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Assembly
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“Yet even after exceeding the constitutional limit, the General Assembly has failed once again,” Warner said.
He reserved his most angry charge for the House controlled by a strongly conservative Republican caucus: “By voting to adjourn, the House has again abdicated its responsibility.”
A compromise must be reached by June 30 when the current budget runs out. Prolonging the impasse further could risk a government shutdown.
Local governments are looking for answers sooner rather than later. In Rappahannock, under law, the school budget must be approved by May 1.
School systems, for example, have to let teachers know next month whether they’ll be needed next year and, without knowing the level of state aid, may have to lay off some staff.
Adding further anxiety to the stalled negotiations is the status of the commonwealth’s prized AAA credit rating, which had been stellar until recently. Wall Street investors put Virginia on a credit watch list last year because of the financial imbalance between its revenue sources and spending commitments.
Looking to reassure not only investors, but also taxpayers, in the commonwealth’s fiscal integrity, Warner proposed a two-year $59 billion budget in December that raised some taxes and lowered others to better tap into the modern economy.
Warner found an ally in the Republican-led state Senate, which proposed nearly twice the amount of tax increase as Warner and some of the same tax breaks in its $62 billion spending proposal.
The Republican-led House of Delegates, which is dominated by more conservative Republicans than the Senate, balked at any tax increase and instead chose to revoke sales tax exemptions for big corporations in its more modest $58 billion budget plan.
“How do you give tax relief and raise taxes at the same time?” asked McLean Del. Vince Callahan (R-34th). “That’s an oxymoron.”
Members in the House particularly object to a proposed income tax increase. Warner and the Senate are both proposing new tax brackets for high-income earners.
Northern Virginia already accounts for more than 40 percent of the state’s income tax revenue, a figure that could jump to 50 percent, according to Callahan, if such increases are approved.
Local governments did seek more taxing powers to directly
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