By The Associated Press

RICHMOND, Va. - Key points in Gov. Bob McDonnell's proposed Virginia government budget for 2012-2014. All totals represent actions taken over both years of the biennial budget.

SIZE: About $85 billion. General fund from state taxes spent on core services such as public safety, health care and public schools totals $34.5 billion, about the same as the 2007-08 biennium.

REDUCTIONS: $258.6 million saved by not funding inflation costs for hospital rates under Medicaid.

$109 million from eliminating the allowance for inflation growth in non-classroom public school support services.

$108 million in expiring federal stimulus money for public schools that the state won't replace.

$81 million cut from projected enrollment increases to the Virginia Preschool Initiative that McDonnell's advisers say wildly exceed actual enrollment growth. Overall, funding for the program increases by about $5 million.

$65 million from not allowing Medicaid inflation increases for nursing homes.

$65 million cut from the state stipend that helped school districts retain non-instructional support and administrative employees from poaching by rival school systems.

$29.9 million continues reductions for indigent care at state-supported teaching hospitals.

$18.2 million cut in the Department of Medical Assistance Services by lowering income limits for eligibility for long-term care.

INCREASES: $2.2 billion previously announced boost in employer contributions to the underfunded Virginia Retirement System, about half of which comes from city and county governments.

$650 million for increased use of Medicaid, a federal-state health care entitlement program for the aged, needy and disabled that now consumes one-fifth of Virginia's general fund.

$438 million net increase for public education, most of it to meet revised minimum curriculum benchmarks under state law including classroom staffing ratios and teacher salaries.

$230 million previously announced for higher education to offset rising tuition rates.

$100 million for economic development, including about $60 million for commitments already made to businesses in years past and $40 million for new, ongoing efforts to recruit business.

$30 million for more community-based mental health care.

A previously announced 3 percent December 2012 one-time performance bonus provided state agencies can achieve operating savings of at least $160 million.

RESERVES: $300 million in deposits into Virginia's rainy day reserve fund, which was nearly depleted two years ago, nearly doubling it to $600 million _ only half of the fund's total five years ago.

$50 million for FACT, a new Federal Action Contingency Fund, intended as a hedge against congressional budget cuts that could hurt a Virginia economy highly on federal spending. It could be used in circumstances to which the rainy day fund would not apply.

$31.4 million as an expected unspent balance remaining at the close of the two-year budget on June 30, 2014.

___

Online:

Budget highlights on governor's Web site: http://www.governor.virginia.gov/

Track the 2012-14 budget bill: http://leg1.state.va.us/121/lis.htm

(Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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