Republicans urge Kaine not to pitch tax increases

By Michael Sluss
The Roanoke Times

RICHMOND

Republican legislative leaders have intensified their urging of Gov. Timothy M. Kaine to avoid proposing tax increases to help balance the state budget, saying, "It would put at risk the many positive steps we have advanced together over your term in office."

Kaine responded Friday by telling the GOP leaders that they fail "to grasp the stark realities of the coming budget."

The exchange came as Kaine prepares to deliver a revised spending plan for the remainder of the current fiscal year and a new two-year budget proposal to lawmakers next Friday. He has not ruled out taxes as part of a plan to close a budget shortfall that could approach $4 billion.

Lt. Gov. Bill Bolling, senior GOP lawmakers and House Appropriations Committee Chairman Lacey Putney, I-Bedford, sent Kaine a letter Thursday cautioning him against proposing tax increases. Gov.-elect Bob McDonnell said this week that he has made the same request.

"With Virginians already uneasy about their employment status and personal finances, they clearly have withdrawn from making major nondiscretionary purchases, " the Republican letter states. "So, it seems unfathomable to us that government might now extract from them involuntarily additional tax revenue."

The letter also was signed by House Speaker Bill Howell, R-Stafford County; Senate Minority Leader Thomas Norment, R-Williamsburg; and state Sen. William Wampler, R-Bristol, the ranking Republican on the Senate Finance Committee. McDonnell, a Republican, will get to propose changes to Kaine's plan after taking office Jan. 16, and has a solid GOP majority in the House to help him defeat tax increases. But the incoming governor and lawmakers might have to make deeper cuts to state programs than those Kaine will propose next week.

Kaine has said that protecting core state services and the state's bond rating will be his top priorities in building a budget. Kaine and lawmakers have reconciled nearly $7 billion in revenue shortfalls since 2007 without increasing taxes. But, Kaine wrote in a reply letter on Friday, the state is "far beyond the stage of eliminating inefficiencies or making merely difficult cuts."

Kaine has said he will consider a range of revenue options for the budget. Those include an increase in cigarette taxes, the elimination of a modest sales-tax break for retailers and a reduction in state payments to localities for car-tax relief. In his response to the letter, Kaine made no reference to tax increases but noted that "Virginia is operating a budget based on revenues that in 2012 will be the equivalent of revenues in 2006."

Bolling, Putney and GOP leaders said in their letter to Kaine that "it would be counterproductive at the very least" for Kaine to seek tax increases or "reductions to major tax relief programs."