The Virginia Organizing Project : General Assembly Wrap-Up

General Assembly Wrap-Up

General Assembly fails to deal with many major issues

In what was more or less a holding action, the 2003 session of the Virginia General Assembly refused to deal with many of the most pressing issues facing the Commonwealth.

With all 140 seats in the legislature up for grabs this fall, legislators had one message for those advocating adequate state funding for public schools, for higher education, for transportation or mental health funding and those advocating reform of the state’s unfair, inadequate and obsolete tax system — “Wait until next year.”

Instead, members of the Virginia Senate and House of Delegates spent the 2003 session focusing on the state’s budget crunch with a patch job that most senior legislators admit they’ll have to repeat next year because of a failure to deal with the underlying cause of the budget crisis.

They also found time to dabble in social issues, passing three controversial abortion bills. They passed a bill making it harder for resident aliens to get a driver’s license. And they found time to pass an election year tax break for the very wealthy — a repeal of the estate tax which was also vetoed by the governor.

The repeal of the estate tax — which applies only to estates valued at more than $1 million — sailed through the legislature even though lawmakers said the state’s budget crisis prevented them from fulfilling previous promises to fully phase out the state’s personal property tax on cars and to phase out the state sales tax on food.

The Virginia Organizing Project joined with many other groups to support the Governor’s veto. Fortunately, Governor Warner’s veto of the estate tax repeal was upheld on April 2.

The estate tax repeal would have cost the state more than $200 million over the next two years.

Ironically, while the legislators were trying to put money into the pockets of its wealthiest citizens, they took money out of the pockets of average citizens, passing fee increases on court costs and obtaining a driver’s license and marking up the price of alcohol at state-run liquor stores.

Those and other fee hikes, along with massive cuts in government services, were needed to fill a hole in the state budget of more than $1 billion.

Legislators dismissively rejected other proposed solutions to the budget crunch, rejecting attempts to raise taxes on tobacco and on gasoline.

The General Assembly also deferred all bills that would have reformed Virginia’s tax system. That included a measure proposed by the Virginia Organizing Project and sponsored by Sen. Louise Lucas, D-Portsmouth, Senate Bill 1348.

That bill would not only have modernized Virginia’s tax system and made it more equitable — currently those with the lowest income pay the highest percentage of their income in state and local taxes — it would have raised more than $1.3 billion in new revenue, more than enough to have filled the hole in the budget.

Although Senator Lucas’ bill, like all other tax reform bills, was referred to a commission studying the issue, it drew praise from members of the Senate Finance Committee.

“If we were to pass this bill, we’d all be defeated for re-election,” said Sen. Charles Colgan, D-Manassas. “But it might be worth it.”

“There are parts of this bill I like very much and other parts that I don’t like,” said Sen. Kevin Miller, R-Harrisonburg. “But I expect that eventually we’ll have to do something very much like this.”

Proponents of a fair, equitable and adequate system of taxation in Virginia will have to wait until next year. And hope that this time “next year” actually comes.

Movement to reform Virginia tax structure gains momentum

The Virginia Organizing Project’s campaign, which aims to make Virginia’s tax system fair, adequate and modern, picked up momentum and critical support following the 2003 General Assembly session.

During the session, VOP supported comprehensive tax reform that would bring equity and effectiveness to Virginia’s tax system. Senator Louise Lucas, D-Portsmouth, introduced a bill that would have implemented VOP’s tax reform agenda.

Although that bill was sent to a commission studying the tax system, it was praised by members of the Senate Finance Committee.

Legislators, finishing their second consecutive session dedicated to filling holes in Virginia’s budget, have come around to the proposition that Virginia must reform its unfair, inefficient and obsolete tax system in order to address its many fiscal problems.

Although they delayed tax reform until after the 2003 elections, legislators acknowledged the need for an overhaul of state finances.

The tax reform movement got a significant boost when Governor Mark Warner said after the session that tax reform would be the top priority in 2004.

Governor Warner made that statement in the context of his opposition to the legislature’s repeal of the estate tax. Governor Warner said that, taken alone, that repeal was “fiscally irresponsible” at a time when the state was dealing with budget deficits of more than $1 billion.

He said he could support reform of the estate tax in the context of comprehensive tax reform.

That is the same argument that VOP made during the session in arguing, unsuccessfully, against the estate tax repeal.

Governor Warner backed up his commitment to comprehensive tax reform by vetoing the estate tax repeal bill, a veto that VOP supported and which was upheld by the legislature on April 2.

VOP will lobby legislators to commit to real, common sense tax reform in 2004 that will make the tax system fair, adequate and modern.

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General Assembly fails to deal with many major issues

Movement to reform Virginia tax structure gains momentum