- The Washington Times - Thursday, January 30, 2003

RICHMOND Lawmakers yesterday rejected most of the General Assembly bills created to fix the state's budget crisis through tax increases, including legislation to increase the Virginia sales tax.
"The situation is, we're past the skin, we're past the muscle, we're past the bone. We're sucking marrow," Delegate James H. Dillard II said after his bill was defeated.
Mr. Dillard, Fairfax County Republican, said the increase would have raised an additional $800 million, with half of the money going to education and half going toward Virginia's general fund, which pays for mental health services.
Among the other proposed tax increases that failed was the Personal Property Tax Relief Act of 1998, also known as the car-tax bill.
Meanwhile, two key committees passed legislation to eliminate Virginia's inheritance tax, also known as the death tax.
"This is economically the right decision for Virginia right now," said state Sen. Thomas K. Norment Jr., a Williamsburg Republican and one of the bill's primary sponsors.
Mr. Norment's bill passed the Senate Finance Committee and will receive a full Senate vote later this week.
A companion bill sponsored by Delegates Robert Tata and Robert F. McDonnell, Virginia Beach Republicans, passed the House Finance Committee and also will receive a full House vote later this week.
If the bills are passed, Virginia law would comply with federal law by 2004 and take effect in 2005. The bills have no impact on Virginia's current budget crisis.
Still, some Republicans have criticized the bill because the state is faced with a $2.1 billion budget shortfall.
"I just don't comprehend how we can at this time be talking about additional tax cuts," Mr. Dillard said.

Three bills that would have increased taxes on cigarettes died yesterday before the Senate Finance Committee.
One bill would have increased Virginia's tax on a pack of cigarettes from 2.5 cents the nation's lowest state tax to 60 cents. Supporters of the bill introduced by Sen. Mary Margaret Whipple, Arlington Democrat, said it would provide needed revenue for state and local governments while decreasing the number of smokers and the health care costs tied to smoking.
Opponents included organizations representing farm groups, retailers and convenience stores, manufacturers' associations and Philip Morris USA, the cigarette-making unit of Altria Corp. The bill was defeated on an 11-3 vote.
Another measure, by Sen. Janet Howell, Fairfax County Democrat, would have taxed cigarettes at 4 cents per pack when they are manufactured.
The bill failed on a 10-2 vote.
A measure that would have allowed Isle of Wight County to marginally increase its tax on cigarettes died on a 7-7 tie vote.

Bills to repeal the tax paid posthumously on the estates of millionaires won overwhelming committee approval and advanced to the House and Senate floors yesterday over objections that it amounts to a giveaway to the wealthy.
Supporters said that unless Virginia eliminates the estate tax, families will lose small farms they have held for generations, and capital and jobs will migrate to 33 other states that have ended the levy. Congress voted in 2001 to gradually eliminate the federal estate tax.
The Senate Finance Committee voted 9-2 to report the Republican-backed measure. Later, the House Finance Committee voted 15-4, with almost no debate, to endorse an identical measure.
Sen. Richard L. Saslaw, Fairfax County Democrat, questioned the logic of the tax cut, which Republicans estimate will trim state revenue by $120 million a year, while the state faces budget a shortfall of at least $1.2 billion.
"I know that everyone here is going to be back wringing their hands and saying, 'Oh, we just don't have enough money. We shouldn't have done this and we shouldn't have done that,' " Mr. Saslaw said.
The bill's chief sponsor, Sen. Thomas K. Norment, James City Republican, noted that the tax repeal won't affect Virginia's budget until 2005.
Buttressing his claims were nearly a dozen representatives of business, agriculture and anti-tax groups. They noted that Virginians don't notice the state estate tax now because it is paid as a percentage of the federal tax, but it would be conspicuous when the federal tax disappears.

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