Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, January 27, 1992 TAG: 9201270162
SECTION: VIRGINIA PAGE: A-3 EDITION: METRO
SOURCE: BONNIE V. WINSTON
DATELINE: RICHMOND LENGTH: Long
NEW FUNDS A TAXING SUBJECT
Three weeks and scores of tax plans into the 1992 General Assembly, Virginia's lawmakers are articulating the painfully obvious: There is little consensus on the state's most pressing needs and even less agreement on how to find money to meet them.Major tax packages have been placed before the assembly by House Finance Committee Chairman Richard Cranwell of Vinton and Senate Finance Committee chief Hunter Andrews of Hampton. Dozens of other senators and delegates have tax bills of their own.
While Andrews' $300 million-plus proposal is the most sweeping, he and Cranwell have each proposed new taxes on everything from cigarettes to newspaper advertising inserts. Cranwell also wants a half-cent increase, to 5 percent, in the state sales tax, with the money directed to retire a $1.1 billion bond issue for state construction projects and to alleviate disparities in state aid to urban and rural school systems.
Andrews and Gov. Douglas Wilder are backing a more modest, $535 million bond plan, with the debt to be retired from the state general fund. Any bond plan would require voter approval.
"I've heard mixed comments about [Andrews'] tax proposal. He has priorities and others [on the Senate Finance Committee] have their own priorities," said Sen. Richard Holland, D-Isle of Wight.
"There is no consensus on what programs to restore. It's simply too early," Holland said.
Legislators are up against Wilder's plan to use a combination of employee layoffs, cutbacks, and new taxes on hospitals and nursing homes to close a $567 million gap in the proposed two-year, $28 billion budget.
They also are up against their own uncertainties about a restless electorate, most of which now seems unhappy about reductions in state services but which last fall gave anti-tax Republicans historic gains in the state Senate.
Under the Wilder administration's budget proposal, state employees and college faculty would receive no raises, 900 state jobs would be cut, aid to public libraries would be slashed by $10 million, state grants to public television and radio stations would be cut by $2.8 million, the state arts council and the Center for Innovative Technology in Northern Virginia would be virtually eliminated, cuts to local mental health services would be instituted, and services to the non-farming public by the Virginia Tech Cooperative Extension Service would be wiped out.
Because a series of public hearings produced howls of hurt over Wilder's proposed cuts, Democrats have been talking more about closing the gap with higher taxes. Republicans have countered with a series of their own town meetings, which began in Chesapeake last week and there aired citizen gripes that taxes already are high enough.
While Republicans claim that people do not favor new taxes, Democrats argue that the GOP events are "staged."
"We've got serious problems in education and health care. And we need to look very strongly at some of these measures to raise revenues," said Sen. Stanley Walker, D-Norfolk.
"There is a lot of pain out there," agreed Sen. Walter Stosch, R-Henrico. "But it's choice time. To raise taxes is counterproductive to putting people back to work."
"I think I speak for most Republicans when I say the thing that has to be done is structural changes, cutting whole programs and agencies," said Sen. Robert Russell of Chesterfield, one of three Republican members of the Senate Finance Committee.
Another Republican, Del. Andy Guest of Warren, on Friday submitted an alternative budget he said would provide $300 million to plug the state's financial dike without higher taxes. His plan also would give modest raises to state employees and university faculty.
Guest, however, provided few details of where he would cut state spending to pay for his initiatives. He said he has no illusions his plan will gain favor from the assembly's Democratic majority.
Russell said he's waiting for a Finance Committee staff study before proposing specific reductions. But he argued that structural cuts will save enough money to restore funds trimmed from high priority items.
Russell cited higher education as one of his priorities. Unless colleges get more aid, "the magnitude of tuition increases will just be too much - up to 25 percent at community colleges," he said. "A lot of young people from middle-class homes who can't get any financial aid won't be able to afford to go to college."
Russell argued that once taxes are allowed on certain services and products now exempt from taxation, as Andrews and Cranwell are proposing, they are likely to remain taxed.
"It's like going down a one-way street," Russell said. "Have you ever known a tax to be repealed?"
The Andrews tax package is divided into various bills being introduced by several members of the Senate Finance Committee; the members themselves are not united or unanimous on the measures.
Though he is sponsoring one bill in the Andrews package, Sen. Elliot Schewel, D-Lynchburg, said he prefers other revenue-generating measures.
One, increasing the state income tax rate from 5.75 percent to 6.25 percent for those making more than $100,000 annually, also is backed by two other Democrats on the finance committee - Madison Marye of Shawsville and Edward Holland of Arlington.
A second would increase by 20 cents the state tax on cigarettes. The current levy is 2.5 cents a pack.
Schewel said the cigarette tax boost would raise $92 million annually, which he proposes to split between state and local governments.
Schewel's bill goes much further than Andrews' own cigarette tax bill. That proposal would raise the tax by 3 cents per pack, with the proceeds going to the state's general fund.
And Norfolk's Walker, a ranking member of the finance committee, has a third cigarette tax plan. He would double the tax, with the revenue going for health care improvements to be specified by a state commission that he heads.
Staff writer Rob Eure contributed to this story.
CRANWELL PROPOSAL\ $1.1 billion in bonds to be repaid from a half-cent increase in the state sales tax.\ \ 500 million for transportation\ \ $300 million for higher education\ \ $115 million for economic development projects\ \ $100 million for public safety\ \ $90 million for parks\ \ $45 million for health and human resources.
\ $100 million to $150 million left over each year for rural and poorer school districts in Virginia.