General Assembly Update from Delegate Mark Cole

General Assembly Update
Delegate Mark Cole

This is to keep you up-to-date on what is going on in the Virginia General Assembly and state government.

In this update:

- Budget Compromise Approved
- Governor's Budget Amendments
- Estate Tax Repeal Sent to Governor

BUDGET COMPROMISE

A compromise budget was adopted and signed by the
Governor last week. The budget significantly
increases spending in all areas and does not include any tax increases.

Tax revenues have been exceeding projections most of the past year leading to a budget surplus of nearly $1.5 Billion. Despite this surplus the Senate and the Governor had demanded a $ 1 Billion tax increase.

They held up adoption of the budget in order to try to pressure the House of Delegates to go along with their tax increase proposals. In the end they were unsuccessful.

The budget does include money to begin phasing in the "Cost of Competing" for Stafford, Spotsylvania,Fauquier, and Fredericksburg. Cost of Competing is additional money the state allocates to high cost localities in order to supplement teacher pay.

Northern Virginia had been receiving the supplement for many years, but our localities were not despite the fact that our area was catching up to Northern Virginia as far as the cost of living was concerned.

This put our schools at a disadvantage when it came of hiring and retaining teachers.

Localities like Prince William were able to offer better salaries because of the state supplement. This should help level the playing field for our schools.

The major disappointment I have with this budget is in transportation funding. The House had proposed more than $ 1 Billion in additional funds for transportation. The Senate only wanted to spend more on transportation if taxes were increased. They refused to consider the House plan. As a consequence, the final budget increases transportation funding by about half of what the House proposed. This is not an insignificant amount, but still far less than what the House proposed.

We are supposed to continue meeting to discuss
transportation initiatives.

GOVERNOR'S BUDGET AMENDMENTS

After we passed the compromise budget, the Governor made more than 30 amendments to the budget. About half of those were language amendments and technical corrections that did not have a financial impact.

Most of those were approved by the General Assembly.

The Governor "found" about $ 29 million in new revenue after we had passed the compromise budget. He proposed amendments to spend this new money on a variety of programs, none of which dealt with our most urgent problem - transportation. We approved a few of
the spending amendments for critical programs, such as the Office of Emergency Management. However, the House voted down most of the amendments in order to have more money available for the upcoming transportation discussions.

ESTATE TAX REPEAL

As part of the budget compromise, a bill to phase out the estate tax (or death tax) was passed. At the insistence of the Senate the bill was tied to placing a cap on the amount of tax credits available for land conservation easements.

The estate tax is a real burden on family farms and businesses. It is not unusual for farms and small businesses to have to be sold in order to pay the tax. Many other states are in the process of eliminating their estate tax; Virginia needed to do the same in order to be able to compete for new jobs and businesses.

The Virginia estate tax should be phased out in July of 2007.