No Shortage of Ideas

No Shortage of Ideas

There is hope: tax restructuring might be possible in 2004.

As the Connection proceeds through candidate interviews, most candidates are upbeat about the possibility of real tax reform in the coming year.

There are a contingent of "no tax" senators and delegates who intend to demand a tax reduction for any possible new source of revenue.

But even the Republicans who know they must espouse the "revenue neutral" mantra are interested in diversifying and broadening sources of revenue to help protect homeowners from escalating property taxes and services from depleted funding.

Among the ideas, one of the simplest fixes involves allowing counties the same array of taxes that cities are allowed, including meals tax, hotel tax and additional cigarette taxes.

"We have to be allowed to provide urban services with funding from urban sources," said Del. Vivian Watts (D-39th).

While senate candidate Dave Hunt (R) indicated that he believes there is still significant waste in state government, he is also open to new revenue ideas, including a possible tax on internet sales. (We have not yet spoken to Hunt’s opponent, state Sen. Janet Howell (D-32nd).)

Raising the cigarette tax seems in the realm of possibilities among Northern Virginia legislators. Del. Gary Reese (R-67th)suggests dedicating the increase in cigarette taxes to providing more local funding for schools, specifically to fund the Standards of Quality.

Many legislators and candidates said that even if the initial formula for tax restructuring was "revenue neutral," it could position the state to capture future growth, for example moving to tax services in addition to goods.

Adjusting the brackets upward for income taxes appealed to many people, including Del. Jeannemarie Devolites (R-35th), now running for an open senate seat. Devolites points out that the current brackets max out at $17,000, which is half the poverty level for a family of four in Northern Virginia.

Others, like Del. Chap Petersen (D-37th), are wary of the change in income tax brackets, warning that such a change might well suck even more revenues out of Northern Virginia and transfer them to the rest of the state.

While there appears to be little agreement on the details at this point, most candidates are at least prepared to admit that they must grapple with the tax structure in a substantial way this term. It’ll be a long time before another such opportunity.