By Tyler Whitley and Jeff E. Schapiro
Media General News Service

Senators are retreating somewhat on fattened court fees to help balance Virginia’s recession-wracked budget, but delegates aren’t impressed.

Ahead of the assembly’s scheduled Saturday adjournment, the 13 budget negotiators missed their first deadline to reach a deal—midnight tonight.

The latest maneuvering came as the McDonnell administration reported that the state’s tax collections continue to lag.

In a written proposal that the House rejected as inadequate late this afternoon, Senate negotiators proposed cutting from $51 million to $38 million the cash on which the state would rely annually from higher costs for Virginians filing civil lawsuits.

Delegates and senators also discussed the possibility of putting off for another year a possible one-time bonus for state employees who have gone without a raise for four years.

The House and Senate budgets call for a 3 percent payment to workers in December 2011, but it could be delayed until Christmas 2012 if the necessary revenues—$82 million—don’t materialize.

Because both sides are quarreling over how much money is available over the two-year spending cycle that begins July 1 as well as its origins, conferees have yet to make significant progress on a compromise remedy to the state’s $4.2 billion shortfall.

“Once we agree on revenues, everything else should fall into place,” said Del. M. Kirkland Cox, R-Colonial Heights, vice chairman of the House Appropriations Committee.

Lawmakers have not given up hope that they can complete their work by Saturday’s scheduled adjournment of the 2010 General Assembly. However, Senate Finance Committee

Chairman Charles J. Colgan, D-Prince William, publicly warned that the legislature may have to go into overtime—a common occurrence in recent years.

Complicating the work of the seven senators and six delegates struggling toward a budget deal: A grim tax-collection report for February from Secretary of Finance Richard D. “Ric Brown.

Though February usually is not month for robust collections, it was less so because of bad weather, Brown said in a letter to Colgan and House Appropriations Committee Chairman Lacey E. Putney, I-Bedford.

“If there is any concern, it is that the improving trend in withholding [of taxes] was marginally reversed as compared to the end of January,” said Brown.

“This is not a major setback, but it again underscores the downside risk associated with the uncertain economy and the mid-session forecast.”

Withholding—tax money taken out of the weekly paychecks of Virginians—was down 6 percent, compared with a flat February a year ago, Brown said.

Cox said Brown’s revenue report underscores the House’s insistence on a cash reserve for future contingencies.

The House originally wanted $165 million, but lowered it to $100 million—and now is down to $85 million.

The Senate, insisting the money should be a cushion against further reductions in public education, raised its proposed reserve from $10 million to $20 million.