Tuesday, January 19, 2010
Governor decries higher taxes in State of the Commonwealth speech
"We will not turn our economy around by taxing Virginians more," McDonnell said.
Associated Press
Gov. Bob McDonnell arrives in the House chambers to deliver his State of the Commonwealth address before a joint session of the General Assembly.
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The State of the Commonwealth
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Gov. Kaine's speech last week
RICHMOND -- Gov. Bob McDonnell took a firm stand against tax increases Monday night, calling on the General Assembly to balance a $4.2 billion budget shortfall with spending cuts while approving new incentives to make Virginia more attractive to businesses.
In a speech to a joint session of the legislature, Virginia's new Republican governor made a clean break from the budget plan proposed last month by his Democratic predecessor, Tim Kaine, by vowing to veto any legislation that increases taxes.
"We will not turn our economy around by taxing Virginians more," McDonnell said. "To do so would ignore the indisputable truth of economics that the fiscal fortune of any government is tied to the economic prosperity of its people.
"Therefore, if you pass a bill in this recession that raises taxes on the hardworking families of Virginia, I will veto it. And if you pass a budget embedded with those same tax increases, I will not approve it."
Republican lawmakers jumped to their feet and applauded McDonnell's declaration, while many Democrats were less enthusiastic.
McDonnell took office Saturday, inheriting a shortfall that will force deep cuts to state services and test his ability to gain cooperation from a politically divided legislature. Kaine's budget-balancing plan called for ending the state's car tax relief subsidies, and imposing an income tax increase to generate new revenue for localities.
McDonnell said the budget he inherited from Kaine "is dire and it is unbalanced." But he did not spell out specific plans for balancing the state's books, instead issuing a vague overview of what "belt-tightening" will mean for Virginians.
"It will mean more cuts to certain state agencies," McDonnell said. "Some state services will be reduced, some possibly consolidated or eliminated. We must do our best to treat our dedicated state employees fairly. This is not only a short-term reality but a longer-term necessity."
McDonnell said state government must "find new ways to deliver government services effectively, while reducing spending." He said he will push ahead with privatizing Virginia's state-run liquor stores "in a fiscally prudent manner."
Returning to the House of Delegates chamber where he served for 14 years, McDonnell appealed for cooperation from lawmakers, saying: "If we can show leadership and agree to cooperate, we will move Virginia through these difficult times. I ask that you make decisions based not on which house or political party or branch of government wins, but whether or not Virginia wins."
Some Democrats questioned whether McDonnell can balance the budget without decimating essential state services.
"The pain will be enormous," said Sen. John Edwards, D-Roanoke.
Republicans said the cuts will be painful but necessary.
"We have spent money and created more government over the last 10 years than any time in our history, and I think we should go there first to start to look for having our reductions," said Sen. Steve Newman, R-Lynchburg, chairman of the Senate Republican Caucus.
House Majority Leader Morgan Griffith, R-Salem, said McDonnell took a firm stand on taxes while reaching out to Democrats on spending priorities.
" 'We'll figure it out together,' is what he's trying to say," Griffith said. "But if you think you're going to solve this problem by raising $2 billion in taxes ... that one's not going to fly."
House Minority Leader Ward Armstrong, D-Henry County, said McDonnell was gracious and "continued to sound the same bipartisan tone that he struck during the transition and on Saturday." He said he liked the new governor's emphasis on economic development.
Despite the shortfall, McDonnell urged lawmakers to approve new incentives to recruit and retain businesses, repeating ideas that were central to his campaign platform.
He asked lawmakers to double the funding for the Governor's Opportunity Fund -- used to close deals for business locations and expansions -- to $30 million over two years. He called for relaxing the threshold for awarding a $1,000-per-job tax credit from 100 jobs to 50 jobs, and streamlining licensing requirements for new and expanding companies. And he endorsed more aggressive efforts to promote tourism, film production and the wine industry, recalling a campaign visit to Blue Ridge Vineyard in Botetourt County.
McDonnell again vowed to reopen Interstate highway rest areas that were closed on Kaine's watch, conduct a performance audit of the Virginia Department of Transportation and raise speed limits on rural portions of interstates to 70 mph.
McDonnell asked state workers and business and community leaders to be open to change as he and the General Assembly wrestle with the budget crisis.
"When bold proposals for reform are offered by me and by members of this assembly to change the ways we do things, do not just tell us all of the reasons change should not or cannot occur," he said. "Let's work together to implement the bold and sensible changes that will put Virginia on a secure financial footing."
