Since the House of Delegates passed a compromise tax bill Tuesday, Virginia now has the opportunity to enact a two-year budget to ensure a fair tax system, fulfill existing state commitments and maintain Virginia's fiscal integrity, Gov. Mark R. Warner told University students yesterday.
Speaking to Prof. Larry J. Sabato's Introduction to American Politics class, Warner discussed the basics of Virginia's budget process, the history behind this year's impasse and prospects for a future deal.
Although he said the compromise bill would not provide enough revenue to meet Virginia's budget goals, Warner said the bill's passage was a "significant accomplishment" and urged the Senate and House, which have repeatedly clashed over the size of Virginia's budget, to work toward a budget compromise.
"We've got to keep this momentum going," Warner said.
Warner's original plan proposed increasing revenues by nearly $1 billion, largely by increasing the sales tax and adding a new top income tax bracket. The Senate later proposed a nearly $4 billion increase, with the extra taxes paying for education and transportation spending. The House initially did not support a tax increase but later proposed one of about $500 million by lifting tax exemptions on businesses.
The House bill passed Tuesday would have raised revenues close to the amount called for by Warner's plan, but a last minute amendment eliminated a recordation tax increase on homeowners buying a home. That lowered the increase by about $230 million, leaving the total increase at about $750 million.
Still, Warner praised the delegates who voted for the plan, which included 17 Republicans whose switch to support a compromise bill led to its passage.
"I think it was a major, major move," Warner said.
While discussing Virginia's spending on higher education, Warner praised the University and Virginia's other institutes of higher education.
"I think we have the best system of public higher education in America in Virginia," Warner said.
While talking with students after the class ended, Warner told one student he believed the issue of higher education would dominate next year's General Assembly session.
"Just as the budget was the big issue this year, I think higher education will be the big issue next year," Warner said.
Sabato opened the class by congratulating Warner on Tuesday's vote.
"When this whole thing started, it was considered a virtual impossibility that a Democratic governor could get anything approaching what the House passed yesterday to meet legitimate state needs," Sabato said.
Warner's visit followed that of Sen. George Allen, R-Virginia, who spoke to Sabato's class on Monday. Allen, according to Sabato, disagreed with Warner on the House bill.
"He was totally opposed to the tax increases," Sabato said.
The Senate Finance Committee met yesterday morning and deliberated on the House bill, but took no action.
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