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Del. Vince Callahan, R-McLean, is the head of the
appropriations committee. He is also the leader of
the House delegates conferring with their Senate
counterparts in an attempt to bridge the differences
in the two budgets approved by the House and the
Senate.
After meeting with the conferees for the first time,
Callahan said: "While our respective budgets
may appear to be worlds apart, I believe that both
budgets share many common elements … I truly
believe that we can accommodate each chamber's
concerns."
This is a truly incredible statement considering that the
Budget approved by the House proposes to raise about
$500 million in new revenues, while the Senate’s
budget will increase taxes by close to $4.0 billion.
Can the conferees really accommodate a $3.5 billion
difference?
The House of Delegates had no strategic plan to counter the
tax increase proposed by Governor Mark R. Warner —
the largest tax increase in the history of Virginia.
Warner wants to raise $1.0 billion, a 13 percent
spending increase, in new taxes under the guise of
“tax reform."
Then the state Senate significantly raised the ante. Sen.
John H. Chichester, R-Stafford, the chairman of the
Senate Finance Committee, proposed raising taxes to
the tune of about $4.0 billion -- an 18 percent
spending increase.
Lost in this debate is the fact that the budget is
projected to grow by 11 percent — without any tax
increases. No one has explained why it is necessary
to grow state spending at more than double the
growth in personal incomes.
The House initially rejected the governor’s budget,
because it was based on anticipated revenues from
new taxes. That action gave hope to the anti-tax
contingent that the House would hold the line
against taxes increases.
But the House leadership did not have a cohesive message or
a clear strategy for holding the line on taxes. On
the contrary, a number of conflicting and confusing
messages have been attributed to the House
leadership.
For example, the Speaker of the House, William Howell,
R-Stafford, has been touting that the House would
hold the line on new taxes. At the same time, he has
been saying that raising certain taxes, like
gasoline and cigarette taxes, would be acceptable.
This week, he even conceded that doing away with certain
exemptions for seniors turning 65 in future years
would also be acceptable. It’s fair to say that
Howell has hedged his bets by covering both ends of
the spectrum.
In an obviously desperate act, the House voted in favor of
a bill introduced by Del. Hamilton, R-Newport News.
Hamilton’s
bill proposed to do away with tax breaks for certain
businesses.
The House estimated that Hamilton’s
plan would raise more than $500 million in new
government revenues. And with little discussion or
debate Hamilton’s
bill was passed by the House.
A number of delegates voted for this bill because they
thought they would be teaching a lesson to certain
business concerns that had been promoting tax
increases to be borne by the taxpayers. However, the
House vote allowed Warner to claim that even the
House now agreed with him about increasing
government spending.
A basic tenet of negotiation strategy is to never concede a
point unless you get some concessions in return.
Astonishingly, the House moved from a position of no
taxes to meeting Warner’s tax-increase proposals
half-way and got nothing in return for their
complete capitulation.
With no specific plan to counter the Warner and
Chichester
tax-increase proposals, the House has provided its
conferees with no clear direction. The Senate
conference team is headed by Chichester
who firmly believes in turning our fiscally
conservative state into a socialized democracy where
services are provided from cradle to grave.
On the House side, Callahan is no champion of the anti-tax
cause. On the contrary, Callahan has repeatedly
sided with big businesses advocating tax increases
on working families and was a steadfast supporter of
the sales tax referendum that was soundly defeated
by the voters two years ago.
In this session Callahan patroned HB 1005, which would
authorize the issuance of $145 million in bonds for
funding transportation improvements in the Dulles
corridor, to be repaid by increasing the tolls on
the Dulles Toll road.
In short, how badly your pocketbooks are hit by the rush
for new taxes remains to be seen. Nonetheless, a
last line of defense that rests with Callahan is not
very reassuring.
The only hope is that Chichester
wants
to go down in history as single-handedly raising
state spending by more than 18 percent. Chichester’s
obstinacy may be the only saving grace for the
taxpayers, since it may lead to a conference
deadlock.
At this point, what happens next is anyone’s guess. But
one thing is certain: Government spending — read
tax increases — will grow. The only question is by
how much.
--
March 15, 2004
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