Against "fiscal cliff" uncertainties, McDonnell proposes amendments to state budget RICHMOND - Balancing Virginia's current fiscal strength against uncertainty in Washington, Gov. Robert F. McDonnell is proposing state budget amendments that would give teachers raises, divert some general fund revenue for roads and sock away more than $100 million the state's rainy day fund. McDonnell (R) appeared before the General Assembly's Joint Money Committee on Monday to pitch a mix of spending increases and cuts from the two-year, $85 billion budget that the state has been operating under since July 1. McDonnell has a modest windfall to work with, with revenues over the 2013-14 biennium projected to come in nearly $220 million higher than originally forecast. But the governor nonetheless has fairly ambitious plans to reshape the state spending plan. Beyond suggesting how that projected surplus should be spent, McDonnell proposes $524 million in spending cuts. Pooling those cuts with the projected surplus, he would increase spending on his priorities by $736 million. McDonnell also proposes redirecting $48 million in general funds to transportation. Early this year, with the state's transportation fund projected to be out of money by 2017, McDonnell sought to increase the amount of sales tax revenue dedicated to transportation from 0.5 percent to 0.55 percent for 10 years. The General Assembly rejected the idea. Now he is proposing that for one year. It is part of McDonnell's larger plan, still under wraps, to generate $500 million a year in transportation funding. The governor also wants to save $12.2 million by eliminating "cost of competing" funds for school support staff in the second year of the budget. The funds are usually provided to Northern Virginia schools to help them attract staff in that expensive job market. During the budget process this year, McDonnell had wanted the funds included for teachers but not support staff. McDonnell would save $58.8 million through cuts to state agencies. Details on those proposed trims were not immediately disclosed, but they stemmed from McDonnell's request in November that agencies submit plans to shrink spending by 4 percent. McDonnell also proposes saving $7 million by closing a juvenile correction facility in Hanover and cutting $1.5 million from mental health facilities. One area of savings is painless: McDonnell reaped $30 million by restructuring some debt with more favorable interest rates. Some of McDonnell's spending proposals reflect his concern that the commonwealth, which rode out the recession with relative ease thanks to its concentration of military installations and defense contractors, could be in for tougher times. Virginia would be particularly hard hit if Congress and the White House fail to reach a budget deal by Jan. 1, triggering across-the-board defense and domestic spending cuts known as sequestration. McDonnell wants to plow $128 million into the state's rainy day fund. He also wants to provide nearly $70 million to shore up the state employee health insurance program. He would spend $58.8 million to provide teachers with a 2 percent raise and $15 million to offer merit pay to teachers. Both are part of an education reform package that would also make it easier to fire teachers. McDonnell proposes investing an extra $30 million in higher education. Staff writer Errin Haines contributed to this report.