DATE: Saturday, November 15, 1997           TAG: 9711150370
SECTION: FRONT                   PAGE: A1   EDITION: FINAL 

SOURCE: BY WARREN FISKE, STAFF WRITER 

DATELINE: RICHMOND                          LENGTH:   58 lines

ALLEN DETAILS PROPOSAL TO JUMP-START CAR-TAX CUT HE'LL SET ASIDE MONEY IN NEXT BUDGET, HE SAYS

Gov. George F. Allen told key legislators Friday that he will include $260 million in the two-year budget he will propose next month to begin abolishing the personal property tax on most cars.

The money would pay for the first two installments of Gov.-elect James S. Gilmore's promise to phase out over five years the tax on the first $20,000 of assessed value for privately owned vehicles.

Encouraged by projections showing 7.9 percent growth in state revenues this year, Allen also promised to include in his budget:

$20 million in 1999 to repeal the sales tax on non-prescription drugs.

$39 million to continue the freeze on state college tuitions for another two years.

$60 million to clean up the Chesapeake Bay and reduce nutrients in the water by 40 percent.

$32 million in new money for remedial education.

Allen voiced his plans in a closed-door meeting Friday afternoon with six senior legislators who hold key posts on money committees.

Ken Stroupe, Allen's press secretary, confirmed the governor's intentions in an interview after the meeting.

Gilmore and his two Republican ticket-mates swept state elections earlier this month largely on their promise to abolish the car tax on 90 percent of vehicles. Allen, a Republican who campaigned strongly for Gilmore, had hinted broadly that he would include money for the repeal in his final budget.

``Obviously, we're very pleased with the governor's recommendations,'' said Mark A. Miner, a spokesman for Gilmore.

The $260 million recommended by Allen would repeal car taxes on the first $1,700 of assessed value next fiscal year, ending June 30, 1999, and on the first $3,000 of value for the budget year ending June 30, 2000.

Allen officially will present his budget to the General Assembly in mid-December. His term will expire Jan. 17, when Gilmore will be inaugurated.

The budget recommendations must be approved by the General Assembly. Many Democrats criticized the proposed car-tax cut this fall, calling it a short-sighted gimmick that would drain needed revenues from education and transportation.

But a growing number of Democrats are interpreting Gilmore's strong election victory over Donald S. Beyer Jr. as a mandate to enact the cut.

``Maybe it's best just to cut it and move on,'' Del. Glenn R. Croshaw, D-Virginia Beach, said earlier this week.

The General Assembly voted to repeal the sales tax on non-prescription drugs in the early 1990s, but delayed implementing the plan because the revenues were needed to combat recession and later to fund other spending initiatives. ILLUSTRATION: Graphic

POTENTIAL SAVINGS

Fiscal year, ending June 30, 1999: $63-$74

Fiscal year, ending June 30, 2000: $111-$131

-Savings depend on which city you live KEYWORDS: VIRGINIA STATE BUDGET PERSONAL PROPERTY TAX

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