The Virginia Senate and House of Delegates unveiled their competing budgets proposals yesterday. Each year the Senate Finance committee and House Appropriations committee are charged with crafting or, in odd-numbered years, amending, the biennial state budget.  This year is one of the most dire of those that the body's most senior legislators can recall, with a $4 billion budget shortfall in the wake of an economic collapse and a sharp decline in state tax collections since 2007. Early in his term, Governor McDonnell vowed to veto any tax increases, leaving legislators to rely heavily on deep spending cuts.

In a nutshell, few of the cuts are surprising although the different budgets characterize the stark differences in governing philosophies. Both budgets cut deeply into education, health care and public safety.  The brunt of the House version falls on health care for the needy, elderly and children.  Both versions reduced payments to Virginia's pension plans, and the Senate version would require 3-day furloughs for state employees. Under the House budget, school class sizes would increase by one student.  Unlike the House, the Senate raised various fees to offset the harsh reductions.  Both chambers voted to restore the $950 million funding for the car tax reimbursement, which outgoing Governor Tim Kaine had used to offset further budget cuts. The House reduced  funding for health and human resources less dramatically than the Senate.

The final budget, whatever it may be, is likely to hit homeowners hard. Governor McDonnell is adamant about no tax increases, citing that this is the wrong time to raise taxes given that Virginians are already struggling. However, much of localities' revenue losses will have to be made up by increasing taxes at the local level - primarily the real estate tax - to mitigate the damaging reductions. Homeowners should be aware that what's happening at the state level has major ramifications on local services and how those are funded.

Read more about specific budget cuts:

Washington Post

Richmond Times-Dispatch

Virginian-Pilot

Daily Press

TriCities.com