- The Washington Times - Wednesday, December 17, 2003

RICHMOND — Gov. Mark Warner yesterday presented a $60 billion, two-year budget that calls for $2.3 billion in new spending and $1 billion in new revenue via a 1-cent increase in the sales tax.

The Warner budget would allot $103.6 million to provide a 3 percent pay raise to all state workers, public-school employees and local health workers in November 2005.

The plan also would provide $761.5 million in new spending for education and $870 million in new spending for health and human services.

The budget includes $180 million in savings and reductions and would deposit $210 million into the state’s “rainy-day” fund to end three years of drawdowns on the emergency fund, the Democratic governor said.

“These bills meet our responsibility to balance our budget in a fiscally conservative manner that not only protects our core priorities but that also restores our commitment to fiscal integrity, with the specific aim of preserving Virginia’s AAA bond rating,” Mr. Warner said as he presented his 2005-06 budget to the joint money committees of the General Assembly yesterday.

Key Republican lawmakers greeted the Warner budget with skepticism.

“It’s an ambitious plan, but structurally, there are some problems,” said Delegate Vincent F. Callahan Jr., Fairfax Republican and chairman of the House Appropriations Committee. “Embedded in the budget is language assuming [his] tax increases will be successful, and that’s rather optimistic on his part. … The final product will have little resemblance to what you see today.”

House Republican Leader H. Morgan Griffith of Salem was even more critical.

“The governor has done a nice job throwing out Christmas presents to those individuals he wants to support his plan,” he said. “It makes us look like a Grinch if we don’t go along with it. … I wouldn’t say it’s ‘dead on arrival.’ I’d say it has a serious flu. The governor’s plan didn’t get the vaccine.”

Included in the budget is Mr. Warner’s “Commonwealth of Opportunity” tax-reform plan, which would create $1 billion in revenue in the next two years by increasing the sales tax from 4.5 percent to 5.5 percent and the cigarette tax from 2.5 cents per pack to 25 cents. It also would raise the income tax on households that earn more than $100,000 a year and phase out the car tax.

Mr. Griffith criticized the proposed 22 percent increase in the sales tax. He said because the tax includes everything from light bulbs to school supplies, it would hit the people least able to afford it the hardest and will hurt the state’s economic recovery.

When asked whether he is willing to compromise on any elements of his tax plan, Mr. Warner reiterated that he has seen no alternative plans.

“I’m the only one with a tax plan out there at this point, and I hope we’ll see some other plans so we can start the debate. I said I will keep an open mind. We have a fair plan that is conservative and allows Virginia to meet its base obligations,” he said.

Lawmakers promised to devise alternatives.

Mr. Warner said the $761.5 million in new spending for elementary and public education will alleviate the pressure on local governments to raise property taxes. He said he hopes the boost in funding to higher education will hold down tuition increases, give more financial aid to needy students and make it easier for students to get classes they need to graduate in four years.

The $870 million for health and human services will allow the state to meet its obligations in Medicaid and foster care, and will cover shortfalls in the growing number of caseloads in children’s health-insurance programs, the governor said.

Other new spending includes $392 million for transportation, $159 million to build the State Agency Radio System and $97 million for prison security.

The state faces a $1.2 billion budget shortfall that would be erased with the tax increase and the $180 million proposed savings, said Warner spokeswoman Ellen Qualls.

Mr. Warner said the plan calls for cuts in each state agency, renegotiating telecommunications contracts, closing warehouses and postponing equipment purchases to save money.

• This article is based in part on wire service reports.

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