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By MARY K. BLEWITT
Arundel Newapapen State W riter
A tax increase or spending cuts are expected for the new year as state legislators predict a tight-fisted 1990-92 biennium.
Delegates and senators from around the state have acknowledged that there may be a deficit for fiscal year 1988-90 and that monies for the 1990-92 biennium are likely to be limited.
“We have already geen the first of a series of clues,” said Sen. Dudley J: “Buzz” Emick Jr., D-22nd Dist., a senior member of the Senate Finance Committee.
Emick was referring to Gov. Gerald L. Baliles’ announcement last month that a reduction in general fund revenue for the current fiscal year ending June 30, 1990 was possible. As a precaution, Gov. Baliles delayed certain state construction projects and requested that state agencies save one percent of their current budget.
“Every indication that we can get from [State Secretary of Finance] Stuart W. Connock says that revenues are not living up to expectation,” said Del. V. Earl Dickinson, D-56th Dist., a senior member of the House Appropriations Committee.
“In previous year, there has always been enough to go around. This year there are concerns about not having enough,” said Del. William J. Howell, D-53rd District, whose district represents portions of Fauquier and Stafford Counties and Fredericksburg. “The opportunities are not quite as great as far as everybody getting everything they ask for,” Howell recently told the Fauquier County Board of Supervisors.
The state may be nearly $140 million short for the rest of the 1988-90 budget, estimated Emick, and $750 million to $850 million short for the next biennium. The budget for the 1990-92 biennium will be around $24 billion, according to Howell.
While some legislators are kicking themselves, others are saying “I told you so” as last year’s General Assembly reflects on the 1989 session when nearly all of the $508 million surplus was spent.
“The mistake has been spending too much on every project that’s come along in the past,” said Howell.
The Davis v. Michigan U.S. Supreme Court decision, which declared last March that the states must tax federal, state and local retirees equally, all but drained a $70.7 million revenue reserve fund set up by the 1989 General Assembly. A compromise der cision of the 1989 Special Session extended tax breaks to some public and private pensioners for the first time at a cost to the state of $69 million.
Still lingering over the state is the question of retroactivity. Should the courts rule that the state must refund taxes paid by federal retirees over the past three year, the cost to the Commonwealth would
95.9%