The Virginia General Assembly is considering a sharp increase in funding for community living programs for people with mental disabilities, continuing the state's efforts to reverse long-standing gaps in care.

The increase is being led largely by Republican budget writers in the House of Delegates, who announced a plan yesterday to increase state spending by $38.1 million over two years for programs for people with mental disabilities. The money would allow 800 people with such conditions as Down syndrome to live in group homes close to their families, or receive in-home nursing or other local services, instead of being placed in state institutions that are predominantly in the southern and western parts of the state.

The House plan rivals more modest proposals by Gov. Timothy M. Kaine (D) and the state Senate; both have offered enough money in their budgets for 150 additional people to receive vouchers that pay for their care through Medicaid, the federal-state program for the poor and the disabled. Members of both chambers will review the plans and negotiate a compromise, which must be approved by Kaine.

"We felt we had to continue our investment to these families," said Del. Phillip A. Hamilton (R-Newport News), who helped develop the plan. "We've taken some time to address our waiting list, and we wanted to continue the progress we've made."

Until several years ago, Virginia moved slowly in providing community placements and services, which generally are about half the cost of institutional care. In 2002, a national study found that about one in four Virginians with mental or developmental disabilities lived in institutions, twice the national rate.

Over the past four years, however, the state has added more than 1,350 group-home slots to address what many lawmakers acknowledged was the state's poor track record.

But the state still has a waiting list of 4,056 people, about half of whom are considered in urgent situations, such as an elderly parent taking care of an adult child. Advocates said that in a tight budget year, the potential for hundreds of additional slots shows a change in how the state is addressing issues of people with mental disabilities.

"This does show how far we've come," said Nancy Mercer, executive director of the Arc of Northern Virginia, which advocates on behalf of people with mental disabilities.

The differences in the three proposals are significant. If the House plan were to pass, for instance, Fairfax County and the city of Falls Church could help 93 people obtain community placements and services. If Kaine's or the Senate plan were to pass, the county and city would receive five slots.