Tax-Relief, Transportation Proposals Essentially Killed This Year

By Sandhya Somashekhar and Tim Craig
Washington Post Staff Writers
Tuesday, February 26, 2008

RICHMOND, Feb. 25 -- The Virginia Senate defeated a tax-relief proposal Monday that would have given homeowners as much as a 20 percent break on their real estate assessments.

A committee of the House of Delegates, meanwhile, rejected a proposal to raise the state's gasoline tax by a nickel a gallon over the next five years, effectively ending plans to raise more money for transportation this year.

The votes probably marked the end for two key issues before the General Assembly for this year's 60-day session, which entered its final two weeks Monday.

The homestead exemption was expected to be popular in Northern Virginia, where tax bills have more than doubled for some residents in the past several years. If enacted, it could have saved the owner of a typical Northern Virginia home hundreds of dollars a year. But the business community, including the Virginia Chamber of Commerce, lobbied heavily against the bill because of fears that it would shift the tax burden to the commercial sector.

Last year, the House and Senate overwhelmingly endorsed the proposal, which required approval in two legislative sessions to become law.

The bill was one of Gov. Timothy M. Kaine's (D) priorities, but Democratic Sens. Charles J. Colgan (Prince William) and Phillip P. Puckett (Russell) joined all 19 Republicans in their chamber to defeat the proposal for the year.

Senate Democrats accused Republicans of backing down because of an intense lobbying blitz by businesses. As recently as last month, Senate Republicans had identified the proposal as one of their top priorities.

"I think they decided to respond to the wishes of the commercial property tax owners," Sen. Mary Margaret Whipple (D-Arlington) said.

Republicans in the GOP-led House, which unanimously passed the bill, also condemned their counterparts in the Senate, saying they voted for the bill last year because it was an election year but succumbed to pressure this year.

"They don't have to run for four more years," said Del. David B. Albo (R-Fairfax), the sponsor of one of the bills, noting that delegates are up for election every two years while senators are up every four years.

But Senate Republicans said it was a flawed bill that needed more scrutiny. In particular, they said, the language could be construed to let only certain neighborhoods receive the exemption. In addition, they said, the business community this year highlighted the possibility that commercial taxes would go up to compensate for the loss in residential taxes.

Because it requires a change to the state constitution, the bill needed to pass the General Assembly twice before it could be put on the ballot in November. If voters had approved the change, it would have taken effect in July 2009. Senate Republicans said they plan to revisit their decision next year if the bill's problems can be fixed.

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