RICHMOND
Virginia's cigarette tax would be doubled, education spending cut and 1,500 state jobs axed under a plan Gov. Timothy M. Kaine will introduce this morning to balance the recession-racked state budget.
The governor also will ask legislators to freeze admissions into the state's Medicaid program, which provides health services for more than 810,000 low-income Virginians.
Kaine outlined the proposals during a Tuesday morning conference call with Democratic state lawmakers. Five legislators who participated in the call relayed information under the condition they not be identified.
Kaine, a Democrat, is slated to formally present his plan today in a 9:30 a.m. speech to the General Assembly's money committees. He told legislators Tuesday that the state faces a $2.9 billion shortfall in revenues needed to balance the state's two-year, $76 billion budget. About 18 months remain in the budget period.
The governor, according to the sources, will propose the following steps:
- Doubling the state's 30-cents-a-pack cigarette tax to produce an additional $150 million a year. The levy, at its current rate, is the third-lowest in the nation.
- Cutting $400 million from public schools, which had been budgeted to receive $5.7 billion in tax money this year.
- Diverting $80 million of lottery profits earmarked for public school construction to other programs.
- Borrowing $400 million for construction projects that were slated to be paid for out of cash.
- Carving 15 percent from state funding for state colleges and universities and 10 percent from its funding of community colleges. The figures include reductions of 5 to 7 percent at schools that Kaine ordered in October.
- Allowing some nonviolent felons to be released from prison up to three months early to reduce incarceration costs.
- Withdrawing $500 million from the state's $1.1 billion rainy-day fund.
- Eliminating about 1,500 state government jobs - 1,100 though layoffs that began last fall and 400 through attrition. Virginia's government, with a full-time payroll of about 100,000, has been in a hiring freeze since October.
- Slicing $400 million from health care programs, including Medicare. Kaine would restore $150 million of the money with proceeds from the cigarette tax increase, should the legislature approve the increase.
To help offset rising tuition costs, Kaine will seek an additional $25 million in financial aid for students attending public colleges and universities.
The proposed cigarette tax boost drew immediate opposition from Republican leaders, who predicted it would force layoffs in Virginia's tobacco industry. The tax proposal also was condemned by a spokesman for Altria Group Inc., the Richmond-based parent company of Philip Morris USA, the world's largest cigarette producer.
House Speaker William Howell, R-Stafford, noted that Philip Morris employs 5,500 Virginians. "These are all good-paying jobs," he said. "The average person has been working at Philip Morris for over 15 years, and we're just going to decimate some of these jobs."
Howell and U.S. Rep. Eric Cantor, a Republican whose Richmond-area district is home to Philip Morris facilities and employees, said the cigarette giant has invested more than $1 billion in the Richmond area since 2004 in modernizing its production plant, relocating the corporate headquarters for Altria and Philip Morris to the region, and building a research and technology center.
Bill Phelps, a spokesman for Altria, said it is "unfair to single out a single industry" for a tax increase. He predicted that the levy, if approved, would cause many Virginians to buy cigarettes in the neighboring states of North Carolina, Kentucky and West Virginia, where the levy would be smaller.
Gordon Hickey, a spokesman for Kaine, declined to comment on the governor's proposals. Kaine said in August that he would not seek tax increases to solve the state's budget woes.
"I think the most troubling part would be freezing access to the Medicaid program," said Michael Cassidy, executive director of the Commonwealth Institute, a fiscal-policy think tank.
"It's a safety-net program whose demand increases at times when the economy worsens," he said. "So for us to shut the barn doors on people at the very time they need this program would be a very troubling development."
Kaine's cigarette tax plan drew tepid support from the American Cancer Society, which favors quadrupling the current levy, raising it by 90 cents to $1.20 a pack, to discourage smoking.
"We're missing an opportunity to save more lives and reduce health care costs," said Keenan A. Caldwell, Virginia government relations director for the society.
Warren Fiske, (804) 697-1565, warren.fiske@pilotonline.com
Julian Walker, (804) 697-1564, julian.walker@pilotonline.com
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Vote Republican
Kaine and the democraps are ruining Virginia's economy. More excuses for tax and spend. Vote Republican in November and get these wacko liberal clowns out of office. Change is coming soon Virginia.
tax, tax and more tax...
