Wednesday, January 20, 2010
Va. House to vote on tax boost
The former governor included a 1 percent income tax increase in his proposed budget.
General Assembly 2011
Among the major issues: The state's continuing efforts to provide services with fewer dollars and Gov. McDonnell's plan to privatize liquor stores. Session ends Feb. 26.
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RICHMOND -- The House of Delegates will have to vote "yea" or "nay" on former Gov. Tim Kaine's proposal to increase Virginia's state income tax rate.
On his way out the door, Kaine, a Democrat, used a 1 percent increase in the income tax to balance the budget he bequeathed to his Republican successor, Gov. Bob McDonnell. McDonnell and leaders in the Republican-controlled House have ruled out any tax increases this year, despite the most severe state budget crunch in generations.
In the normal course of business, a tax-hike proposal would simply have been killed in a legislative committee. But in a seldom-used maneuver made possible by a rules change two years ago, the House Rules Committee voted Tuesday to send the measure to the House floor without a recommendation, pro or con.
That way, every member of the House will be forced to participate in an up-or-down vote on a tax increase in an election year -- a vote that could provide campaign fodder for opponents.
The Kaine proposal was introduced in the House by Del. Bob Brink, D-Arlington. If fully implemented, it would raise the maximum income tax rate from 5.75 percent to 6.75 percent. All of the new revenue would go to localities to replace revenue formerly raised by the car tax, which would be eliminated.
The car tax, once a major revenue source for localities, was slashed in 1998 at the behest of then-Gov. Jim Gilmore, a Republican. It was to be phased out completely, but the phaseout was frozen when state finances deteriorated.
Kaine's proposal would finish the job and "eliminate the car tax once and for all," Brink told the committee. If the measure were adopted, he said, Virginia's overall state and local tax burden would go from 41st to 40th in the nation.
Neighboring maximum state income tax rates range from 6 percent in Tennessee to 9.23 percent in Maryland.
If Kaine's proposal isn't adopted, Brink said, "either we're going to blow a hole in local governments' budgets, we're going to force them to reinstate the hated car tax, or we'll be forced to find nearly $2 billion in additional cuts to a biennial budget that's already been cut to the bone."
As of Tuesday, McDonnell still hadn't revealed his plan to plug that hole.
He may present his ideas for cuts sometime this week, he told reporters after a 52-minute speech to the legislature Monday night.
Glimpses of the plan could emerge Thursday when the governor is to meet with General Assembly budget negotiators. That's what some legislators hope, anyway.
"We need a lot of substance. We need a lot of detail," said Spotsylvania County Democratic Sen. Edd Houck, a budget negotiator, repeating a critique that McDonnell's speech Monday night was short on specifics.
That uncertainty, coupled with the knowledge that cuts are coming, has many groups bracing for impact.
Among them is the Virginia Association of School Superintendents, which gathered Tuesday in Richmond.
"I don't believe we're going to avoid cuts," Suffolk Superintendent Milton Liverman told a crowd of school administrators. Liverman, the association president, noted that sharp reductions to school funding could harm instruction.
"We have to make people who are making the decisions about these cuts aware of the impacts," he said.
