Tax Plan Boosts Programs, Offers Less Relief

Chichester said the conferees will have to wrestle with that issue and others.

Krauss said he believes they will reach a budget agreement.

"They won't have any trouble figuring out how to spend it," Krauss said. "They know how to spend."

Qualls said the governor hopes differences are resolved soon, so that people can appreciate the fruits of the tax increases.

"The first headlines will focus on the money they will be paying out. That's a bit unfortunate," she said. "The investment in education and other core services of state government are yet to be worked out."

But even as the final budget process moves forward, Virginians are beginning to ask how the new tax code will affect them.

Smokers will pay more. By 2005, a pack of cigarettes will cost 27.5 cents more. For a pack-a-day smoker, that translates into $100 a year.

The increase in the sales tax will mean goods get more expensive. A $199 Sony Playstation will be $208.95 instead of 207.95. A $1,000 refrigerator will cost an additional $5.

But groceries will cost less. Someone who spends $100 at the grocery in 2007, when the tax cuts are in place, will pay $1.50 less than that person would today.

Some poor families will get a new tax break, but the deductions for others will be smaller than Warner had proposed.

A married couple who have already turned 65 will continue to receive $24,0000 income tax deductions. But people who turn 65 after the law goes into effect will lose the benefit if their incomes are well above $75,000.

"It doesn't go as far as it could on the fairness side," said Bob Zahradnik, a policy analyst for the Center on Budget and Policy Priorities. "But from a political standpoint, this is a pretty impressive accomplishment."

Warner officials said the governor's office is submitting the final details of the plan to in-depth analysis. But some politicians have come to conclusions more quickly.

Del. William R. Janis (R-Goochland), who opposed the tax increases, described during Tuesday's debate what he called a "typical family" living in his district, who own a 10-year-old Lexus and a new Jeep. He said later the family was his own.

He predicted he will see a $100 increase in his car tax bill.

"Don't kid yourself. This is a tax increase," he told his colleagues.

Lawmakers who voted for the tax plan said in many areas the increases will be nominal and will enhance state services.