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Legislators Look Ahead

Tax Restructuring Anyone?

Local members of the Northern Virginia delegation predicted a spirited debate on the governor’s recently announced tax restructuring plan when the General Assembly gathers in Richmond early next year.

The annual end-of-the-year breakfast panel discussion, sponsored by the Greater Reston Chamber of Commerce, is a chance for local, state and federal representatives to forecast the year ahead in Richmond. The assembled local politicians made forecasts about the coming General Assembly session and weighed in on Gov. Mark Warner’s (D) tax restructuring package and budget at Morton’s Steakhouse in Reston Town Center.

U.S. Rep. Jim Moran (D-8th) wasted no time in breaking down the issue that, he said, would dominate the political landscape on all issues from transportation to education. Hint: it’s green. “Money, money, money. That is really the problem,” Moran said. “We in Northern Virginia clearly need to invest more money in transportation and education, but the real issue is how we are going to raise that revenue in an efficient, and sufficient, manner.”

Moran said he supports Warner’s package, which the governor unveiled earlier this month, saying he believed that it would actually “help Northern Virginia more than other regions of the state.”

LIKE MORAN, the mostly Democratic panel stood behind their governor’s tax restructuring proposals. State Sen. Janet Howell (D-32) predicted that the upcoming “long session” would be dedicated to issues of tax restructuring, tax relief and revenue enhancement and would be “fascinating” to watch. “This is the year it is finally going to happen,” Howell said, of the state’s long-overdue look at its financing structure. “Hopefully, we are committed to do something.”

Howell, who strongly supports Warner’s plan, reminded the audience that over the last few years the General Assembly has slashed $6 billion out of its $12 billion general fund, cut 5,000 state employees from the payroll and eliminated nearly 50 state agencies.

“We can’t keep going like this,” Howell, a minority member of the senate Finance Committee, “We are starting to make Mississippi look good ... We have to have increased revenue.”

Howell said that despite representing the wealthiest district in the state, a district that includes Reston, Great Falls and McLean, her constituents have been telling her that they are supportive of Warner’s proposals. “My mail has been running two-to-one in favor the governor’s plan,” Howell said.

Looking at the Richmond tea leaves, Howell said she felt confident that both sides of the Republican-controlled state Senate were committed to tackling the issue, but she warned that the more conservative House of Delegates, which she says is “splintered,” could derail any bipartisan work done in the Senate which she said was “overwhelmingly unified on a bipartisan basis.”

Howell’s colleague in Richmond, Del. Ken Plum (D-36), also worried about the coming term in the lower house. “As I see it, the three big issues in the General Assembly will be taxes, spending and outlawing gay and lesbian marriages,” Plum said. “I say that in all honesty.”

Plum said he anticipated Republican lawmakers in the House to try and “divert attention to their extreme social agenda.” During last year's "short" session, nearly 30 abortion-related bills were introduced and Plum expects more of the same this go-around. “They say they are preserving our moral fabric,” Plum said, adding the bills did nothing but distract from more important business at hand. “This is the long session but we may very well have an extra long session on our hands.”

Saying that Richmond has to revise the tax code, Plum said he intended to introduce a gas tax that would, at the very least, raise the state’s gas tax up to inflation. “We are seven cents below our neighbors in Maryland and North Carolina,” he told the crowd.

NOT EVERYONE ON THE DAIS, however, embraced the governor’s package. Recently retired Supervisor Stuart Mendelsohn (R-Dranesville), the only elected Republican speaker at the breakfast, said he was not ready to sign off on Warner’s proposals. “Some things I like, some I don’t. It’s not optimal,” he said. “It’s not true tax restructuring, it’s more like rearranging.”

Mendelsohn, a Reston lawyer, tried to dampen the audience’s expectations for major landmark reform. “It’s an uphill climb,” he said. “I doubt we will see revolutionary change in Richmond, more likely to be spinning in circles.”

Like Howell, the former-Dranesville supervisor oversaw an extremely wealthy district, but Mendelsohn didn’t sound as nearly as confident as Howell in assessing his constituent’s opinions of the possible tax restructuring packages. Mendelsohn warned the sentiment that doomed last year’s transportation tax referendum had not subsided. “Two thirds of my constituents will pay more,” he said. “We’ve had five years of double digit property tax increases in the Dranesville district. We simply have to address issues of fairness. We can’t just keep sending our money down to Richmond saying: Trust us.”

While many of his fellow legislators listed items and programs that needed to be funded, Mendelsohn tried another approach. “I keep hearing about all these things that we all want to do, if only we could afford them,” he said. “The fact is we can’t do everything. At some point instead of funding everything minimally, we should support fewer things more fully. We have to recognize that government just cannot do everything.”

Mendelsohn’s former colleague on the Board of Supervisors, Cathy Hudgins (D-Hunter Mill), used the Dec. 16 discussion to lobby the Richmond legislators about the tax restructuring debate, requesting an end to caps that, she said, strains the county’s taxing authority. “Whatever they do, it happens here,” she said, pointing to Howell and Plum. “It’s becoming harder to face constituents who keep finding their already high property tax rates getting higher. Any tax restructuring should give [Fairfax County] broader authority,” Hudgins said. “We desperately need diversification of our revenue source in Fairfax County. The state needs to provide the county the same taxing authority as cities and towns.”