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Warner Throws Down the Gauntlet on Tax Referendum

Nearly 400 business, professional and political leaders were challenged Tuesday by Gov. Mark Warner (D) to "step up and do the right thing" when it comes to supporting the sales-tax referendum and two bond issues scheduled for the November ballot.

In addressing the state's budget crunch, Warner warned, "At some point we are going to have to decide that for this much money we get this many services. We got in this shape on the budget because we were told we can spend and cut taxes. We have believed too long that we don't have to pay for government services."

As the featured speaker at the Alexandria Chamber of Commerce's Governor's Luncheon, Warner gave a detailed assessment of the commonwealth's financial picture, including the ballot issues, to the luncheon audience, which packed the ballroom of the Hilton Alexandria Mark Center.

Acknowledging that "it has been a challenging eight months" since he took office, Warner stated that the original $3.8 billion shortfall was able to be closed through bipartisan cooperation. "But now we have another $1.5 billion hole to close. And it will actually be more than that because of expenses we cannot control," he insisted. "Plus, we have used every rabbit in the hat."

Warner attributed the remaining deficit to "corporate scandals and other factors that have caused growth and revenues to remain flat." He emphasized, "We are in unprecedented territory."

WARNER PREDICTED, "None of the choices are going to be easy. We have already ratcheted down discretionary spending. Three thousand government jobs have been cut, and there will be more. It will be painful, and it will take time."

But he also stated, "There will be a silver lining. This will give us a chance to find long-term savings. We have the diversity in our economy to do this."

Doing his own prioritizing, he outlined three critical issues he urged those in the room to support in the upcoming elections. Each will appear on the ballot for voter approval or rejection.

First was the $900 million higher-education bond package. "Every college and university in the commonwealth will benefit from this. It has been a decade since we made a major investment in higher education," he noted.

"Failure to pass this will seriously undermine the commonwealth's ability to compete. During the next decade we will add 32,000 students to the already 300,000-plus now in our colleges and universities," Warner specified.

The next issue on his must list was the $119 million bond issue for parks and open space. "The passage of this will guarantee 14,000 jobs and produce $1.5 billion in revenue." Virginia has great natural resources, he pointed out. But, "We need to do a much better job of the management of our parks and open space," Warner observed.

Third, he addressed the Sales Tax Referendum to fund transportation projects in Northern Virginia and the Tidewater area. "This is a chance for Northern Virginia to finally have a say over their transportation problems," he told the crowd.

"I'm very proud to support this effort. This will allow us to bond up to $5 billion for transportation projects. The law states that the money raised will stay in Northern Virginia and the Tidewater area for projects," Warner said.

HE THEN ASSURED the audience, "This will not affect the reduction in normal transportation funds to these regions." During the question-and-answer phase of his presentation, an audience member asked, "What would stop the General Assembly from cutting money to Northern Virginia if the sales-tax increase passes?"

Warner's answer was, "It is written into the law that the funds will stay here. They will not go through the General Assembly. They are not designed to mitigate the regular transportation funds."

He insisted that the transportation problems are "a crisis in all phases of our lives. We need a mix of transportation modes. Only 14 percent of all transportation funds now go to mass transit." He also saw the passage of the sales-tax increase as the "start to coordinate land-use planning and transportation planning."

Warner noted that if the referendum passes, the region will have the opportunity to select contractors other than VDOT to build the roads. "We think VDOT is equipped to build these roads. But there is the possibility to have others do so," he declared.

He further noted that 97 percent of all the highway projects being contemplated under the referendum are "already on the drawing board. I urge you to step up and be very supportive of the Sales Tax Referendum."

WARNER POINTED OUT that there is wide support among political leaders of both parties. He cited U.S. Rep. James Moran (D-8th) as being "way out front early in support." He also recognized U.S. Rep. Thomas M. Davis III (R-11th) and Virginia U.S. Sen. John W. Warner (R) as backers of the initiative.

Before the luncheon, the Chamber, which has come out in support of the Sales Tax Referendum, circulated bumper stickers and lapel patches advocating passage. These were placed on each table.

Warner did acknowledge that there was strong opposition. He said, "The opposition comes from two camps, those who want us to re-prioritize and the environmental community. Where do they want us to re-prioritize?"

This was followed by a question from the audience asking if there were "any chance of raising the tobacco tax in Virginia" to gain more revenue. Warner answered that "when we get down to how much money for what services, tobacco is one of the issues that will be on the table." He noted Virginia is one of the lowest tobacco-tax states in the nation.

During his introduction, Chamber president Huey Battle praised Warner's bipartisan approach to addressing the state's problems. He also noted it has been a very challenging time.

Before giving what he referred to as "his report of the last eight months and 13 days," Warner kicked off his presentation by stating, "I have the unique distinction of being the only governor to announce a drought and have a flood in the state at the same time."

In addition to the fiscal crisis, he said that during these initial months of his administration, he has faced the West Nile virus, a tornado, cases of malaria, and an attack of avian flu that destroyed a large quantity of fowl.