- The Washington Times - Thursday, August 29, 2002

Gov. Mark R. Warner yesterday cited Virginia's $1.5 billion budget shortfall as an urgent reason for Northern Virginia to pass the sales-tax referendum this fall.
"It even makes the case stronger because the idea that somehow the state is going to have other available resources to put into transportation in Northern Virginia just isn't the case," Mr. Warner, a Democrat, said during WTOP Radio's monthly "Ask the Governor" call-in program.
But Peter Ferrara, president of Virginia Club for Growth, an anti-tax group opposed to the referendum, said the shortfall shows why the proposed sales-tax increase should fail.
"The governor is telling us now he wants a sales tax to bail out his mismanagement," Mr. Ferrara said. "The shortfall shows fiscal mismanagement and they need to slow down growth and spending and not raise taxes."
Voters in nine jurisdictions in Northern Virginia will decide in November whether to increase the 4.5 percent sales tax to 5 percent to fund transit programs and road construction around the region.
Last week, Mr. Warner announced the state faces a $1.5 billion budget shortfall. He has asked state agencies to start reviewing how they can cut their budgets by 7 percent, 11 percent and 15 percent, with submissions due by the end of next month. All discretionary spending on the state level has been halted and, as of Sept. 1, agencies will be working with month-to-month budgets.
"There are some areas where we can find some substantial savings those functions that cut across state agencies," Mr. Warner said yesterday, referring to technology, procurement and human resources.
He also warned that this latest round of spending cuts will be worse than the $3.8 billion worth of cuts made statewide earlier this year.
"We are going to have budget pressures that are unprecedented," he said. "Many Virginians have not felt the full effects of [the last round of cuts]. We used the last remaining reserves and the least painful of the cuts. This next $1.5 billion will actually be tougher to deal with than the [last round] because all the easy cuts have been made."
Mr. Warner did not rule out raising taxes, including the cigarette tax, after being asked about such an option three times during the program and afterward.
"At some point we are going to have this conversation with Virginians saying, for the amount of taxes we pay, this is the amount of services we offer. That kind of honest dialogue has been missing for a long time," the governor said.
Mr. Ferrara said Mr. Warner is being dishonest because he denied he would raise taxes during last fall's campaign.
"The governor needs to make a public apology to [former Republican gubernatorial candidate] Mark Earley for calling him a liar for warning people that Warner would raise taxes," Mr. Ferrara said. "Now look what he is doing. He won't promise to not raise our taxes.
"People already pay too much in taxes and the higher taxes will only make the economy worse. [The governor] is not being honest with us," he added.
To combat the budget shortfall and the lagging economy, Mr. Warner announced he is creating a steering committee to help create his economic development strategic plan, "One Virginia One Future."
The committee is being led by Secretary of Commerce and Trade Michael J. Schewel, and will hold public hearings throughout the state, including one Sept. 9 at Northern Virginia Community College in Manassas.
"The commonwealth needs to focus on economic development now more than ever to combat the recent recession," Mr. Warner said.

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