Panel Orders Localities to Stop Collecting Taxes, Fees

Kaine administration officials and legislative leaders plan to meet this week to try to come up with a solution. House Republicans and Kaine and Senate Democrats appear to be offering different answers, meaning the chances of reaching a deal before Saturday appear grim.

House Republicans are floating a proposal to require local governments to vote on which taxes and fees to impose -- an idea opposed by local governments last year.

Kaine and Senate Majority Leader Richard L. Saslaw (D-Fairfax) said Monday that they want legislators to impose the taxes. Democrats accuse Republicans of wanting to push the state's responsibilities onto local officials.

"We are going to do it from here [Richmond], or it ain't going to happen," Saslaw said. "It's a nonstarter. Any taxes that get imposed are going to be voted on by the General Assembly of Virginia. Period."

House Majority Whip M. Kirkland Cox (R-Colonial Heights) responded that House Republicans probably won't agree to raise taxes this year.

"To say anything is a nonstarter is a mistake. We have tried not to draw lines in the sand," Cox said. "We need to fix the regional plans, but I don't think there is much appetite from us to impose a new tax increase."

But Kaine said, "We've got to take our responsibility seriously. The court said, 'General Assembly, if you want to do this, you have to do it yourself.' "

House Majority Leader H. Morgan Griffith (R-Salem) said Kaine's remarks "make negotiations almost impossible" because the governor signaled to him Sunday that the GOP approach might work. "I feel like I have been punched in the gut," Griffith said.

Kaine also plans to use the Supreme Court decision to push for more money statewide to address a projected $400 million shortfall in the part of the state budget used to repair and maintain roads. Kaine doesn't have a specific proposal, but he noted that he pushed for an increase in the sales tax on cars during the first two years of his term.

The loss of statewide revenue, including a decline in sales and fuel tax revenue and the proposed elimination of the abusive-driving fees, is already having an effect.

Until recently, the state was expecting to spend $447 million next year on local and regional highway projects.

But Secretary of Transportation Pierce Homer sent a letter to local leaders Friday saying that they would now be getting $238 million. Transit funding will be reduced by 10 percent, which Homer said could result in a $15 million cut in public transportation projects in Northern Virginia next year.

But the Supreme Court ruling is what caused the most confusion.

Kaine said he wants the General Assembly to come up with a plan for offering refunds to the people who have already paid the taxes and fees.

Staff writer Anita Kumar contributed to this report.