State Delegate Kristen J. Amundson (D-44) and state Senator Linda "Toddy" Puller (D-36) held a town meeting to bring their constituents up to speed on what was going on in Richmond.
Since they've only been in session for three days, they only highlighted some of the bills that they were sponsoring. Among the legislation, Puller said that both she and Amundson were sponsoring bills to help keep Inova Mount Vernon Hospital in its current location and also to re-open Woodlawn Road to the public.
Puller also said that the main thing that they would be addressing during this term was the restructuring of the tax code. Governor Warner has presented a plan, as has Senator John J. Chichester (R-28), among others.
"This is going to be the focus of the entire session," said Puller.
After Amundson introduced and congratulated the winners of her annual art contest [see related story], they introduced Bill Murray, deputy director of public policy for Governor Mark Warner.
Murray said that when Governor Warner addressed the General Assembly, he talked about one thing — the budget and taxes. Unlike the national budget which can run a deficit, Virginia does not have that option. With limited money in the general fund budget, the governor and the members of the General Assembly have to figure out a way to make the money go farther.
"There are a lot of past promises and the bills are coming due," said Murray, explaining that the car tax, which was supposed to be fully repealed, is still at 30 percent. It was originally estimated that the car tax would cost Virginia $500 million; it's now estimated to cost over a billion.
"Before we move onto new cuts, we need to eliminate this first," he said.
MURRAY SAID that the real issue is whether or not to increase the sales tax. Because the food tax is regressive, it has been proposed that tax on food be reduced by 1.5 cents, and the overall sales tax be increased by 1 cent. Regarding other taxes, he believes that the cigarette tax will be increased and that the estate tax will be eliminated.
"Everyone agrees on that [increasing the cigarette tax] it's a matter of how much and whether or not counties can raise the taxes," said Murray. "There's pretty broad agreement on the estate tax, there's just different ways to do it."
The object of the tax code restructuring is to make it fairer for all taxpayers. There will be an increase at the high end and a decrease at the low end. A handout given at the meeting said that the three goals of Governor Warner's tax and budget reform plan are to make the tax system more fair; meet Virginia's Constitutional commitment to education; and protect the Commonwealth's fiscal integrity.
"Most people will pay less, but on the whole the state will raise more revenue," said Murray.
THE BOTTOM LINE is that the state is broke and needs to raise more money. This is the first time that Moody's, who has given Virginia a AAA bond rating since 1930, has put the state on credit watch. This tax reform plan aims to preserve the coveted bond rating.
Murray said that Warner is focusing on four main areas: K-12 education, health care, public safety and higher education. He said that the rising public safety costs are due to the growing prisoner population.
Because of the abolishment of parole among other things, the prison population has risen from 15,000 to 50,000 since the early 90's. Three new prisons need to be built; they will cost $80 million to build and $20 million to operate.
"Prisons are currently operating at 168 percent of capacity, as a result local jails which are built to hold 100 prisoners are sometimes holding as many as 400," said Murray.
Murray said that the governor would like to spend $775 million more on K-12 education and $144 million on higher education.
"The governor is concerned about keeping colleges strong," said Murray.
Murray talked about how Medicaid costs are expected to go up 8 percent; this will require an additional $800 million for health care needs. The groups most affected by this are the elderly and disabled, who need Medicaid coverage for nursing home care.
Delegate Mark D. Sickles (D-43) attended the meeting in Mount Vernon and held a similar meeting later that day with Puller and Murray in Franconia. Before he left Mount Vernon, Sickles said, "My overall issue is with tax reform and fairness, and how it will affect Fairfax County's reliance on the real estate tax."
Sickles thinks the local option on the cigarette tax is in big trouble, but feels that the General Assembly will increase the tax.