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Virginia Senate dices options on budget, none pretty

Rosalind Helderman

Senate Democrats are torn about whether to restore the $1.9 billion cut from the state budget by Gov. Tim Kaine to provide relief to taxpayers from their local car tax. If they don't restore the funding, it will likely mean localties will ask car owners to shoulder the full cost of their local car tax bills, resulting in a hefty tax increase.

But what might a budget look like that restores the money?

We understand Senate staff laid out some options for leading budget writers this afternoon , and no one thought they were pretty. To restore car tax relief--and abide by Gov. Bob McDonnell (R) and the House of Delegate's insistance that there not be a tax increase in the budget--staff said senators would have to cut $1.7 billion from the budget. (That means they found some additional revenues from what Gov. Tim Kaine recommended last month.)

And where would those cuts come from? More than $700 million cut over two years from K-12 education--on top of the more than $650 million already cut in Kaine's budget. More than $475 million from Health and Human Resources, on top of the almost $690 million cut by Kaine. And on and on and on.

At a Monday night Democratic caucus meeting, the arguments began to emerge: Some senators say that when they release the chamber's budget on Feb. 21 they should eliminate or dramatically scale back car tax relief. That way, they can offer a true alternative to the House and Governor and offer a Democratic point of view on governing and budgeting.

Others are opposed to essentially raising the car tax or argue that putting forward such a budget would be too politically painful, since it would result in Republicans and the governor charging the Democrats were pushing what would in essence be a big hike in the car tax, in the midst of a recession.

It's not yet clear how this will work out--some Democrats are already gloomily predicting a number of their caucus may vote against their chamber's budget.

By Rosalind Helderman  |  February 2, 2010; 6:27 PM ET
Categories:  General Assembly 2010 , Robert F. McDonnell , Rosalind Helderman , State Senate  
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Comments

I'm lost. Every year we spend $900,000,000 on car tax relief. That money comes off the top of the budget before we pay for anything else. By rescinding the tax relief that money stays in the budget; A .9 billion dollar savings. Making Virginians pay 100% of the relief brings in .9 billion dollars. Isn't this a 1.8 billion dollar increase in revenues?
And, please, it's not a tax increase. The tax has always been collected. Even on the backs of those who don't own personal property.
I always thought the tax relief was a sham. I've asked this before, but I'll ask it again: Name any governing entity that levies a tax on it's citizens and then pays that tax for them. Astounding.

Posted by: dpcret93 | February 3, 2010 10:24 AM | Report abuse

"If they don't restore the funding, it will likely mean localties will ask car owners to shoulder the full cost of their local car tax bills, resulting in a hefty tax increase."

or localities can cut costs at the local level and pay the tax out of already collected revenue.

Posted by: millionea7 | February 3, 2010 11:14 AM | Report abuse

"If they don't restore the funding, it will likely mean localties will ask car owners to shoulder the full cost of their local car tax bills, resulting in a hefty tax increase."
Gee, millionea7 imagine shouldering your own tax burden. Remember the tax is still being paid. Just not by us. The state, who levied the tax, now pays that tax for you to your locality. It's completely insane. We're not robbing Peter to pay Paul. We're robbing Peter to pay Peter. The revenue used to pay the tax relief comes from the general fund that great pile of money collected through the year through sales taxes and other means. All Virginians and anyone from out of stae who buys something here pays in. The personal proerty tax is for cars, motorcycles, motor homes, trailers and boats. If you don't own any of these you subsidize those who do by paying your income and sales taxes. What does the non-property owner get? A tax that they do not benifit from.
I am sick to tears being told we need to give tax breaks to various groups; small business, entreprenaeurs, tech companies, etc. How about we Virginians start paying the taxes we owe.
The only other solution is for Richmond to get out of the business of deciding how much money localities get every year and vote to give taxing authority to the counties and independent cities. I thought the conservative ideal is the smallest government, closest to the people decides what is best. Well, not here in the Commonwealth.

Posted by: dpcret93 | February 3, 2010 8:53 PM | Report abuse

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