Saving a Sinking Ship

Saving a Sinking Ship

Budget problems disrupt legislators’ plans for General Assembly.

Last year, Robert Brink said the budget shortfall loomed over the General Assembly session like an “800-pound gorilla.”

This year, said the Democratic 48th District Delegate, the budget crisis was less “King Kong,” more “Titanic.” As Brink prepared for the 2003 Assembly session, he said solving the state’s fiscal problem is “more like trying to keep a ship from sinking.”

Arlington representatives to the state legislature returned to Richmond Wednesday, Jan. 8 for a six-week session, usually meant for making minor adjustments to the state’s budget. But lawmakers said this week that the projected $1.5 billion revenue shortfall has dramatically altered their plans and expectations, as well as their political strategies.

“I think there’s absolutely no doubt that the budget will just dominate everything,” said state Sen. Mary Margaret Whipple (D-31).

As Gov. Mark Warner (D) has reduced funding for virtually all state services except primary education, local jurisdictions have struggled to make up for lost state dollars. Creative budgeting and a booming real estate market have allowed Arlington to remain relatively unharmed by the state’s deficit. But Whipple said cities and counties around the commonwealth are “about at their limits.”

The result is serious constraints on legislators. “It makes it much more difficult to propose any legislation that would have any kind of price tag,” said Whipple.

Brink has all but abandoned hope for some of his most important projects. “Every year that I’ve been [in the legislature] I’ve worked on expanding the coverage of children’s health care,” he said. “You can’t make a better investment… but I don’t know that that’s going to be a possibility this year.”

Del. James Almand (D-47) said the budget crisis has altered his strategy for the upcoming session as well. “Things that cost money I’m not giving serious consideration to, because I think the chances of such legislation passing are slim to none,” he said.

“That’s not to say there won’t be plenty of other matters for the legislature to deal with,” he added.

GENERATING MONEY could constitute the bulk of those matters. “I think there will be a substantial effort to look for other revenue sources,” said Almand.

The cigarette tax and the regional gasoline tax will be the two most likely targets for increase. “It’s just common sense that we should look at increasing the cigarette tax,” said Brink.

Whipple will be leading the charge in the fight to raise Virginia’s cigarette tax, currently the lowest in the nation. Her bill calls for a 60-cent increase, which would bring Virginia’s tax up to the national average.

The cigarette tax has remained low partially in response to lobbying efforts of powerful Richmond-based tobacco companies. But with Virginia’s resources dwindling, the tax increase could have more support than ever before.

Extra revenue generated by such an increase is not earmarked for a particular purpose, such as education or health care, under Whipple’s proposal. But during the course of the Assembly session, the bill could see significant revisions. “It’s certainly important to point out what the revenue can do,” she said.

Del. Karen Darner (D-49) will also be calling for an increase in the sales tax on boats and planes.

SUPPORT AND SUCCESS, however, aren’t necessarily the same thing. With or without a budget deficit, voting for a tax hike is a political move many legislators are unwilling to make. “I certainly can’t predict success at this point,” said Whipple. “It’s difficult in an election year to get people to consider additional taxes.”

Almand said he too sees a political fight ahead for his own bill that would raise the regional gas tax from 2 to 4 percent. “I think it has a reasonable shot,” he said, “but I think anything that raises taxes has an uphill battle.”

Political strategy isn’t the only obstacle to raising taxes, Brink said. “There is a large segment of the [Assembly] members who won’t consider adjustment of revenues of any kind… and I think this flies in the face of the fact that we have essential services for vulnerable people,” he said. “That’s what government is all about.”

Brink said he will focus his efforts this session on making sure that efforts to solve the state’s financial crisis do not disrupt services for “vulnerable people” such as children, the elderly and the mentally ill.

EVEN FACING FISCAL crisis, the General Assembly will consider cutting some taxes. Almand said the legislature could split along party lines over a proposal to eliminate the estate tax.

The tax generates between $120 and $150 million per year, but many Republicans support cutting that source of funding. “Repealing the estate tax benefits maybe 1,000 wealthy families [in the state],” said Whipple.

Even without a budget shortfall, those numbers don’t add up, she said.

Legislators have promised cuts in the food sales tax for years but have not yet delivered. If legislators are looking for ways to provide tax relief to their constituents, they should look toward the food tax, which would affect all Virginians rather that just the wealthy.

“I think we should live up to a commitment we’ve already made,” said Whipple.