Quarterly: Winter 2004 - GWCAR - Greater Washington Commercial Association of REALTORS

CBQ >> Winter 2004 Issue

Virginia Assembly Update

The Virginia House, Senate and Governor's Office continue to fight over the budget and tax reform. Senate leaders contend that the state budget cannot stand another round of cuts while House leaders say that the legislature can balance the books without tax and fee increases if more cuts are made.

Warner's Tax Reform Proposal

Governor Mark Warner estimated that under his plan most Virginians would pay less in combined income, car and sales tax than they pay currently.

Some of the changes in the tax system would be:

increased standard deduction

higher personal exemption

phase out car tax over four years

reduce taxes in first $20,000 of taxpayer's income

create new income tax bracket for +$100,000 at 6.5 percent

increase cigarette tax to $0.25/pack

eliminate tax on estates valued under $10 million

close corporate tax "loopholes"

Other Concerns

We are monitoring the 2004 Virginia Assembly session for no-growth bills that would give local governments overly-broad latitude in limiting growth. Among these are bills allowing for the passage of Adequate Public Facilities (APF) ordinances and the imposition of impact fees for new development. APF ordinances allow a local government to defer approval of a site or subdivision plan if the existing infrastructure (such as roads, schools, water and sewer) are determined to be "inadequate" to support the proposed development. APF ordinances may only exacerbate "sprawl" and affordability by limiting the supply of land in a locality. Impact fees levy a fee on new developments, including new residential developments, affecting affordability, transportation patterns, the migration of the work force and funding for schools and services.