RICHMOND, JAN. 25 -- Northern Virginia legislators are fuming at Gov. L. Douglas Wilder for backing a bill that would deny more than $20 million in tax refunds to state residents who operate small businesses in the District of Columbia.
Wilder is seeking to reverse the impact of a Virginia Supreme Court ruling last year that said Northern Virginians who pay the District's unincorporated business franchise tax -- primarily small entrepreneurs -- are entitled to a tax credit when filing their state income tax returns.
The court's decision is estimated to cost the state more than $20 million, almost all of it due to Northern Virginians. But a bill sponsored by state Sen. Virgil H. Goode Jr. (D-Franklin), at the request of the Wilder administration, would give refunds only to the small fraction of taxpayers who have already applied for the money. Those who haven't yet filed for refunds would be left empty-handed, and the tax credits would no longer be allowed in the future.
"I think it is unfair to the Northern Virginia area," said Sen. Charles J. Colgan (D-Prince William). "We spend too damn much time looking out for the tax collectors down here and not enough looking out for the taxpayer."
"This is the administration that is so stalwart as far as not raising taxes," Sen. Joseph V. Gartlan Jr. (D-Mount Vernon) noted sarcastically, adding that Wilder's support for the tax bill shows "they're desperate for the money."
The Northern Virginia delegation isn't unified against the Wilder-Goode measure. Sen. Clive L. DuVal 2d (D-McLean) said he doesn't like to deny refunds to local business people, but the state's
$2 billion budget gap means "we've just got to have the money, it's as simple as that."
The court's ruling last year sprang from a case brought by Llewellyn King, a Fairfax County resident who owns a D.C. publishing company. The justices said that the District's unincorporated business tax, for all practical purposes, is the same as an income tax.
Virginians who pay income taxes in other states are allowed to take that as a credit on their state return, so those paying the District's tax should be allowed to do the same, the court ruled.
Virginia Tax Commissioner William H. Forst disagreed. The D.C. business tax is essentially the same as the gross receipts tax that most Northern Virginia localities levy on businesses, he said.
"It's an equity question," Forst said. "We're trying to put everyone on a level playing field."
Senate Finance Committee Chairman Hunter B. Andrews (D-Hampton) has scheduled a public hearing on the bill for Monday afternoon.
In other legislative news today, an unlikely coalition has developed in support of a bill that would prohibit public housing authorities from outlawing guns owned by tenants.
Del. S. Vance Wilkins Jr. (R-Amherst), one of the General Assembly's most conservative members, is seeking to overturn a policy by the Richmond Redevelopment and Housing Authority banning guns in the publicly subsidized apartments.
Joining Wilkins at a news conference this afternoon were leading state civil rights activists, who said the bill unfairly discriminates against tenants.
"The great majority of crime in public housing is brought in by persons from outside," said state NAACP President Jack W. Gravely. "It is an injustice to public housing tenants to restrict their right of self-defense as if they were the perpetrators of crime."
"I don't like being put in the same category as lunatics and felons," who also are restricted from gun ownership, said Alma Barlow, a Richmond public housing tenant.
"These people are left as sitting ducks," agreed Richmond civil rights activist Marty Jewel.
Gravely allowed that an alliance between his group and Wilkins is an unusual occurrence. But he said civil rights advocates "must be sophisticated enough to coalesce on those issues" where they can find common ground with adversaries.
Wilkins chimed in, "The same thing goes for the Republican Party."