- The Washington Times - Monday, February 6, 2006

RICHMOND — House Republicans yesterday rejected a tax increase proposed by Gov. Timothy M. Kaine, setting the stage for a financial standoff by gutting the Democrat’s plan to ease traffic congestion.

The House Finance Committee voted 14-8 along party lines to kill Mr. Kaine’s bills, which would have raised the sales tax on purchasing a car and increased the levy on car insurance.

A portion of the insurance revenue would have been dedicated to mass transit.

“All we’re hearing from the House leadership is ‘no,’ and that’s not a solution,” said Kevin Hall, a spokesman for Mr. Kaine. “It is bewildering that there are those in the House who would remove tools as opposed to offering constructive solutions of their own.”

The House has promised a transportation plan that uses part of the state’s billion-dollar surplus to fund roads without raising taxes. The proposal is expected to surface this week.

“It will put a whole bunch of new money into transportation,” House Appropriations Chairman Vincent F. Callahan Jr. said. “The governor’s increase was just too high. They can’t justify that to the public.”

The Fairfax County Republican sses no chance there will be a repeat of the 2004 legislative session, when lawmakers, after a record 115 days, approved a $1.38 billion tax increase to balance the budget.

At the time, the state faced a significant shortfall and was in danger of losing its prized AAA bond rating.

Now, Mr. Callahan said, legislators will not vote for a tax increase in the face of a “booming” economy and “huge” budget surplus. “The dynamic is just not there now,” he said.

However, Mr. Kaine will continue trying to build voter support for his transportation plan. He will speak today at a bipartisan smart-growth rally in Richmond and call for cooperation from legislators.

Mr. Kaine campaigned successfully last year on a promise to fix transportation and he held forums statewide to listen to residents fed up with long commutes on congested roads. This week, he will hold a series of talks on transportation and growth.

“The governor believes that there is a public expectation that this will be the year that we tackle transportation challenges,” Mr. Hall said.

Delegate Vivian E. Watts, Fairfax County Democrat, said the House panel’s vote killing the Kaine measure was not fair to Northern Virginia, which suffers the worst gridlock and gets the least back for its tax dollars.

“To say no taxes in Northern Virginia is cutting off your nose to spite your face,” she said.

Several Republicans, including panel member Delegate Jeffrey M. Frederick, argued the state should spend most of its surplus on transportation projects.

“We are flush with cash,” the Prince William County Republican said. “We have a transportation crisis, not a revenue crisis. Since the 2004 tax debate, we’ve had an excess of $3 billion more than what they forecasted. That’s significant, and the people know it.”

Mr. Hall said that 45 states have unexpected short-term surpluses because of economic growth and that using surplus money is “no way to build or maintain a modern transportation network.”

The House also is expected to kill a Senate plan that raises more than $1 billion a year for transportation, leaving lawmakers with little room for negotiation.

House Republicans agree with parts of Mr. Kaine’s plan, including his proposal to impose “abuser” fees for traffic violations such as speeding and drunken driving. The measure closely resembles a plan that the House passed last year. The House will introduce a similar bill this session.

They also agree with Mr. Kaine’s proposal to lock the Transportation Trust Fund so that it is used solely for transportation and cannot be raided during tough budget times.

But they are far apart on whether it is appropriate to spend general fund dollars on transportation projects. The general fund is reserved to pay for the state’s everyday operations such as schools, Medicaid and police.

Delegate Joe T. May said using general fund dollars is the “only ballgame” available this year. The Leesburg Republican, who voted for the 2004 tax increase, is confident an agreement will be forged. “Our constituents couldn’t be more vocal about it,” he said.

Yesterday’s vote was the first real roadblock for the newly inaugurated governor.

Mr. Kaine stressed bipartisanship on the campaign circuit, but it is not clear whether his other legislative proposals will pass the Republican-controlled legislature.

When former Gov. Mark Warner took office, the Democrat also got off to a rough start with a Republican-controlled legislature that routinely tested his mettle.


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