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The
Washington Post By Jo Becker
"I'm open to everything except a sales tax or an income tax increase," said Howell, who represents Stafford. Howell's statements were a departure from the more stringent anti-tax rhetoric he has espoused in recent weeks. In letters and statements, Howell expressed the view that because higher taxes take money out of the pockets of consumers, they would have a devastating effect on an economy just beginning to recover and would cost jobs. Meanwhile, Warner and Sen. John H. Chichester (R-Stafford), who also has offered a wide-ranging tax plan, picked up support from some statewide business groups. The business leaders commended them for recognizing that Virginia must spend more on transportation and schools and take steps to preserve Virginia's AAA bond rating, which is at risk and, if lost, would lead to higher interest rates on state debt. Among the groups that attended a news conference to express support for the tax plans were the Virginia Business Council, the Greater Washington Board of Trade and the Northern Virginia Roundtable. In a statement, the Virginia Business Council said it "vigorously supports immediate action to change the Commonwealth's tax policy to create a more efficient tax system" that meets "the critical service obligations of our state and local governments." In his weekly briefing with reporters Friday, Howell said that while he remains concerned that any tax increase could slow economic growth, a "better case can be made" for raising gas taxes because, like taxes on cigarettes, they can be considered a "user fee." Several other leading Republicans said they would not be surprised to find either or both in the House budget plan. "It's something we will be giving serious consideration to," said House Appropriations Chairman Vincent F. Callahan Jr. (Fairfax). "I've always supported increasing the cigarette tax, and the last time we raised the gas tax was in 1986." Howell also sharply criticized national and state anti-tax groups for threatening Republicans with primaries if they vote for broad-based tax increases, as the Virginia chapter of the conservative Club for Growth did this week. While Howell shares that group's opposition to a broad-based tax increase, he said such threats "complicate what I'm trying to do." "Anytime you've got someone making threats, I don't think that helps the process," Howell said. Warner's plan would raise an additional $1 billion over two years primarily by raising the state's sales and cigarette taxes. It would also increase income taxes on those with taxable incomes greater than $100,000 while cutting them for lower-income people. Also in the governor's plan are tax reductions on cars, groceries and estates and tax increases for corporations that take advantage of certain tax shelters. Both the House and Senate are controlled by Republicans, but the House is expected to be the tougher chamber for Warner. In part that's because Chichester, who chairs the Senate Finance Committee, has proposed a tax plan that goes beyond the governor's in the amount it would raise for education, health and transportation. Like Warner, Chichester would cut some taxes while raising others. His plan adds a penny per dollar to the sales tax rate, but his proposed cigarette tax increase is higher than Warner's; and unlike Warner, he includes an increase in the gas tax of 3 cents a gallon to help solve traffic congestion. Chichester also goes beyond Warner in making income tax more progressive by adding two higher tax brackets for the well-off and expanding a tax credit for the poor. Howell's statements signal that there may be areas of compromise between the House and Senate in a year in which many observers are predicting a budget impasse because of intraparty disputes. "The members are agreeable to tinkering around the margins if it is necessary," said Del. Leo C. Wardrup Jr. (R-Virginia Beach), who is close to Howell. But by no means is there a solid consensus in the House Republican Caucus. Last year, the Senate killed a House plan to guarantee that the state's road building trust fund could not be raided for other purposes during tight budget times. House Majority Leader H. Morgan Griffith (R-Salem) said that though gas and cigarette taxes are more palatable to House Republicans than any of the other taxes under discussion, "there is still strong sentiment for no tax increases in the House caucus." Higher cigarette taxes are also a concern for lawmakers who hail from tobacco growing or manufacturing districts. Senate Majority Leader Walter A. Stosch (R-Henrico), who co-hosts the weekly news briefing with Howell, said a "significant" increase in the tobacco tax would be no way to thank Philip Morris for moving its headquarters to Richmond. "It's too early to be looking for unity," Stosch said, "because the issues are too complex." Staff writer Chris L. Jenkins contributed to this report. © 2004 The Washington Post Company. |
