Despite a budget surplus estimated to be $700 million, Virginia’s governor this week warned state lawmakers to avoid going on a spending spree for new programs.

Gov. Mark Warner said the unchecked growth of existing spending commitments could provoke a new fiscal crisis as soon as 2007 unless lawmakers invest the current surplus wisely.

Warner also gave his firmest assurance yet that a transportation package he will propose by early December won’t include a proposed fuel tax increase.

He said Oct. 27 on his monthly radio call-in show on the Virginia News Network that legislators must keep in mind the rising costs of existing budget commitments – including two new prisons; reimbursing localities for the car tax; additional costs in Medicaid and education funding.

Warner said he fears lawmakers in the session that begins in January, eager to secure state programs for constituents in a year when all 100 House seats are up for election, will permanently build into the budget spending requirements that require more money each year.

In the first year of his term, Warner and the General Assembly reconciled budgets after revenues fell $6 billion short. The state ended its 2004 budget in June $324 million in the black, and revenues for the first quarter of fiscal 2005 were up 10.5 percent over last year. The governor said this year’s surplus would be “clearly many hundreds of millions.”

Warner will propose his amendments for the second year of the current two-year budget on Dec. 17, but plans to announce a separate transportation initiative earlier that month.

Additional money is necessary to revive Virginia’s dormant highway construction program “whether it is through taxes, tolls, other types of revenues,” Warner said.

But he left little doubt that the most conventional road-funding levy, fuel taxes, won’t be in his plan