- The Washington Times - Thursday, January 22, 2004

RICHMOND — Republican lawmakers are trying to hold the line against Gov. Mark Warner’s call for raising sales taxes and income taxes to balance the budget.

Some say there is still fat in the state budget that can be cut. Others say the strengthening economy will produce enough revenue, if state spending doesn’t increase.

Either way, they say, the budget doesn’t need the $1 billion revenue boost from the Democratic governor’s plan to raise the sales tax from 4.5 percent to 5.5 percent.

State Sen. William Bolling, Caroline County Republican, said tax increases and budget cuts will not be necessary because of the improving economy.

“The worst of our economic troubles are behind us,” said Mr. Bolling. “Under the worst-case scenario, it seems every state agency will have more money next year.”

A House Appropriations Committee memo outlines ways to cut $1 billion from the budget, essentially erasing Mr. Warner’s proposed tax increases. The memo, which is being used as a framework for a new budget, suggests spending cuts across the board, including the elimination of a pay raise for state employees and cuts in public safety, education and Medicaid.

In addition, the House Rules Committee on Wednesday passed a resolution asking Mr. Warner to resubmit his budget without the tax increases.

Besides raising the sales tax, Mr. Warner’s two-year, $59 billion budget would increase the cigarette tax from 2.5 cents per pack to 25 cents, and raise the state income tax on households that earn more than $100,000 a year. It also calls for $2.3 billion in new spending, mostly for education and health and human services.

“People in Virginia are taxed plenty,” said state Sen. Kenneth T. Cuccinelli II, Fairfax County Republican and a leading antitax advocate. “You can’t just identify these kinds of savings and then blow it off the following year and try and raise taxes.”

Mr. Cuccinelli said he wants to maintain “revenue neutrality” and that the government should look at more cost-savings efforts. He suggested that Mr. Warner implement the $750 million in cost savings identified by a 2002 commission headed by former Gov. L. Douglas Wilder.

Commissioned by Mr. Warner in January 2002, the Wilder panel reviewed the state government and recommended ways to streamline operations and prevent waste. Among the panel’s suggestions:

• Develop new approaches to buying and collecting data about the spending patterns of agencies.

• Negotiate statewide contracts for bulk purchases of information technology.

• Use Web-based technology for customer-service activities, such as licensing.

• Use technology to consolidate business operations, such as payroll processing and accounts receivable.

Warner spokeswoman Ellen Qualls said most of the commission’s recommendations already have been implemented and are saving the state money.

“It’s ironic for those who now say we’re not acting to their satisfaction on the Wilder report, since most of it is already incorporated in what we’re doing,” Miss Qualls said. “Many of those things that aren’t were killed by this legislature last year.”

Mr. Bolling said economic growth will produce $2 billion in the next two years, more than Mr. Warner calls for in tax increases.

In his State of the Commonwealth address Jan. 14, Mr. Warner called such positive economic projections a “fool’s wager.”

“Some will say we can grow our way out of this problem — and we all celebrate the fact that Virginia’s economy is improving. … To bet our financial future that those [booming] days will return is a fool’s wager,” Mr. Warner said.

But, Mr. Bolling said, “if we have the patience to allow the economic recovery to take hold and show fiscal discipline, we can adequately fund the vast majority of needs without raising taxes.”

Meanwhile, the top House Republican said he would consider a cigarette- and gas-tax increase, as long as the sales- and income-tax structures remain untouched.

“I’m open to everything except a sales-tax and income-tax increase,” said House Speaker William J. Howell, Fredericksburg Republican.

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