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Virginia Lawmakers Pass Budget, Delay Action on $1.65B University R&D Bond

March 26, 2008

Adjourning from the 2008 legislative session on March 13, Virginia legislators passed the fiscal year 2008-10 biennial budget but immediately called for a special session to resolve differences in the proposed capital outlay plan that supports university R&D and commercialization efforts. 
Gov. Tim Kaine unveiled the bond package in December, which includes funding to upgrade university research buildings and laboratories and purchase new research equipment. The bond package also targets construction projects focused on developing a skilled workforce (see the Dec. 19, 2007 issue of the Digest). Lawmakers will reconvene April 23 to act on the bond package and to consider the governor’s amendments and vetoes to the state budget.
Faced with a projected budget shortfall of $339 million for the remaining fiscal year and more than $1 billion in FY09-10, Gov. Kaine announced last month a revised budget revenue proposal to his original recommendations unveiled late last year.
To address the shortfall, Gov. Kaine called for reductions across executive budget branch agencies, targeted cuts to many of his own proposals and withdrawing funds from the Revenue Stabilization Fund. Specifically, the plan trims $1.8 million over the biennium for the Virginia Community College System and $7.7 million from the Commonwealth Technology Research Fund for the biennium. The governor’s original proposal provided $10.5 million over the biennium for the fund.
An amendment in the conference report for the FY08-10 biennial budget splits the appropriation for the Governor’s Development Opportunity Fund between the two years of the biennium to help address cash flow needs in FY09. The biennial appropriation is unchanged and totals $15.1 million, $7.6 million of which would be available in the first year.
The conference report includes $17.4 million each fiscal year for the Virginia Economic Development Partnership – $100,000 above the governor’s recommendation. Another $50,000 in FY09 is included to support physical and programmatic activities of the Virginia Biotechnology Research Partnership Authority.
The Innovative Technology Authority - the governing body of the Center for Innovative Technology - is slated to receive $5.8 million each fiscal year with $500,000 over the biennium earmarked for the Virginia Electronic Commerce Technology Center. The conference report does not include the governor’s recommendation of $500,000 each year for a new initiative within the Department of Housing and Community Development to develop a higher education center and fund rural broadband.
Lawmakers reduced by $10 million the governor’s recommendation for the Education Research Initiative. Research grants under the initiative are intended to encourage university collaboration, benefit economically distressed regions and attract industry-sponsored R&D. Lawmakers approved $1.9 million in FY09 and $9.2 million in FY10 for the initiative.
HB 1312, a bill to transfer responsibility for the management of the state’s workforce development program to the Virginia Community College System, also was passed during the legislative session. The bill calls for developing a strategic plan for workforce development and training programs to coordinate with the state’s economic development strategic plan.
The conference report for the FY 2008-10 biennial budget is available at: http://leg2.state.va.us/MoneyWeb.NSF/Bud2008