The Virginia Budget — the Good, the Bad and the Ugly

The Virginia General Assembly finally wound up its 2006 session by passing the biennium budget. Unlike the tilt in 2004, the public interest seemed more muted and the rhetoric (both regional and partisan) was less inflammatory. Curiously, the long-running delay seemed less painful to the representatives than it did in 2004. Maybe it’s because they all kept taking the state per diems, unlike the large group of us in 2004 that fore swore that. Anyway, let’s look at the end product:

The Good: My favorite item had nothing to do with increased spending or tax breaks (more on that later). It actually had to do with a key reform which was started in 2002 by then-Delegate Preston Bryant. Preston formed a task force which looked at reforming taxes on telecommunications — phone, cable, cell, satellite, etc. — by imposing a uniform levy on all bills regardless of the underlying technology. After two years of study, the measure finally passed and became law this year, with Richmond holding the localities harmless while the new system is implemented. Not only will the new law “level the playing field” for the phone and cable industries, it should also substantially cut the taxes on homeowners who use land lines and have standard cable service. That’s good work.

The Bad: Again, the House and Senate fail to reach an accord on transportation. The real problem, in my opinion, is the lack of vision. Every year, the transportation proposals in Richmond are driven by lobbyists for highway contractors, developers and other big businesses. There is little or no grass-roots involvement. (When it’s attempted, it usually a flop). Why? Because the proposals always focus on spending money. There is no focus on actually changing how Virginians commute or travel distances. Good ideas like the “Roads to Rails” initiative along the Rte. 81 corridor are routinely ignored. There is no meaningful legislation to tie transportation funding to land use that revitalizes urban areas and preserves the rural crescent. So the results are frustration all around.

The Ugly: Here we go again with the estate tax sham. The 2006 bill takes $124M and distributes it to our wealthiest families through a repeal of the tax on multi-million dollar inheritances. Which means that Paris Hilton can inherit $100 million in Virginia and pay no taxes, while suckers like you will pay tax on your earned income. Repealing the Paris Hilton Tax: So Not Hot. Ethically, this is a joke. Is it politically popular? Three years ago I denounced the estate tax repeal as a lobbyist-driven fraud and was re-elected easily in a “race to watch.” Mark Warner vetoed the same bill and rose to 75% popularity. Yet dozens of Delegates and Senators continue to pander after a “pro business” rating — given by the lamentably named Virginia FREE — by approving a bill so anti-democratic that it’s embarrassing to even discuss the details in public. And that’s just the Democrats! A firm veto of this boondoggle will help Governor Kaine end his first session on a populist note.

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