in a two-year, $95.9 billion state budget.

The spending blueprint McDonnell outlined in a speech to the General Assembly's two money committees is nearly $10 billion larger than the biennial budget that expires July 1, 2014. Most of the increase is attributed to projected general fund revenue growth of 4.2 percent in the next fiscal year and 3.9 percent the year after. Just over $3 billion stems from an accounting change related to interagency payments not previously reported in the budget.

McDonnell's proposed budget -- his last before leaving office in January -- includes no tax or fee increases.

The Republican governor leaves an unappropriated balance of nearly $51 million -- cash the 140 legislators will surely attempt to target for pet projects after the General Assembly convenes its 60-day session Jan. 8. That's the most wiggle room in the state budget since 1991, according to the administration.

The budget also earmarks $303 million for the state's so-called "rainy day" fund, bringing Virginia government's savings account to more than $1 billion for the first time since fiscal year 2008.

The plan provides performance-based bonuses of 2 percent or 3 percent for state employees, provided their agencies meet financial goals, and a 2 percent increase for a limited number of employees in high-turnover public safety or health jobs, as well as some general district court clerks. There is no new money for teacher salaries a year after lawmakers approved the state share of a 2 percent raise.

McDonnell had already announced many of his spending proposals before Monday, including $38 million in new funding for mental health initiatives. The issue is expected to receive heightened attention following the November death of a state senator's son, who attacked his father and killed himself hours after being released from emergency custody. Sen. Creigh Deeds, D-Bath, survived the stabbing.

The governor also previously announced millions in additional spending for public schools and colleges, public safety, water quality, foster care services, prisoner re-entry programs and a proposed Slavery and Freedom Heritage Site in Richmond.

Transportation moved down the priority list after the General Assembly last year approved the first major overhaul of highway and transit funding in more than 25 years. However, the budget does include $6.5 million for planning to deepen the harbor in Norfolk and the channel of the Elizabeth River to accommodate larger ships that are expected to visit after the Panama Canal is expanded.

Medicaid continues to be a major growth item in the budget, increasing by $674 million in the two-year budget. That increase does not contemplate Medicaid expansion under the federal health care law -- a priority of Democratic Gov.-elect Terry McAuliffe that is opposed by the Republican majority in the House of Delegates.

The federal health care law is reducing the state's match for certain children's health care programs by $55 million, which helps bring the total increase in the health and human resources category down to about $630 million.

Legislators -- particularly members of the Senate Finance and House Appropriations committees -- and McAuliffe will have their own say on the spending plans before the General Assembly adjourns in March and again when it reconvenes for the one-day veto override session a few weeks later.

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