Virginia Senate Preserves State Estate Tax - April 7, 2003 Vol. 4 No. 7

April 7, 2003 Vol. 4 No. 7:

Published: 04/07/2003

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Virginia Senate Preserves State Estate Tax

In an April 3 victory both for proponents of preservation of a fair estate tax and for the cash-strapped state of Virginia, itself, the Virginia Senate fell 2 votes short of the 27 it needed to override Gov. Mark Warner’s (D) veto of repeal of the state’s estate tax. The state is currently facing a deficit of at least $1.1 billion for FY 2004, which starts on July 1, 2003. According to reports by the Center on Budget and Policy Priorities, in response, Virginia -- and many other states facing a similar crisis -- has made plans to cut funding for correctional facilities, laid off state employees, and raised tuition at state-funded universities.

In 2002, Virginia’s state estate tax brought in approximately $133 million for the state. In the midst of the worst budget crisis the state has experienced since World War II, the State’s General Assembly voted in February to eliminate the tax and this revenue entirely. Warner’s veto came with a plea to not further exacerbate the state’s financial duress. State Senator Leslie L. Byrne (D), quoted in the Washington Post, went further explaining that, “There are 7 million people in Virginia … and we’re out trying to protect 1,800 from a tax…. When we cut this money out of the budget, that’s money that could have gone to school construction … to a prescription drug benefit … to staffing for nursing homes.”

Congress and the White House should heed the words of Byrne and follow the example of the Virginia Senate. Instead, however, the President and congressional Republicans continue to push for the permanent repeal of the estate tax, in the face of growing needs at home and abroad.

For more on the effort to prevent permanent repeal of the estate tax, go to www.fairestatetax.org.