- The Washington Times - Wednesday, November 27, 2002

Virginia Gov. Mark R. Warner said yesterday that he is considering new tolls on roads, revising the state tax code and laying off more state workers to shore up a nearly $1 billion budget deficit.
"I think in light of the transportation referendum's defeat, we are going to have to consider tolling some road projects if they are going to be built," Mr. Warner, a Democrat, said during WTOP Radio's monthly "Ask the Governor" call-in show.
The governor was referring to referendums he had strongly supported that would have increased the sales tax in Northern Virginia and Hampton Roads to fund transportation projects in those areas. Voters overwhelmingly rejected those measures Nov. 5.
Mr. Warner said he will not wait for legislative leaders in the Republican-led General Assembly to take on restructuring the state tax code.
"With the unprecedented budget shortfalls, I think we need a revamping of the tax code," he said. "I think the whole relationship between the state and localities needs to be re-examined."
Virginia faces a $1 billion budget deficit, and Mr. Warner is expected to present his budget Dec. 20.
The state government has already laid off 1,800 workers and eliminated about 4,000 vacant positions in two rounds of budget cuts that reduced spending in the state's $51 billion, two-year budget by about $4.7 billion.
"I believe there will be additional layoffs, I don't have an exact number at this point," Mr. Warner said. "As we prepare to go through another billion dollars in cuts most money is spent on personnel. If you're going to make those kinds of cuts, it's going to affect personnel."
The state has about 100,000 workers on its payroll.
State officials said Warner will be able to draw about $250 million from the state's rainy-day fund but that the rest of the money will have to come from program cuts.
Some lawmakers have suggested raising the cigarette tax from 2 cents a pack to as high as 20 cents to close the budget gap.
"It would raise $105 million annually, which in a $51 billion budget doesn't have a big impact, but it's still $105 million that we need like oxygen at this point," said Delegate Kenneth R. Melvin, Norfolk Democrat.
Virginia, one of the largest tobacco producers in the country, imposes the lowest cigarette tax in the nation.
Mr. Warner did not rule out increasing the cigarette tax but said his budget would not be based on it. "I am not assuming that is going to happen; we are building a budget that is based on savings," he said, adding that the General Assembly would have to assume leadership in increasing the tax.
Legislative leaders have made it clear that they do not support raising taxes to erase the budget shortfall.
"We are not going to tax ourselves to prosperity," said House Speaker-designate William J. Howell, Stafford Republican.
In previous cuts this year, certain staple services such as primary education, Medicare and public safety have not been affected. All sides acknowledge that this is likely to change with this latest round.
"The governor has said a number of times that he can't promise that the administrative side of [these staple services] would be completely protected," spokeswoman Ellen Qualls said.
"We are going to have a difficult budget session," said Delegate Vincent F. Callahan Jr., Fairfax Republican and chairman of the House Appropriations Committee. "We are going to have to cut back significantly [and] look at the things that have not been touched."
Mr. Callahan suggested that aid to public education is a likely target. "It's the only thing we can do. The alternative is raising taxes," he said.
According to the state Department of Planning and Budget, Virginia is expected to spend more than $18 billion in the next two years on public education.
Mr. Callahan said any spending cuts are likely to occur on a "piecemeal" basis and would not be across the board.
Mr. Howell, who will be sworn in as the House speaker when the General Assembly convenes in January, said core spending for primary education would not be cut. Instead, programs that do not deal directly with education are likely see a reduction in funds.
"Something like Project Discovery that doesn't deal directly with standards of quality will likely see some cuts," said Mr. Howell, referring to a state program that is intended to discourage at-risk teens from dropping out. The program's budget is $72,000.
The state might also consider charging fees for services that the state has absorbed.
House Majority Leader Morgan Griffith, Salem Republican, is considering having residents pay when they file for custodial agreements during divorce proceedings. The state now pays the $64 fee.
"It doesn't cost you a penny to fight over who will have the kids on Friday night," he said.
This article is based in part on wire service reports.


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