
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, November 18, 1994                   TAG: 9411180111
SECTION: VIRGINIA                    PAGE: B-3   EDITION: METRO 
SOURCE: Associated Press
DATELINE: RICHMOND                                LENGTH: Short

STATE MAY FACE BIG BUDGET GAP

The state may face a $350 million budget gap next year, largely because lawmakers gave a tax settlement to federal retirees and increased prison spending this year, legislators were told Thursday.

Another reason for the potential shortfall is that a new state effort to collect delinquent taxes is bringing in about $121 million less than expected, Finance Secretary Paul Timmreck told the Senate Finance Committee.

Committee Chairman Hunter Andrews, D-Hampton, estimated the gap could be about $350 million if revenues don't improve before the General Assembly meets in January. The state's budget for 1994-96 is $32 billion.

In July, the Democratic-controlled assembly approved a $340 million settlement with federal retirees who had been taxed illegally. The state must make an initial $60 million payment next March.

In September, the lawmakers ended parole and lengthened sentences for violent offenders. Increased prison costs for that plan will be about $130 million next year.

by CNB