Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, February 15, 1992 TAG: 9202170198
SECTION: VIRGINIA PAGE: A3 EDITION: NEW RIVER VALLEY
SOURCE: ROB EURE STAFF WRITER
DATELINE: RICHMOND LENGTH: Medium
ASSEMBLY FINALIZES TAX PLANS
The Virginia Senate on Friday passed $157 million in tax increases, including a soak-the-rich boost in the state income tax, and sent them to await an uncertain fate in the House of Delegates.Meanwhile tobacco proved it remains the king of state industry as the House killed a Democratic plan to increase the tax on a pack of cigarettes by 5 cents.
The House and Senate spent Friday voting on separate packages designed to produce extra revenue for the legislature's money committees to use as they finalize the two-year, $28 billion budget.
The House Appropriations and Senate Finance committees will More General Assembly news. A5 vote Sunday afternoon on their versions of the budget for 1992 to 1994.
Democratic majorities in each chamber suffered losses on their spending plans at the hands of Republicans and tax-wary Democrats. The tobacco tax was the largest defeat for the leadership, leaving House budgeteers with $60 million less than they had hoped.
Each chamber already faced a gap of about $30 million, caused by the defeat of Gov. Douglas Wilder's proposed tax on the health-care industry.
The Senate's income-tax increase on Virginians with taxable incomes of $100,000 or more is the centerpiece of a package of the revenue bills.
Increasing the income tax rate from 5.75 percent to 6.25 percent on income over $100,000 would affect 33,000 taxpayers, or 1.3 percent of Virginia's filers, and raise $106 million in the next two years. The tax bill on someone with $200,000 in taxable income would increase $345.
Senate Majority Leader Hunter Andrews, D-Hampton, said he hopes to use the money, along with funds from several other measures, for Medicaid, additional aid to education and raises for state employees.
But Sen. Mark Earley, R-Chesapeake, said the tax is aimed "at the group of people who we despise most, those who have succeeded." He and other Republicans argued that further spending cuts, not new taxes, are the right response to the recession.
In the House, tobacco's grip on Virginia's economy crushed efforts to raise the tax on cigarettes by a nickel a pack despite a plan to spend 1 cent of the increase to restore cuts to the extension service at Virginia Tech, a move backers hoped would win some rural support.
But legislators from Southside's tobacco fields and Richmond's manufacturing base joined to defeat the plan, 56-42. They warned that the tax could drive the industry out of state and reduce the $2.4 billion in tobacco exports from Hampton Roads each year.
"You are beginning to milk the sacred cow," said Del. Frank Hall, D-Richmond.
But the increase would give Virginia, the nation's third-largest tobacco producer, the fourth lowest tax - 7.5 cents per pack - said House Majority Leader Richard Cranwell, D-Vinton, who proposed the tax.
Supporters said revenue from the higher levy on tobacco would go to Medicaid. Given tobacco's effects on health "it's altogether fit and proper this be regarded as a user tax," said Del. Clifton Woodrum, D-Roanoke.
Both chambers approved bills placing the sales tax on hard liquor sold in state-owned stores. That tax will go on top of a 44 percent markup and a 20 percent excise tax on spirits. The House version would raise $26 million, all of it for the state. The Senate would give 1 cent of the tax to localities, raising $19.6 million for the state.
\ YEA OR NAY ON INCOME TAX INCREASE
IN FAVOR: Sens. Virgil Goode, D-Rocky Mount; Madison Marye, D-Shawsville; Frank Nolen, D-New Hope; Jackson Reasor, D-Bluefield; Elliot Schewel, D- Lynchburg; Malfourd "Bo" Trumbo, R-Fincastle; William Wampler, R-Bristol
OPPOSED: Sen. Brandon Bell, R-Roanoke.
\ YEA OR NAY ON TOBACCO TAX PROPOSAL
IN FAVOR: Dels. Steven Agee, R-Salem; Richard Cranwell, D-Vinton; Creigh Deeds, D-Warm Springs; Thomas Jackson, D-Hillsville; G.C. Jennings, D-Marion; Joan Munford, D-Blacksburg; Victor Thomas, D-Roanoke; Clifton Woodrum, D-Roanoke.
OPPOSED: Ward Armstrong, D-Martinsville; Tommy Baker, R-Dublin; Willard Finney, D-Rocky Mount; Joseph Johnson, D-Abingdon; Lacey Putney, I-Bedford; Roscoe Reynolds, D-Martinsville.
Keywords:
GENERAL ASSEMBLY
Memo: shorter version ran in the Metro edition.