Cigarette tax...fine, whatever, but someone with a modicum of intelligence should realize that there are three (3) items currently taxed that should NOT be taxed. The first is Food, secondly is prescription drugs and last is clothing. They are all necessities. We have to eat, some people need their (legal) drugs and lastly we simply can't go about naked. Taxing these items is wrong. Government says it wants people to have more money...fine, stop taxing those three (3) items and we will have more money!
No one is going to be happy
It doesn't matter what the governor does, he's going to be unpopular. The current recession has a lot of different reasons, but the bottom line is, the state is coming up short of money and needs to make up for that shortfall. If people's crystal balls could have predicted the recession was going to happen, something could have been done about it.
Adding more tax to tobacco products is a great idea, and if it raises more revenue and gets a few more people to stop smoking, all the better. Smoking harms not only the people doing it, but those around them that have to breath their smoke. It also adds to our state healthcare costs. Raising the tax on alcohol is another place he could go for more revenue. As for the cuts, it looks like he's doing those across the board. Any time cuts have to be made, someone's balliwick gets hurt.
nice try
Mr. Twine, perhaps you missed the part about the Democrats taking control of Congress in 2006. There's plenty of blame to go around for the current mess. Google 'Barney Frank' and 'Chris Dodd' for a start.
The Dems have the whole shooting match now. They and folks like you will have no one else to blame for the next couple of years. Good luck, for all of us.
Kaine didn't create this mess
Governor Kaine didn't dig the hole we are in. Right wing republicans who thought they could put tax cuts for the wealthy and bush's personal war on a credit card created this mess.
And I'm not the only one who believes the GOP can't be trusted to run country:
http://voices.washingtonpost.com/behind-the-numbers/?hpid=news-col-blog
It's time to clean out the republican-run General Assembly, not the governor's office.
You Kain KoolAid drinkers still...
haven't asnwered why there is $1,100,000,000 tax payer dollars sitting in a "rainy day fund"! What would the Repulicans have done? They would have put it back in the pockets of the people who earned the wages those taxes were taken from. It doesn't matter that we are "one of the lowest taxed states in the country" that is like comparing apples to oranges. We used to have a $500,000,000 "surplus" that disappeared on Kaines watch. That is a total of $1,600,000,000 gone under Kaines "leadership". Is it ALL his fault? Of course not but he shouldn't be holding that kind of money in the state coffers when it could be in the pockets of us citizens for bills, Christmas gifts and savings accounts!
Even better Idea
Just add a 2% increase across the board so the wealthy don't make out like bandits. It's bad enough the gov is giving tax rebates to people buying cars. Dealerships are some the shadiest vendors I can think of.
Calendar tax
All residents of Virginia will pay a calendar tax. Every one will pay $1 a day for all of 2009. This will generate over $2.8 billion. If we start today, we will have $2.9 billion by the end of 2009.
Problem solved.
Stop the Unions
We all know that there are a number of money sucking programs in or schools that need to go along with a number of lazy/worthless teachers in or schools. The problem is like the auto workers thier union has become so strong you will never be able to fire any of them or cut thier pet programs, they would rather see the schools fail then take any cuts just like the auto workers and the manufacturer. Educators try turning our attention to the politicians trying to save thier jobs and our schools by forcing some cuts, saying look what they will be doing to your children if they do this they won't get a good education they will never succeed. Bulls**t Parents do your part help your children at night with there school work volunteer at your childs school 3 time a month and if every parent did that, cost would go down and your children will get a better education at a lower cost. Like you did and guess what you might just learn something about your child. Stop whining and save the schools we all must cut back in these times the grass is not greener anywhere else.
cut the cop
Start with the retired state police officer who logged 700 miles and charged the city to see if the VB Police killed in the line of duty family was able to collect benefits.... Then we can give him a bailout.
How?
"Don't wish on others a burden that you're unwilling to accept yourself. It will come back to you eventually." I do pay sin taxes every time I buy alcohol, so I do "accept" an additional, unnecessary tax burden. It's my choice. I fail to see how NOT smoking will "come back to me." In any event, if an additional tax on cigarettes leads people to quit smoking this will lead to a reduction in health care costs, which is win for all of us.
I admit the cost of cigarettes isn't why I don't smoke. It's because I never suffered from the insecurity of feeling the need to look cool when I was younger.
