The Virginia General Assembly remains deadlocked over the issue of how to fund transportation in a Special Session that is now entering its second month. The House of Delegates remains committed to avoiding increases in taxes and has advanced a budget that dedicates an increase of over $1 billion to transportation over the next two years. The Senate remains committed to various tax programs that will result in about $2 billion in additional transportation spending over the next two years.

Various tax increases under consideration include taxes on home sales, taxes on the purchase of automobiles, and changes in the taxation structure for gasoline.

While the House and Senate are in disagreement over the methods of funding transportation, both the House of Delegates and Senate of Virginia have passed new budgets that include versions of repeal of the death tax.

The House budget contemplates FULL repeal of the death tax on January 1, 2007. This is the same plan that passed legislatively in the regular session of the General Assembly.

The Senate budget contemplates PARTIAL repeal of the death tax for some families and businesses, but not all. Virginians for Death Tax Repeal has been educating members of both parties and both chambers of the problems with this version that will leave many unprotected and liable for the tax that threatens so many businesses. Many think that passing partial repeal is worse than passing nothing at all.

Full repeal of the death tax will provide $120 million a year in tax relief. Partial repeal will range from $60 million to $115 million per year in tax relief, but will continue to burden family farmers and business owners because of the peculiar and unstable nature of the Senate partial repeal plan.

Please take the time to re-connect with your legislators in the coming week to let them know you support full and honest repeal of the death tax on January 1, 2007.

Last month we reported to you that the state budget was growing faster than expected, meaning that the state is collecting more tax dollars than it previously needed and budgeted. Last month, General Fund Tax revenues were growing at about 10.5 percent.

The new numbers released in mid-April tell a similar story: state tax collections are growing at a phenomenal pace. In fact:

General Fund tax collections in Virginia grew by 10.5 percent over the same time last year. Combined General Fund taxes and Lottery proceeds have increased by $1.013 BILLION from last year at the same time.

Full repeal of the death tax on January 1, 2007, will reduce the budget by less than 1/10th of a billion dollars in 2007-08. The state budget for 2007-08 is slated to be upwards of $75 BILLION.

Income tax collections are almost ten percent higher than the same time a year ago. The state collected over $540 MILLION more in income taxes through March 2006 than it did through March 2005.

Corporate income taxes are almost 75 percent higher than the same time a year ago. The state has collected over $250 MILLION more in corporate income taxes than the same time a year ago.

Lottery profits continue to soar. Despite projections that the Lottery would collect almost the same amount this year that it did last, people continue to buy tickets at a record pace. In fact the Lottery has generated over $40 million more than they did through the same time a year ago.

Some at the capitol are predicting that Virginia will realize over $200 million in surpluses from when the budget was submitted in December 2005. These originally un-projected revenues exceed the fiscal impact of repealing the death tax.

With these added revenues we are hopeful that the General Assembly and Governor can find a way to repeal the death tax completely on January 1, 2007. Despite differences on the means of funding transportation improvements, the increasing tax collections make it difficult to justify not repealing the full death tax during the extended General Assembly session.

Please be in touch with your legislators to let them know you support full repeal of the death tax.

The entire General Assembly rarely meets in this special session. That saves tax-payers money but also allows those who are working on budget negotiations to be the ones focused on the eventual outcome. Eleven legislators have been appointed by the House and Senate to debate differences in the House and Senate budgets. This includes discussions about repeal of the death tax.

On the House side, House Appropriations Committee Chairman Vince Callahan (R-Fairfax) leads the House budget conferees. Other House conferees are Delegates Lacey Putney (I-Bedford), Phil Hamilton (R-Newport News), Johnny Joannau (D-Portsmouth), Kirk Cox (R-Colonial Heights) and Leo Wardrup (R-Virginia Beach). Speaker of the House Bill Howell (R-Stafford) also is a key player, and Delegates Bob Tata (R-Virginia Beach) and Lee Ware (R-Powhatan) also are key players in working to repeal the death tax.

All House conferees in the past have supported FULL repeal of the death tax, and have voted this year consistently to repeal the full death tax on January 1, 2007.

On the Senate side, Senate Finance Chairman John Chichester (R-Northumberland) leads the Senate conferees. Senate conferees include Senators Chuck Colgan (D-Prince William), Senator Walter Stosch (R-Henrico), Senator William Wampler (R-Bristol) and Senator Edd Houck (D-Spotsylvania). Senators Tommy Norment, John Watkins and Emmett Hanger have also been working to find solutions to repeal the tax. Unfortunately, all of them voted this year for partial repeal and against full repeal of the death tax.

You can send an email to all eleven conferees by clicking here.

All of the Senate conferees last voted for full repeal of the death tax in 2003, even going so far as voting to overturn Mark Warner's veto of death tax repeal. This was when the state was in a much more difficult financial situation and before the legislature voted to raise taxes in 2004.

The General Assembly is slated to have various meetings this week on budget matters. Some are predicting, however, that a budget deal is unlikely before the next revenue report to the General Assembly by the Secretary of Finance. That will take place some time in mid-May. We will begin to send you more frequent reports on happenings at the General Assembly as negotiations between lawmakers occur with greater frequency.

Please give us your thoughts on the budget debate, efforts to repeal the death tax and even our newsletter.

Also, let us know if your legislator writes you back about repealing the death tax.

Or if you want to help more on efforts to repeal the tax but don't know how, let us know.
Email our newsletter editor Melanie Paulos at mpaulos@mwcllc.com. She will route your questions to the appropriate resource on our team. Thanks for your continued support of efforts to repeal Virginia's onerous death tax.