By Michael Sluss

Archives Reprint

    RICHMOND - State lawmakers agreed Saturday to extend the General Assembly session by three days in an effort to salvage stymied budget negotiations.

    But the House of Delegates and the state Senate remained sharply divided over proposed new taxes, giving legislators little reason to expect a compromise by their new Tuesday deadline.

    "On a scale of 1 to 10, I'd give it an 'I don't know,'" said House Speaker Bill Howell, R-Stafford County, as delegates filed out of the Capitol on Saturday afternoon.

    Gov. Mark Warner rebuked legislators for failing to pass a budget by Saturday, when the General Assembly was scheduled to conclude its work. The Democratic governor called on both Republican-controlled houses to compromise and cease the "posturing" and "chest thumping" that have accompanied a two-month debate over taxes and spending.

    "It's time for the legislature to enact a budget that will fix Virginia's long-term finances and make our tax system fairer," Warner said in a news conference shortly after the House and Senate adjourned for the day.

    Warner said he was willing to talk with budget negotiators but had not planned any formal meetings.

    The negotiators will meet tonight, but the full House and Senate will not convene again until Monday. Lawmakers voted to forgo their $115 per-diem payments for their extended stay in Richmond. The General Assembly last stretched its session past its scheduled completion date in 1998.

    It was unclear Saturday whether lawmakers would approve a further extension if a compromise continues to elude them. Warner could call lawmakers back into session if they adjourned without a budget deal.

    "We'll cross that bridge when we come to it," said House Majority Leader Morgan Griffith, R-Salem.

    Sen. William Wampler, R-Bristol, said lawmakers should remain in Richmond until they pass a budget.

    "If we don't do it by Tuesday midnight, then we ought to stay another 48 or 72 hours or whatever it takes until we have a budget," said Wampler, a member of the Senate's four-member budget negotiating team.

    The current state budget expires June 30. Lawmakers are haggling over a spending plan for the two-year period that begins July 1.

    The Senate's $62 billion plan relies on $3.8 billion in revenue from new taxes, including increases in the sales tax on goods, cigarette taxes and taxes on incomes greater than $100,000. Half of the new tax revenue in the Senate plan would come from taxes on gasoline and other transportation-related sources to fund road construction.

    The House's $58.3 billon proposal calls for no general tax increases. House GOP leaders have embraced spending cuts and a proposed repeal of certain commercial and industrial sales tax exemptions to balance their budget.

    Senate leaders have declared their proposed tax increases necessary to provide stable, long-range funding of education, health care, transportation and public safety. House leaders insist their plan strikes a balance between funding essential services and limiting the burden on taxpayers.

    Warner effectively started the tax debate in November by introducing his own plan to revamp the tax code and generate more than $1 billion in new revenue over the next two years.

    Warner proposed increases in the sales tax on goods, cigarette taxes, and taxes on incomes greater than $100,000. He also incorporated tax reductions into the overall package, which he said would ease the tax burden on nearly two-thirds of the state's households.

    Warner said Saturday that many cities and counties would probably increase real estate taxes if lawmakers failed to adopt a "responsible" budget and tax reform package.

    "I remain convinced that no minds are so closed that they don't see the sensible reality that the legislature's failure to act simply passes the burden on to Virginia taxpayers at another level," Warner said.

    The governor also warned that Virginia's fragile AAA bond rating could be lost if the House and Senate remain deadlocked. One Wall Street rating agency has had Virginia on credit watch since September, giving rise to concerns about a possible downgrade that would increase Virginia's borrowing costs.

    Sen. John Edwards, D-Roanoke, said he expects Senate negotiators to insist on revenue increases that provide a "long-term fix" for the state's budget structure.

    "You only get a chance to do something like this once in a generation," Edwards said. "You really need to do it right or not do it at all."

    But many House Republicans remain just as adamant about holding the line on taxes, even if the effort requires a long standoff with the Senate. Six House Republicans arrived at the Capitol on Saturday wearing seersucker jackets and pants, demonstrating their willingness to work into the heat of summer to fight tax increases.

    "Better that we change wardrobes than that we should abandon our convictions at the expense of Virginia voters," said Del. Lee Ware, R-Powhatan County, who dubbed the group the "Seersucker Caucus."

    The House passed the resolution extending the session by a vote of 97-2. The Senate vote was 39-0.

    Del. Jim Shuler, D-Blacksburg, said House Democrats supported the resolution "as a courtesy" to budget negotiators. But, Shuler added, "I think there's not going to be an agreement to extend again."

    Two Southwest Virginia Democrats - Del. Jackie Stump of Buchanan County and Del. Joe Johnson of Abingdon - voted against the extension.

    "All they're doing is playing a game right now, and all we're going to be doing is sitting around looking at each other," said Stump, a retired United Mine Workers leader and labor negotiator.

    Stump, a member of the House Appropriations Committee, said negotiators will not budge until they feel the pressure of a "drop-dead deadline." He said he would prefer not to make the 5 1/2 -hour drive to Richmond until a deal is imminent.

    When House Minority Leader Frank Hall, D-Richmond, joked that a state airplane could be sent to Southwest Virginia, Stump replied, "I don't want a state airplane, I want a budget."

   Staff writer Kevin Miller

   contributed to this report.

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