Tax Plan Boosts Programs, Offers Less Relief

Marvin and Betty Quinn, senior citizens who live in McLean, would have paid about $200 less under Warner's plan, largely because of his plan to phase out the tax on their three cars.

Under the new tax code, they will keep their age-related tax breaks but will not get their car tax cut, and their income tax cuts will be smaller. They each will pay about $62 less a year by 2007.

For Arnold Krauss, who owns a flower shop in McLean, the new tax code will mean he will have to charge his customers 5 percent sales tax, instead of 4.5 percent.

Krauss said that could dampen the business recovery that he said seems to be underway.

"We're well ahead of last year at the same time. It seems like it's really coming back," he said. But he added that the sales tax increase "puts us in a less competitive position with the Internet people. The playing field becomes less even than it was before."

Krauss and Cave said they support spending more money for schools, a key goal of the tax plan the legislature passed. Cave said three of her four grandchildren are in public schools in Virginia.

"The schools don't have the things they need," she said. "They have really cut their funding."

Lawmakers have yet to determine how they will spend the money generated by the new taxes. Budget negotiators, who had not met since mid-March, gathered again Wednesday in the hopes of reaching a final budget soon.

Del. Vincent F. Callahan Jr. (R-Fairfax), the lead negotiator for the House, said he is determined that an agreement be reached by Friday and voted on early next week.

"I'm determined it's not going to bog down," he said, "not just have it hung up in minutia. The thing has dragged on long enough."

His counterpart, Sen. John H. Chichester (R-Stafford), echoed those sentiments and said: "I'm not going to be rushed, [but] I'm confident that we'll have a budget in the next couple of days or so. . . . I don't see any major stumbling blocks."

The initial discussions among budget negotiators did reveal some disagreement, especially over how to distribute extra revenue.

Some lawmakers want education money distributed to schools based on the number of children who attend in each county. Under that formula, Fairfax County, for example, would receive about $53 million during the next two years.

Others want the money distributed according to a formula that favors small, rural school districts. Under that proposal, Fairfax would receive about $24 million.