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TAX PLAN WOULD REAP MILLIONS FOR VIRGINIA SCHOOLS: Virginia House and Senate Negotiate Compromise on Tax Increase

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"For too long, Virginia has failed to pay its fair share for public schools, putting pressure on local governments to raise property taxes to pick up the slack," Warner said.

Last week, the Republican-controlled Virginia General Assembly passed a $1.36 billion tax increase that will mean more money for education and other state programs than the $1 billion tax plan that Virginia Gov. Mark Warner (D) proposed late last year.

Warner’s plan proposed to generate $1 billion in new state money, including $715 million for basic school aid, by increasing the state sales tax by one cent and raising taxes on cigarettes and on individuals who earn over $100,000 annually.

“For too long, Virginia has failed to pay its fair share for public schools, putting pressure on local governments to raise property taxes to pick up the slack,” Warner said. “At the same time, as Virginia grows, more and more students are entering our schools every year at all levels, from preschool to graduate school.”

The plan that passed the legislature will increase the state’s sales tax by one-half of a penny; increase the cigarette tax from 2.5 cents per pack to 30 cents a pack; and gradually reduce the tax on groceries. It will also limit income tax breaks for corporations and some older Virginians while increasing fees on recording real estate deeds.

In supporting the tax increases, a group of maverick Republicans bucked the party leadership and went against several antitax groups that have vowed primary challenges when the delegates seek reelection next year. One opposition group, Citizens for a Sound Economy, led by former House Majority Leader Dick Armey, has already seen success in fighting back tax increases for additional education spending. In Alabama, the group worked to defeat a $1.2 billion tax increase package proposed by Alabama Gov. Bob Riley (R) that would have helped erase the state’s budget shortfall, shifted the tax burden from the poor to the rich, and improved public education in the state.

These antitax efforts were countered by a massive public relations campaign and heavy lobbying by groups representing teachers, the state police, and health care organizations.

“This has to be one of the most critical votes in the history of the commonwealth,” Sen. H. Russell Potts Jr. (R) told the Washington Post. “We have taken a bold step in making sure that future obligations are funded and future generations are adequately cared for.”

Read “Virginia Passes Landmark Increases in Taxes” at
http://www.washingtonpost.com/wp-dyn/articles/A46654-2004Apr27.html.

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