The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Friday, January 27, 1995               TAG: 9501270612
SECTION: LOCAL                    PAGE: B3   EDITION: FINAL 
SOURCE: BY MARGARET EDDS AND GREG SCHNEIDER, STAFF WRITERS 
                                             LENGTH: Long  :  103 lines

BUSINESS TAX GIVES N.C. AN EDGE, ALLEN SAYS

Jealousy of the Tar Heel state is the Allen administration's newest weapon in pushing elimination of a gross receipts tax on Virginia businesses.

Economic development officials have listed six businesses, involving about 1,700 jobs and almost $200 million in investment, that they say were lost to North Carolina over the last three years.

The losses, the officials say, result at least in part from the state's Business, Professional and Occupational License tax.

The administration is refusing to name the businesses on privacy grounds. But in a noon speech Thursday, Gov. George F. Allen warned that ``the rulers in the Virginia legislature'' are giving North Carolina ``a competitive advantage over Virginia'' if they reject his tax plan.

A committee of the National Federation of Independent Business, the group to which Allen spoke, endorsed his plan after the speech. The group represents 13,000 small businesses.

Allen's plan to curtail Family Life Education classes in Virginia schools suffered a setback Thursday in the Senate Education Committee.

The committee, in what appeared to be a unanimous voice vote, approved a bill making sex education classes mandatory statewide unless a parent withdraws permission in writing.

That is the current practice, but the provision has never been set in Virginia law.

The Allen administration favors a different tack: giving individual school divisions the option of dropping family life education, and requiring parents to ``opt in'' or give written permission before their children take sex education classes.

The committee took no action on the administration bill, sponsored by Sen. Kenneth W. Stolle, R-Virginia Beach.

Democratic Sen. L. Louise Lucas of Portsmouth read the Old Testament lesson. Republican Del. Robert McDonnell of Virginia Beach made the introductions. And Allen said Thursday morning's Commonwealth Prayer Breakfast could be a model for restoring unity to the viciously partisan General Assembly session.

``This is the most useful and unifying meeting I've been to,'' the Republican governor told several hundred prayerful guests in the Richmond Marriott. ``Maybe this will be the start of something new.''

Allen's call for unity had its limits, however, as evidenced by an off-the-cuff joke he made regarding homosexuals.

An earlier speaker had reminisced about meeting the woman he would marry at such a prayer breakfast, and then pointed to his 13-year-old son and quipped that he might do the same. When Allen took the podium, he told the boy not to be in such a hurry.

And besides, the governor said, when he looked at the boy's table, ``the table was full of men. That's not the type of spouse you want.''

As the crowd laughed, Allen added: ``This is at least the type of place you can say that and people won't chastise you.''

That set the audience to applauding, including Lucas, and Allen gleefully pointed out that he had caught her agreeing with him.

While Allen is pushing for $403 million in spending cuts, a fellow Republican is seeking a pay raise for the legislators.

Del. Vincent F. Callahan Jr. of Fairfax County has introduced a budget amendment to raise lawmakers' salaries to $21,000. Delegates now make $17,640, senators $18,000. Callahan also proposed raising the House of Delegates speaker's salary from $32,000 to $35,000.

``I don't think $21,000 a year is an exorbitant salary for what amounts to a full-time job,'' Callahan said Wednesday. ``Supervisors in Fairfax County make $45,000 and we put in as many hours as they do.''

Allen spokesman Ken Stroupe said the administration has not had time to review Callahan's proposal, which would cost $235,200 a year.

Callahan said the General Assembly last raised its salaries eight years ago, and that three years ago delegates reduced their salaries from $18,000 to $17,640.

The Senate Education and Health Committee killed a bill Thursday that would have slashed the budget of an agency that oversees higher education in Virginia.

Officials of the State Council on Higher Education said their operations would have been crippled by a bill, backed by the Allen administration, to cut $1.4 million and 16 positions from the agency's budget.

Nearly every year since 1986, when the General Assembly passed a law requiring that schools open after Labor Day, bills to repeal the action have been introduced - and defeated.

On Thursday, legislators again dashed the hopes of local school boards.

By an 8-7 margin, the Senate Education and Health Committee indefinitely tabled a bill to amend the so-called ``King's Dominion law.''

Sen. Elliot S. Schewel, D-Lynchburg, the committee chairman and sponsor of the bill, said the action effectively killed the measure. He said he doubted the issue could be resurrected by the House.

``I introduce it every year and it is killed every year,'' Schewel said.

The bill has ``universal support within the educational community,'' but the state's powerful tourism industry has lobbied successfully against it, Schewel said. It boils down to economics: the industry says starting school after Labor Day allows students to remain longer on summer jobs, particularly during the busy holiday weekend.

State law allows the state Board of Education to grant waivers for school districts to start earlier than Labor Day under special circumstances, such as in mountainous districts where snow often disrupts the school calendar. MEMO: Staff writer Jon Glass and The Associated Press contributed to this

report.

KEYWORDS: GENERAL ASSEMBLY by CNB