Tuesday, February 24, 2004
BUDGET: Warner critical of absent rebate
The governor said he would not accept a budget that doesn't fund long-term goals.
RICHMOND - Gov. Mark Warner on Monday repeated his demand for a tax and budget plan that funds "long-term investments" in essential state programs, one day after the General Assembly's two money committees approved vastly different spending plans for the next two years.
Warner said budget writers from the Senate and the House of Delegates have made meaningful progress toward meeting spending needs for the two-year budget cycle that begins July 1. But he insisted he would not accept a "cobbled-together budget" that fails to put the state on a path toward adequate, long-term funding of education, transportation, health care and certain other programs. "I think it's important that I keep making the case to the public that this is the year we fix the problem," Warner said in a telephone conference call from the National Governors Association meeting in Washington, D.C.
Warner said Virginia's triple-A bond rating hinges on stabilizing the budget. One Wall Street rating agency has placed the state on credit watch for a possible downgrade.
The Senate Finance Committee on Sunday endorsed a budget that adds $3.2 billion to Warner's $59 billion spending package. The Senate plan contains $3.8 billon in new taxes, including increased levies on cigarettes, gasoline, sales of goods and six-figure incomes.
The House Appropriations Committee took a different course, stripping away more than $1 billion in revenue that Warner plans to generate through a package of tax code changes. Those changes include increases in the sales tax on goods, the excise tax on cigarettes, and taxes on incomes greater than $100,000. Warner earmarked more than $600 million from his tax reform package for specific budget items.
The House panel balanced its budget by curtailing many of Warner's proposed spending increases, eliminating a dozen commercial and industrial sales tax exemptions, and using accounting strategies such as shifting $272 million from the priority transportation fund to the general fund. House leaders hailed the package as a responsible plan to meet urgent spending needs and minimize the burden on taxpayers.
"I think we have a responsible budget in the House that accomplishes great things," said House Majority Leader Morgan Griffith, R-Salem.
The Senate and House are expected to pass their respective budget plans this week. Negotiators from the two Republican-controlled chambers will try to reconcile differences between the two plans before the legislature's scheduled March 13 adjournment.
Warner would not say how an impasse between the houses would be handled. Nor would he say how much of the Senate's tax package he could support, choosing only to characterize it as "aggressive."
Sen. Thomas Norment, R-Williamsburg, urged his colleagues Monday to avoid the kind of acrimony that pervaded budget negotiations in 2001, when the House and Senate failed to reach an agreement on changes to the spending plan.
"I would hope that members of this body would continue to be civil and temperate in their public characterizations of other budget bills that might be offered," Norment said. "I am certainly hopeful that might prevent some of the vitriolic language that many of us have experienced in the past."
House Democrats bashed the plan produced by the GOP-dominated Appropriations Committee, saying it shortchanges transportation, public safety and education.
In addition to shifting transportation dollars to the general fund, the House proposal freezes aid to local police departments, reduces per diem payments to local jails and provides no funds for a Warner initiative to retain state troopers.
Neither the Senate nor House budgets earmark funds to increase teachers' salaries. House budget-writers also scrapped Warner's plan to expand targeted school programs such as those for at-risk 4-year-olds and students who don't speak English.
"After going over the budget that came out yesterday, we would give it 'D' - barely passing," said Del. Ward Armstrong, D-Henry County, at a press conference that House Democrats staged Monday.
Democrats criticized Republicans for relying on revenue from eliminating sales tax exemptions on industries such as utilities, telecommunications and airlines. Warner opposes the repeal and has questioned GOP claims that it could generate $290 million in general fund and transportation money over the next two years.
Armstrong said the competing budget plans have effectively isolated tax-resistant House Republicans. But Griffith argued that taxpayers would have little stomach for the "hefty" increases proposed by Warner and the Senate.
"If we had been able to do everything last year that we're able to do this year, people would have been ecstatic," Griffith said. "They would have been dancing in the streets. But this year, because everybody's getting hungry for large tax increases, suddenly everybody's saying this is not good enough."
Warner gently criticized both houses for failing to advance the car tax rebate beyond its current level of 70 percent, where it has remained since 2001. Warner's budget would increase the rebate to 85 percent in 2006. House and Senate budget-writers opted to wait for stronger revenue growth before approving further cuts in the much opposed personal property tax, which then-Gov. Jim Gilmore targeted for elimination when he took office in 1998.
Griffith said Warner needs to keep the car tax cut in his plan, because the governor uses it to support his claim that his comprehensive tax reform plan would reduce taxes for 65 percent of Virginia's households.
