Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, March 4, 1992 TAG: 9203040243
SECTION: VIRGINIA PAGE: B-1 EDITION: METRO
SOURCE: GREG SCHNEIDER and ROB EURE
DATELINE: RICHMOND LENGTH: Medium
Wilder's surprise announcement freed up $31 million that House and Senate budget crafters were quick to grab as they wrapped up work on a compromise spending plan for the next two years.
"I think he was saving himself an embarrassment," Sen. Richard Holland, D-Windsor, said of Wilder. The Senate already has voted to retain the drug tax, and with few alternatives available to raise cash for the budget, was unlikely to back down.
"I don't know if the governor saw a burning bush or what," said Del. Thomas Jackson, D-Hillsville, who has been crusading for additional state aid to underfinanced schools.
Wilder has campaigned through much of his political career for removal of the sales tax on drugs. Two years ago, the legislature agreed to end the tax this July, giving Wilder perhaps the biggest victory of his administration.
With Wilder having dropped his presidential bid and having lost his main legislative initiative - taxing health-care providers - his administration was loath to admit Tuesday to admit that the tax switch was another retreat.
"He's not backing off on anything," said Secretary of Finance Paul Timmreck. "He wants people to be able to leave the session here with a decent amount for [school] disparities."
Wilder's move may have lifted a roadblock to negotiations over differences between the House and Senate budgets.
A conference committee of senior legislators unveiled a compromise on the $28 billion, two-year state budget late Tuesday. It provides an additional $80 million for poor school districts, including the money from the non-prescription drug tax.
The Senate had $115 million in its original budget for poor schools, but that plan rested on an income tax increase on the wealthy that was defeated in the House.
Without the income tax, the budgeteers settled on a House plan to raid the Virginia Retirement System for $88 million. That money helped provide a 2 percent pay raise for state employees and reduced some budget cuts Wilder had recommended.
Another $20 million would come from imposing the 4.5 percent state sales tax on liquor sold in ABC stores.
The compromise budget restores some funding for the Center for Innovative Technology in Northern Virginia, the Virginia Tech Cooperative Extension Service, libraries and the Commission for the Arts.
The plan also restores $44 million the House had wanted to cut from the Virginia Lottery's advertising budget, and it scraps a Republican-backed proposal to put greater controls on the use of state aircraft by public officials.
The budget plan hinges on final action today in the House on retaining the tax on non-prescription drugs. If the House goes along with the governor and the Senate, the tax will expire in July 1994, after Wilder has left office.
by CNB