- The Washington Times - Sunday, June 13, 2004

Virginia’s lawmakers on Wednesday will consider amendments that Gov. Mark R. Warner has proposed for the state’s two-year, $60 billion budget.

The one-day reconvened legislative session is being held for the Republican-controlled General Assembly to give final approval of the budget, which goes into effect July 1. This year marked an unprecedented 115 days of work as lawmakers feuded over taxes and spending before reaching a compromise during a special session on the budget.

The Democratic governor is expected to sign a tax-reform plan that raises $1.38 billion in revenue with a combination of tax increases and cuts. He also is expected to sign a plan that caps at $950 million the amount the state pays to localities for money lost under the car-tax relief program. The plan, unless changed next year, ensures that drivers will pay higher car-tax bills starting in 2006.

Mr. Warner can offer amendments to the budget, and the legislature can approve or reject them.

Mr. Warner has recommended using $1 million in state money for the Brown v. Board of Education Scholarship Program and Fund, after billionaire philanthropist John Kluge of Charlottesville last month pledged $1 million of his money if the state would match it.

The legislature approved $50,000 for the scholarship, though Mr. Warner had sought $2 million.

The fund would give scholarships to blacks who were denied an education from 1954 to 1964 when many school systems in Virginia closed their doors rather than abide by court-ordered integration.

Warner spokeswoman Ellen Qualls said the fund is “setting things right” by providing belated yet deserved opportunities for people to better their economic condition and improve their lives and communities. “How can you say no to that?” she asked.

Other proposed amendments:

• Require that about $19 million raised by removing the sales tax exemption on public service corporations be dedicated to the Transportation Trust Fund. The budget, as passed, does not spend that money, but it does not dedicate it specifically to the road-building fund.

• Earmark nearly $1.1 million for a state crackdown on street gangs. It would fund three new prosecutors to focus on gang activity in Northern Virginia and create a strike force of a dozen state troopers and special agents to combat gangs statewide.

• Recommend setting aside $1.25 million that would allow the state to match federal funding for firefighters and other emergency responders.

• Set aside an additional $1.15 million to pay for increased tourism promotion.

• Reverse the legislature’s decision to eliminate the Department of Minority Business Enterprises and restore $1.3 million for supporting development of minority- and women-owned businesses.

The tax-reform plan, which takes effect Sept. 1, increases the state sales tax from 4.5 cents to a nickel on the dollar, the cigarette tax from 2.5 cents to 30 cents per pack by March, the tax on real-estate transactions from 15 cents per $100 of value to 25 cents and puts a 10 percent excise tax on other tobacco products. The plan also eliminates corporate loopholes and the sales tax exemptions for public-service companies.

The tax cuts include eliminating the marriage penalty, reducing the food tax by 1.5 cents on the dollar by July 2007 and changing the income-tax filing threshold so that thousands of the state’s poorest residents no longer have to pay taxes.

The budget allots about $1.6 billion in new funds for public education. It also provides increased funding for higher education, public safety, health and human resources, and state employee compensation. However, the budget does not address transportation issues.

Local governments get one-quarter of a penny of the half-cent sales tax increase, and that additional money is put in a fund earmarked either for local education or for localities to give residents property-tax relief.

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

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