RICHMOND — Key senators said yesterday the House compromise package that includes a half-cent sales-tax increase falls short of meeting Virginia’s needs.
The House on Tuesday passed the measure, which would also gradually increase the cigarette tax, after delegates added an amendment that says the plan will expire April 24 if a two-year budget is not adopted by then.
Senate Finance Committee Chairman John H. Chichester yesterday suggested the Senate could strip the deadline amendment, indicating the weeks-long budget impasse would continue.
“Maybe we’ll amend it out of there,” the Stafford County Republican said. “How about that?”
The committee did not vote on the measure yesterday. Mr. Chichester would not speculate as to when the members will vote on the House plan or how they would amend it.
The House plan raises the 4.5 percent sales tax to 5 percent and raises the cigarette tax from 2.5 cents per pack to 20 cents per pack, starting Sept. 1. The cigarette tax would rise to 30 cents per pack next year.
It also reduces the food tax, eliminates the estate tax and several elements of the income tax.
The last general tax increase in Virginia was in 1986, when sales and gasoline taxes were raised.
Yesterday, the Senate budget staff told committee members that the plan would generate only $690 million, not the $972 million initially projected by its author, Delegate Harry J. Parrish, Prince William County Republican. Some delegates said Tuesday the House plan would raise about $743 million.
The reduction in revenue stemmed from last-minute House amendments to the bill, one of which stripped it of a tax increase on real estate transactions.
Senators said yesterday the main difference between what they want and the House plan is a long-term investment in the state.
“We all have a common goal: to produce a budget that reflects our responsibility to the people of Virginia in the immediate future and also 10 years and beyond,” Mr. Chichester said.
Sen. William C. Wampler, Bristol City Republican and a budget negotiator, agreed. “My concern is for a long-term fix,” he said. “I am not sure that we are there yet. The clock is ticking.”
Senate Democrats were more critical of the House plan. They said the state must provide more revenue for the neediest residents.
“This ought to end with an enormous investment in Virginia’s future,” said Sen. Richard L. Saslaw, Fairfax County Democrat. “Nobody should leave here thinking this is going to be a slam-dunk. It’s not.”
Mr. Saslaw said repealing the estate tax so the state’s wealthiest people have a smaller tax burden was not a fair trade-off for raising the sales tax, which would fall disproportionately on the poor population.
However, senators applauded Mr. Parrish and the 16 other Republicans who broke ranks from the party’s staunch antitax leadership and majority to join the Democrats in passing the bill.
“There were 17 rather brave souls yesterday that rose to the occasion and put partisan politics in the rear seat in favor of the people of Virginia,” Mr. Chichester said.
Most of those maverick delegates said they will not accept a bill for more than the $972 million that was originally sought.
Mr. Chichester promised the committee would meet quickly.
Other senators said they hope a counterproposal will be ready for the House by Monday. The House is expected to return Tuesday afternoon.
The time in between will be used to reach consensus in the committee, Mr. Chichester said. “There is no document that is going to accomplish all the goals of everyone, but we are going to do the best we can,” he said.
Sen. Kenneth W. Stolle, Virginia Beach Republican, said the final agreement will look different. “This is not the end product,” he said.
Mr. Stolle also said the committee would try to stay near $972 million. “There are avenues to keep this below $1 billion,” he said. “It all depends on how you package it.”
Sen. Charles R. Hawkins, Pittsylvania County Republican, said Virginia is serving as a model for other states.
“Virginia once again is showing the leadership that we’re willing to make the hard choices when it comes to putting our financial house in order,” he said. “This is not the Senate’s budget, this is not the House’s budget, this is not the governor’s budget. This budget is for the commonwealth of Virginia. That’s our job and that’s our charge.”
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