
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, December 29, 1994                   TAG: 9412290101
SECTION: CURRENT                    PAGE: NRV-1   EDITION: NEW RIVER VALLEY 
SOURCE: KENNETH SINGLETARY STAFF WRITER
DATELINE: RADFORD                                LENGTH: Medium

WARY OFFICIALS REVIEW EFFECTS OF PROPOSED TAX CUTS

Local government officials painted a grim picture Wednesday of what tax cuts proposed by Gov. Allen could mean to the New River Valley's governments.

Funding for education, public safety and social services could be cut in Radford. Real estate taxes could go up for the first time since the early 1970s in Christiansburg. Pearisburg might not be able to afford its new library. Real estate taxes in Narrows, already among the highest in the state, can't go much higher, officials from these localities and others said.

"Let's face it. The only thing you can do is raise property taxes - or cut services," Pearisburg Town Manager Kenneth Vittum said at a meeting attended by representatives of almost every New River Valley government.

Listening were two area state legislators, who appeared at times to be sympathetic. Sen. Milfourd "Bo" Trumbo, R-Fincastle, predicted Allen's budget and its $2.1 billion tax cut will not pass the General Assembly, which convenes Jan. 11, exactly as he submitted it.

That's good news to local government officials across the state, who were stunned when Allen proposed earlier this month doing away with the business, professional and occupational license tax over five years. Combined with proposed cuts to police funding, the reductions mean localities could lose in some cases up to one-fifth of their local sources of revenue.

"I think we're at a major crossroads here," said Blacksburg Mayor Roger Hedgepeth.

Hedgepeth and others said they have not heard many complaints about the business tax, which taxes firms on their gross receipts, meaning even those businesses running in the red must pay.

Del. Morgan Griffith, R-Salem, said business people in these parts aren't the type to complain, adding "I don't think there's any question that it's an unfair tax."

But Griffith said if the business tax is rescinded, the state should offer localities another source of revenue.

The rest of the area's legislators were at a public hearing on Allen's budget proposal in Richlands.

Christiansburg Town Manager John Lemley said this revenue cut is the first time in his 39 years on the job that the state has proposed doing away with a local source of revenue.

"I think it's a terrible precedent."

by CNB