ROANOKE TIMES

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

DATE: FRIDAY, February 3, 1995                   TAG: 9502030085
SECTION: VIRGINIA                    PAGE: A-1   EDITION: METRO 
SOURCE: DAVID M. POOLE AND WARREN FISKE STAFF WRITERS
DATELINE: RICHMOND                                LENGTH: Medium


ALLEN'S TAX CUTS QUASHED

Gov. George Allen suffered the biggest setback of his year-old administration Thursday when Democrats on two General Assembly money committees repudiated his tax-cut initiatives.

The rejection capped a day in which the legislature thumbed its nose at virtually every element of Allen's attempt to overhaul government. The Senate also snubbed welfare reform and charter schools and trimmed Allen's request for money to build prisons.

Democratic lawmakers showed no election-year trepidation in bucking a plan that they say would provide modest tax relief at the expense of law enforcement, higher education and mental health services.

``I'm not willing to sell out the future of Virginia for 33 pieces of silver,'' declared Senate Finance Chairman Hunter Andrews, referring to the $33 in state income tax relief Allen's bill would mean to a middle-income family of four.

With virtually no hope of reviving his signature proposal this year, Allen vowed to press forward in hopes of exacting revenge against Democrats this November when all 140 legislative seats will be on the ballot.

Allen said Democrats acted cowardly by dispatching the tax cuts in ``smoke-filled committee rooms'' and denying him a hearing before the full Senate and House of Delegates.

The Republican chief executive said he would use every means at his disposal to force floor votes in both chambers.

``The people of Virginia will know where everyone stands,'' said Allen, flanked by GOP lawmakers at a news conference minutes before the money committees met.

Allen refused to say whether he would compromise. Democrats, angered by the governor's description of them as ``elitist and status-quo dictators,'' were in no mood to extend an olive branch. Many seemed thrilled that they ruined the governor's day.

``Why compromise when you're ahead?'' asked House Speaker Thomas Moss, D-Norfolk. ``If anyone should be offering a compromise, it's him.''

Moss said there was nothing insidious about killing bills in committee, a process that was in place when Allen served in the state legislature. He also said Democrats did not fear a floor vote, as Allen charged.

``I've gotten about 300 letters from home, and maybe two or three were for the tax cuts,'' he said.

The quick demise of the five-year, $2.1 billion reduction in state individual income taxes and local business-receipts taxes left some lawmakers wondering how Allen came up with the idea in the first place.

Del. Lacey Putney, a Bedford lawyer and the assembly's lone independent, said Allen mentioned nothing about cutting taxes during the gubernatorial campaign in 1993 or his first 11 months in office.

The first indication, Putney said, came last December after Allen was host at a Williamsburg conference of Republican governors, where the mood was euphoric following the GOP's massive victories in congressional elections.

``Something tells me that his tax cut may have been spawned at that meeting,'' Putney said.

State Sen. John Chichester, a Republican from Fredericksburg, faulted Allen for not consulting with GOP lawmakers before announcing his tax proposals in December.

``I don't think the philosophy of the bills was well thought out,'' Chichester said. ``... No one can pull off these kinds of reforms without first bouncing it off the people who have to carry the ball.''

In closed-door meetings, some Republican lawmakers complained that the tax relief would lead to $149 million in spending cuts for popular programs in their districts such as schools, museums and cooperative extension services.

Thursday, Allen was asked to explain his basis for thinking that his mandate included cutting taxes.

Allen said his goal from the start was to slow the rate of growth in state government spending; that creating jobs was a top priority; that people should be able to keep more of what they earned; and that the only way to control growth was to limit the amount of tax revenue.

The Senate Finance Committee - in a straight party decision - voted 12-3 to kill both of Allen's tax cut initiatives. The House Finance Committee voted 14-8 to dispatch a plan to eliminate local gross-receipts business taxes and 15-7 to reject a plan to triple the personal exemption for state income taxes.

The Senate Finance Committee also rejected Allen's proposed prison bond issue of about $400 million and passed a $172 million alternative sponsored by a Democratic senator.



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