To avoid state crisis, senate must pass budget

House Editorial

The Virginia House of Representatives passed the Tax Reform Compromise Act of 2004 Tuesday, a proposal that will increase taxes to provide more than $700 million in revenue over the next two years.

This proposal creates a responsible compromise within the state Congress and will prevent a government shutdown in June if approved by the Senate.

The passing vote comes while debates continue in both the state Senate and House over tax increases — debates that have continued since last summer. Republicans in both houses have proposed tax increases in response to Gov. Mark Warner’s call for $1 billion in tax increases over the next two years to make up for a projected $1.2 billion deficit.

The House’s proposal would raise the $700 million through a general half-cent sales tax increase, a heavy increase in the cigarette tax and a repeal of the sales tax exemptions that railroads, airlines and telecommunications companies currently enjoy.

The Virginia House proposal stands in stark contrast to the proposal in the state Senate, who’s proposal seeks to generate about $2.4 billion through similar — though more extreme — means, including increased taxes in the higher income tax brackets.

Both proposals face sharp opposition from the legislature in the opposite House of Congress and from many Republican senators and representatives. While both proposals were proposed by Republicans and supported by Democrats, more conservative Republicans stand opposed to tax increases.

The Senate and the House only can bring one proposal to Warner, and must reach a compromise before the fiscal year closes on June 30. Should they fail, the state government will shut down until an agreement is reached. A shutdown would stop all state employees from work, leaving gaps in emergency response as well as all other state services and organizations.

A government shutdown is 55 working days away from becoming a reality and must be avoided at all costs. The House proposal is a more than reasonable compromise between Warner’s proposals and the well-being of the people of Virginia. The Senate’s proposal goes too far in taxation and, while it would pay off the state deficit, it would be too great a burden for taxpayers to bear.

The recent debate over next year’s budget has been raging since Warner recalled Congress after the session officially closed March 16. The current emergency session was convened to help avoid the potential state shutdown.

While the bill’s passage in the Senate is the first step towards preventing a shutdown, house speaker William Howell said that "it’s not going to bring closure," in a meeting with Warner after the House voted on the bill. The bill still faces a tough battle in the Senate, and should it fail to pass there, both state Houses will be sent back to the beginning. Starting over will force the two state Houses to draft new proposals and put them to vote again.

A shutdown must be avoided — and the Senate’s approval of the House’s bill is an appropriate compromise that ensures no shutdown will occur.