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

DATE: TUESDAY, January 24, 1995                   TAG: 9501240101
SECTION: VIRGINIA                    PAGE: C-4   EDITION: METRO 
SOURCE: Associated Press
DATELINE: RICHMOND                                LENGTH: Medium

SUPPORTERS ARGUE FOR ALLEN'S TAX PLAN

Gov. George Allen's plan to abolish a business tax would boost economic development and add $1,376 a year into the average Virginian's pocket by 2004, economists trying to rescue the imperiled proposal said Monday.

But opponents kept up their attack, arguing that the tax is not the job-killer its critics portray it to be.

Virginia Citizens for a Sound Economic Foundation released a study that said the Business, Professional and Occupational License tax, or BPOL, ``is particularly hostile to economic development, and its elimination would contribute significantly to income growth into the next century.''

The study was conducted by Mark Crain, a George Mason University economist who served on Allen's government reform commission. He invited other economists to review his study for accuracy and objectivity.

Allen's proposal is widely viewed as being in trouble with the legislature's Democratic majority. Jim Miller, former Reagan administration budget director and chairman of the foundation, praised Allen for sticking to his guns.

``The governor deserves accolades for his courage,'' said Miller. ``This is not an easy thing to champion.''

Allen did make one concession to opponents last week when he proposed keeping a $300 million annual state subsidy for affected localities going indefinitely. His original plan was to end the subsidy after five years.

Local government representatives had said they would have to raise property taxes after the subsidy expired.

``The argument advanced by localities no longer has validity because the governor has guaranteed the revenue,'' Miller said at a news conference.

But local government representatives said Allen's proposal caps the subsidy at $300 million a year and does not take growth into account.

They also noted that what the state gives, the state can take away. Michael Amyx, executive director of the Virginia Municipal League, said state aid for local police departments has fallen $336 million short of the $1.3 billion that should have been appropriated since 1980.

Norfolk Revenue Commissioner Sam Barfield said the business community's argument that the BPOL tax hurts industrial recruitment is ``hogwash.'' He said he never receives complaints about the BPOL tax.

Critics of the tax say it is unfair because it is based on gross receipts with no regard for profitability.

``If a person can't make it with the BPOL tax, they ought to be out of business anyway,'' Barfield said.

by CNB