"He's got to take credit for something he didn't do in order to make his plan not look like the massive tax increase it is," Griffith said.
Staff writer Kevin Miller
contributed to this report.
Warner said budget writers from the Senate and the House of Delegates have made meaningful progress toward meeting spending needs for the two-year budget cycle that begins July 1. But he insisted he would not accept a "cobbled-together budget" that fails to put the state on a path toward adequate, long-term funding of education, transportation, health care and certain other programs. "I think it's important that I keep making the case to the public that this is the year we fix the problem," Warner said in a telephone conference call from the National Governors Association meeting in Washington, D.C.
Warner said Virginia's triple-A bond rating hinges on stabilizing the budget. One Wall Street rating agency has placed the state on credit watch for a possible downgrade.
The Senate Finance Committee on Sunday endorsed a budget that adds $3.2 billion to Warner's $59 billion spending package. The Senate plan contains $3.8 billon in new taxes, including increased levies on cigarettes, gasoline, sales of goods and six-figure incomes.
The House Appropriations Committee took a different course, stripping away more than $1 billion in revenue that Warner plans to generate through a package of tax code changes. Those changes include increases in the sales tax on goods, the excise tax on cigarettes, and taxes on incomes greater than $100,000. Warner earmarked more than $600 million from his tax reform package for specific budget items.
The House panel balanced its budget by curtailing many of Warner's proposed spending increases, eliminating a dozen commercial and industrial sales tax exemptions, and using accounting strategies such as shifting $272 million from the priority transportation fund to the general fund. House leaders hailed the package as a responsible plan to meet urgent spending needs and minimize the burden on taxpayers.
"I think we have a responsible budget in the House that accomplishes great things," said House Majority Leader Morgan Griffith, R-Salem.
The Senate and House are expected to pass their respective budget plans this week. Negotiators from the two Republican-controlled chambers will try to reconcile differences between the two plans before the legislature's scheduled March 13 adjournment.
Warner would not say how an impasse between the houses would be handled. Nor would he say how much of the Senate's tax package he could support, choosing only to characterize it as "aggressive."
Sen. Thomas Norment, R-Williamsburg, urged his colleagues Monday to avoid the kind of acrimony that pervaded budget negotiations in 2001, when the House and Senate failed to reach an agreement on changes to the spending plan.
"I would hope that members of this body would continue to be civil and temperate in their public characterizations of other budget bills that might be offered," Norment said. "I am certainly hopeful that might prevent some of the vitriolic language that many of us have experienced in the past."
House Democrats bashed the plan produced by the GOP-dominated Appropriations Committee, saying it shortchanges transportation, public safety and education.
In addition to shifting transportation dollars to the general fund, the House proposal freezes aid to local police departments, reduces per diem payments to local jails and provides no funds for a Warner initiative to retain state troopers.
Neither the Senate nor House budgets earmark funds to increase teachers' salaries. House budget-writers also scrapped Warner's plan to expand targeted school programs such as those for at-risk 4-year-olds and students who don't speak English.
"After going over the budget that came out yesterday, we would give it 'D' - barely passing," said Del. Ward Armstrong, D-Henry County, at a press conference that House Democrats staged Monday.
Democrats criticized Republicans for relying on revenue from eliminating sales tax exemptions on industries such as utilities, telecommunications and airlines. Warner opposes the repeal and has questioned GOP claims that it could generate $290 million in general fund and transportation money over the next two years.
Armstrong said the competing budget plans have effectively isolated tax-resistant House Republicans. But Griffith argued that taxpayers would have little stomach for the "hefty" increases proposed by Warner and the Senate.
"If we had been able to do everything last year that we're able to do this year, people would have been ecstatic," Griffith said. "They would have been dancing in the streets. But this year, because everybody's getting hungry for large tax increases, suddenly everybody's saying this is not good enough."
Warner gently criticized both houses for failing to advance the car tax rebate beyond its current level of 70 percent, where it has remained since 2001. Warner's budget would increase the rebate to 85 percent in 2006. House and Senate budget-writers opted to wait for stronger revenue growth before approving further cuts in the much opposed personal property tax, which then-Gov. Jim Gilmore targeted for elimination when he took office in 1998.
Griffith said Warner needs to keep the car tax cut in his plan, because the governor uses it to support his claim that his comprehensive tax reform plan would reduce taxes for 65 percent of Virginia's households.
"He's got to take credit for something he didn't do in order to make his plan not look like the massive tax increase it is," Griffith said.
Staff writer Kevin Miller
contributed to this report.
