Excerpts of Statement by The Honorable Vincent F. Callahan, Jr.

June 20, 2006 Mr. Speaker and Members of the House:

On behalf of my fellow conferees, I am pleased to deliver the much anticipated conference committee report to House Bill 5002. To say it took awhile would be an understatement. However, to say that the document before you today is one of the finest in my 38 years of serving in the House would belie the importance of what was at stake...

Article IV, Section 12 is quite clear in that “No law shall embrace more than one object….” A bill to appropriate revenues should not be a bill to raise revenues. Each serves a different purpose, underscored by the fact that in the House we have two different Committees, charged with the respective responsibilities.

The provisions of Article IV, Section 12 are important, if we violate that principle, we potentially subject the law to a court challenge. Equally important is our responsibility under Article X, Section 7, which states that “No money shall be paid out of the State treasury except in pursuance of appropriations made by law…”

The dilemma from my perspective was this: in order to preserve one Article of the Constitution -- not embedding tax increases in the budget -- we were confronted with the prospect of brushing up against another provision – the approval of an Appropriations Act by July 1.

In my view, these two provisions are not mutually exclusive. Fortunately Mr. Speaker, your House Conferees preserved both Articles of the Constitution.

Several weeks ago my friends from across the aisle suggested that if we were school kids we would have flunked for turning our assignment in late. Well, the same could be said that if we violated school policy we would be suspended. But, Mr. Speaker we are not school kids. We have been duly elected to do the people’s work. In doing so, we must comport to the Rules established by the people on November 3, 1970.

With regards to the specifics of the Conference Committee Report, as we started this Conference Committee the number of items in dispute were not great, however, there were several significant policy differences that we needed to resolve.

One of the major differences was the Transportation Reserve Fund. In general there was agreement that we should set aside funds for transportation that would be allocated upon conclusion of the adoption of a new biennial budget. Unfortunately, the House Conferees had two issues to wrestle with. First was the funding level and the second was the accompanying language. The House did not support the Senate’s position on either front. However, it became quite clear that the Senate would not budge from the amount of funding in the Reserve. The Senate was aided in this endeavor by the Governor who stated his willingness to sign a budget with only $568 million, an amount less than the $625 million he proposed in his budget. With regard to the language, the House Conferees prevailed on two fronts. First, the language requiring an undefined threshold of revenue that would need to be generated for transportation during a subsequent Session was removed. Likewise, language that would have redirected the Reserve Fund to other purposes was also removed. The final agreement of the Conferees appropriated these dollars in the Department of Transportation with language stipulating that the specific allocation of the funds will be determined through separate legislation not contingent on a tax increase.

There were other facets of the Conference agreement on which the House prevailed. For example, the House Conferees insisted that two years of salary increases be contained in the budget for all state and state supported employees.

In arguing our position, the Senate seemed insistent on leaving out school teachers from the second year pay raise. At one point, the Senate proposed funding the raise by reducing the amount of funding that already been agreed to for transportation. To pit transportation against a second year pay increase for public school teachers seemed a bit hypocritical.

All too often we have built our biennial budget providing a first year pay raise, leaving the second year unaddressed in the hope that revenues will grow sufficiently so that we can address pay raises during the odd-year Session. To leave an unfunded second year obligation in a two-year budget in our opinion was fiscally unsound.

In the end, the House Conferees prevailed and provided two years of pay raises for all employee groups.

In the area of Higher Education, the conferees recognized the need to provide additional resources to our colleges and universities to slow the growth in tuition and to meet our future enrollment growth, especially at our Community Colleges. The actions of the Conferees both in capital construction and operating support will ensure that we can meet our future demand.

In the area of Health and Human Resources, the conferees found much agreement in our desire to address the “safety net”. The conference budget provides funding for an additional 473 MR waivers for individuals currently on the critical community waiting list. In addition, funding for 65 new developmentally disabled (DD) slots for individuals age six and older with disabilities such as autism or cerebral palsy are provided.

Mr. Speaker, the conference committee report that is before you represents several compromises. But in the end the House Conferees did not compromise what was right.

As I reflect on this Conference Committee report, I am reminded of my dear friend and mentor Earl Dickinson who passed away last week. During our four years together as Co-Chairs I learned a lot from him. When I assumed the Chairmanship in 2002, I had the advantage of reflecting on the past practices of legislative budgeting in determining the course of action for the future. If there is a legacy to be had, my hope was that whatever we did, we did it right.

Mr. Speaker and Members of the House, I think this conference has produced a report that directs funds to established priorities that maintain and reaffirm our previous commitments to the citizens of the Commonwealth.

I thank all of the budget negotiators for their good work and good humor.

With that, Mr. Speaker and Members of the House, I ask that you accept the conference report on House Bill 5002.