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Lawmakers wary of McDonnell tax reforms

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Politics,Local,Virginia,Steve Contorno

RICHMOND -- Virginia lawmakers are wary of Gov. Bob McDonnell's newfound enthusiasm for reforming the state tax code, especially the governor's hint of interest in raising the gas tax in line with inflation, the very same proposal lawmakers offered earlier this year only to have it rejected by the governor.

"He had his chance and he decided to avoid that difficult position," House Minority Leader David Toscano, D-Charlottesville, said Monday. "If he couldn't take that position now, how is he going to push for broader reforms next year?"

McDonnell recently told the Associated Press that the state's tax system should more closely reflect today's economy. The state could lower the sales tax rate and apply it not just to retail sales but services like haircuts, legal advice and car repairs, he said.

The governor also suggested that the state's 17.5 cents gas tax could be raised in line with inflation to help pay for roads, a proposal he rejected earlier this year when the Senate proposed it. Lawmakers gathering Monday for the last day of the 2012 General Assembly said it's less likely that a gas tax increase would pass next year when lawmakers face re-election.

"Any time you say you want to change the tax code, there are winners and losers," said Senate Finance Committee Chairman Walter Stosch, R-Glen Allen. "The question is: How do you make it more fair and minimize the losers?"

Lawmakers said McDonnell should spend his remaining two years focusing on a narrower goal of finding new funding for the state's congested highways.

McDonnell's spokesman, Tucker Martin, said the governor "was not endorsing any specific course or action" on tax reform.

"This is simply a conversation," he said. "It is not a set of proposals."

McDonnell just months ago rejected a Senate plan that would raise the gas tax with inflation and use the extra money for roads. The governor instead wanted to shift part of the state's sales tax revenues to transportation, a proposal lawmakers rejected on the grounds that it diverted money from education and other programs.

"He's got to be willing to talk about transportation, and then I'll start thinking about changing the other pieces," Sen. John Watkins, R-Midlothian. "It has been ignored for two decades, and it's time somebody pay attention."

scontorno@washingtonexaminer.com

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