Gilmore is Back
I thought that Democrats were supposed to be for more funding for education and health care. Oh, Gov. Gilmore, I mean Gov. Kaine is running the state...right into the grave. Instead of getting rid off wasteful spending programs, He wants our kids to be dumb and sick. I didn't see anything about the Gov slashing his staff or budget. Lord will it be good to elect a new governor this year. Put the new one is going to be in the same shoes our new president will be in. Pulling us out of a hole!!!
A real answer
Tax each political reprensetative for each syllable he/she utters. That will solve any money shortage and maybe if some of them were to just shut-up we'd see a decrease in the carbon output in Virignia.
Sore Losers
Here we go again with the loosing party out in force to tarnish Gov. Kaine. He may not be the best governor but he's hell sure better than your darling Gilmore and any Republican candidates you so lavished for. You must also have forgotten what the useless do-nothing Republican party did in the past eight years. You give them the country and they destroyed it in a year. Spare the useless comments and blame your party for this disaster. As for you folk who used to like Kaine because of health care and education. Ask yourselves what would the Republican party do? Opps, go back 8 long years and the proof is in your face. How pathetic.
Flawed logic being posted
2cents – your logic is somewhat flawed. Food doesn’t necessarily make people fat. It’s the excess of food and lack of exercise. Look at Michael Phelps’ breakfast while in training: — 3 fried egg sandwiches w/cheese, lettuce, tomatoes, fried onions, and mayo; one 5-egg omelette; grits; three slices of French toast with powdered sugar, and 3 chocolate chip pancake – all totalling over 12,000 calories (federal guidelines recommend 2,000 PER DAY!).
Cigarettes - no matter the quantity or a person’s exercise routine – are harmful. Period. It’s even been proven they’re harmful as second-hand smoke. “Fat” people don’t cause others physical harm.
Don’t like the tax – quit smoking. You’ll live longer and have more time to criticize others.
Sin taxes are great
Sin taxes are great until the offending behavior is curtailed, then who makes up for that lost revenue?
Don't wish on others a burden that you're unwilling to accept yourself. It will come back to you eventually.
State Revenue Shortfall
Virginia is facing the same issues as every other state in the country. Keep in mind that Virginia citizens have benefited over the years by living in a state with one of the lowest tax structures in the country. Despite the GOP naysayers, Virginia is indeed one of the least taxed states. Given the historical resistance to tax increases, it is time to make the painful choices necessary to balance the budget. I do agree that during an economic downturn, now is not the time to increase general taxes such as income or sales. However, it is appropriate to tax selected areas such as cigarettes and gasoline. Is this a regressive tax? Yes, but those opposed should come up with alternatives. In the absence of additional revenue, reductions must be made to expenses, programs delayed or cancelled, etc. Everything, including education must be put on the table for consideration. Avoid the temptation to focus on sacred cows, step back and take a holistic look at the services provided via the state budget.
Wrong Tax
Tax the fat people. There are so few smokers left that it is now time to tax all the pudge-OHs of the Commonwealth. $6.00 for a bag of potato chips, $14 dollars for a dozen donuts, $36 dollars for that pint of Ben & Jerry's. Say good-bye to those mega-calorie gormet ice cream stores -- $50.00 per screaming little urchin sized cone.
No surprise here....
Just the latest in a million positions repeatedly taken by federal, state and local governments - they have unlimited access to your assets, and when they think they should have more, they take it. As always, the mantra is "we have to make cuts..." such cuts always presented as their most (and only) critical activities ....education, medical, police, fire....never the frivolous expenditures and outrageous perks of their empire.
The public, in a simple majority of the voters, succumb to the fraud, reelect the parasites, and suffer to the benefit of the elected rulers.
If the public ever wakes up (unlikely) the rulers can be replaced by legitimate office holders. In the mean time, the fraud will continue, meager wages will continue to be confiscated and the rulers will be reelected by making empty promises of handing out financial crumbs.
The voters put these people into office, and are solely responsible for the ongoing fraud.
In this case, the mantra is cigarette taxes........why cigarette taxes and not higher taxes on booze? Because there are more drunks than smokers in Virginia government.
Why not triple the tax rate on alcohol while your at it?
Not being sarcastic, serious as Bush being a puppet for big oil. It causes more problems than pleasure. Also, target country club and golf sin tax, which is where people with BIG money waste $100's dollars/day. Then, tax all who make over $100,000.. to bad most politicians make $100k or more so that wont fly to well.