By Spencer S. Hsu
Washington Post Staff Writer
Friday, March 13, 1998; Page B01

RICHMOND, March 12 – Senate Republicans throttled an $800 million plan to roll back Virginia's car tax and launch a major school-building drive today, barely a day after the measure had sailed through the House of Delegates by a unanimous vote.

The Senate's 21 GOP members were joined by a Democrat in the 22 to 18 vote to reject the two-year House plan to spend $447 million to begin Republican Gov. James S. Gilmore III's phaseout of the car tax and borrow $350 million to fund a Democratic initiative to build and renovate schools.

The collapse of the House left a House-Senate budget panel as the only legislative body that may consider the two proposals that have dominated this 60-day session, which is scheduled to end Saturday. Several lawmakers predicted that the impasse would force Gilmore to call a special session next month to iron out the details of the car-tax cut that led him to a landslide victory in November.

Another possibility is that Gilmore, who as governor enjoys broad powers in shaping legislation, could send the General Assembly a totally new bill in the session's final two days. Either way, lawmakers said, Gilmore – who proposed a two-year car-tax cut of $493 million and doesn't want any school construction plan getting in the way – has seen his hand strengthened by the legislature's deadlock.

"Any time you have a Capitol, a General Assembly divided, then the Third Floor has to take charge," Del. John H. "Jack" Rust Jr. (Fairfax), a leading House Republican, said in reference to the governor's office suite here. "The governor has to step in and give us some leadership."

Democrats, whose push to link school construction with any car-tax cut have complicated Gilmore's efforts this session, said the governor's unwillingness to bargain or focus on many issues beside the car tax has prevented the legislature from passing bills outlining how a tax cut would work.

"There's not going to be legislation for either school construction or the car tax, because the governor made it plain it's either his way or no way," said Del. Thomas M. Jackson Jr. (D-Carroll). "His influence over Senate Republicans killed school construction. It happened because Jim Gilmore wants [to talk] car tax and only car tax this session, and he exercised his power over Senate Republicans to ensure nothing else would succeed."

Gilmore answered with a flat yes today when asked whether a special session were an option to try to push through his original tax-cut plan. He called the House plan to sell bonds to pay for school construction a "bad idea" at a time when Virginia is flush with tax revenue from a booming economy.

"If they want to do something on school construction, I think you should do it without debt," Gilmore said. After calling Democratic demands for school building "half-baked" in January, he said today that "I don't have a philosophical problem with addressing the needs of school needs, but when and how are to be discussed."

Privately, top Republicans said Gilmore wanted to force a standoff until lawmakers reconvene on April 22 to consider gubernatorial vetoes and amendments to bills. In the weeks leading up to that session, they predicted, Gilmore could whip up a political frenzy against Democrats based on his "No Car Tax!" campaign pledge.

"The governor's not doing this for himself, he's doing it for the people who mandated a change," said Gilmore spokesman Mark A. Miner. "It is not about the governor being stubborn; he's being principled."

For now, the 12-member conference panel examining differences in the House and Senate versions of the two-year, $40 billion state budget will try to establish a tentative cost of the car-tax cut. But the budget bill the panel will come up with is limited in its specifics about how any expenditure should be carried out, and lawmakers say that trying to impose a 5-year, $2.8 billion tax cut through a budget bill – without accompanying details in other legislation – would create myriad legal problems.

In today's Senate vote, the chamber's 21 Republicans were joined by Democrat Richard J. Holland (Isle of Wight) in trashing the House plan. An hour later, angry House members killed a bill that included the Senate's version of Gilmore's tax-relief plan: a $474 million plan that does not include school construction.

"There can be no clearer statement of unity, making power-sharing work, doing the people's business, and treating everybody in the state fairly than what we did yesterday," said House Democratic Leader C. Richard Cranwell (Roanoke), referring to the 100-0 House vote for the tax relief plan that included the bond program for school construction. "How can you do the people's business if you don't talk with one another?"

House and Senate budget conferees, who crashed through a 1 p.m. deadline for finishing the state's two-year spending program, said the probably would not be able to go further than appropriating funds for either tax cut or school bonds. Any attempt to write specific legislation in a budget bill could invite legal challenge, several lawmakers said.

Tonight, Cranwell said efforts were underway to revive the House compromise with Republicans and to cobble together a two-thirds majority needed to reintroduce their plan. But the House-Senate impasse likely will remain, many legislators said.

In other action, the Senate voted 22 to 17 for final passage of a bill pressed by Northern Virginia developers and sponsored by Sen. Richard L. Saslaw (D-Fairfax) to curb local government zoning powers.

The bill, already passed by the House, would make it easier for property owners to claim vested rights for building plans, after which local officials could not rezone their land.

Staff writer R.H. Melton contributed to this report.