A Virginia state senator said he will seek next General Assembly session to rein in some of the hundreds of millions of dollars in tax breaks offered by the commonwealth, an effort to bring in much needed tax money during the worst economic slump in years.
In an interview with The Examiner last week, Sen. J. Chapman “Chap” Petersen, D-Fairfax, said he wasn’t prepared to discuss the details of the planned bill, but said it would focus on “protecting the middle class taxpayer.” He said he was “less sympathetic to the special interests, in terms of tax policy.”
“We’ve been handing out tax credits to everybody and their Uncle Bob over the past few years,” he said.
Gov. Tim Kaine’s administration in October officially estimated the size of budget shortfall to be $2.5 billion this fiscal year and the next, and announced cuts that include nearly 600 layoffs. Many lawmakers and staffers believe that projection will have ballooned by hundreds of millions of dollars by the time legislators meet in January.
Petersen took specific aim at the legislature’s repeal of the estate tax, which Kaine signed into law in 2006. Dubbed by opponents as the “death tax,” the abolition of the levy applied posthumously to large estates cost Virginia about $150 million a year. Mark Warner, Kaine’s predecessor and now a U.S. senator-elect, had vetoed a repeal of the estate tax in 2003.
The Fairfax lawmaker also suggested that land conservation tax credits were no longer as critical because of the real estate market downturn.
“It’s a great program for saving land from development, but right now there is very little development,” he said.
Michael Nardolilli, president of the Northern Virginia Conservation Trust, argued that an economic downturn is the best time to preserve land because prices are lower.
Virginia offers a tax credit of 40 percent of the appraised value of the donated land.
“It’s not a question of [land donors] making money off this deal, they lose money, significant money,” Nardolilli said.
