Dear Friends and Neighbors,

I know that many of you are frantically getting ready for the new school year, planning for that last weekend get-away, or dreading the onslaught of ?deferred? meetings that always seem to consume September. As you may have seen in the news, our Special Session on transportation has been set to start on September 27th. I appreciate the feedback I have received on this issue ? which I know is important to all of us.

Despite the fact that it is August, there is still much going on in the legislative arena that I want to share with you. On Monday, I went to Richmond to vote on the Governor?s recommendations to House Bill 5019 ? a controversial piece of legislation that both repeals the estate tax in Virginia while at the same time cutting Virginia?s land conservation tax credit program. However, that debate quickly became overshadowed when news was released of an error in the adopted budget that, if not corrected, will result in approximately $130 million less being provided to public school systems.

While this error may not have been a problem if caught earlier, it is a significant problem now that schools have adopted their budgets based on incorrect assumptions. If left uncorrected, appropriations to the City of Fairfax and Fairfax County will be reduced by about $300,000 and $17 million, respectively. How did such an error occur? In Governor Warner?s introduced budget, he recommended accelerating the reduction of the sales tax on food items so that the full reduction would take place in FY 2007. The General Assembly agreed and eventually adopted the idea. However, associated adjustments to the distribution formulas were not made correctly (a portion of the sales tax goes to education), which resulted in overstating the amount due to localities. I take a certain amount of pride that it was Fairfax County staff that discovered the error.

I had an opportunity to hear Governor Kaine discuss the issue before a meeting of the joint money committees of the House and Senate, where he accepted full responsibility as chief executive (although there is blame enough to go around). Regardless, it is critical to make sure that steps are taken to ensure that such an error does not occur in the future. I have no doubt that the Appropriations Committee and the entire General Assembly will ask the tough questions ? as well we should.

Equally important, though, is to make sure that our children are not penalized for the State?s error. While there were many promises to correct the error on both sides of the aisle, final action was deferred until September 27th. This I think this was unfortunate, and I voted against deferral. Any responsible school system can?t rely on just a promise and will need to start cutting back programs now. Not only will our schools need to wait an entire month, but debate over the error will now take up valuable time that was to be used solely for transportation.

Now back to the conservation tax credit. Based on current growth rates, Virginia will develop more in the next 40 years than the last 400 years combined. As unbelievable as it seems, it is a stark reality. The quality of life of future generations rests on having the foresight to plan this growth in a balanced way.

Virginia?s conservation tax credit program allows a property owner to take a credit for 50% of the value of a property if he/she places it under a permanent conservation easement. This is not only important for cash-poor/land-rich farmers in fast growing areas but also for preserving historic properties and open space in Northern Virginia. The program?s success is also part of the problem, at least according to a majority in the Senate. The program did not originally have a cap, and last year cost about $130 million. At the same time, while the House has blocked attempts to scale back the credit in the past, a majority of the House has been seeking repeal of Virginia?s estate tax, a proposal consistently blocked by the Senate.

And so, House Bill 5019 was born. As originally proposed, the measure linked repeal of the estate tax with a cap on the tax credit of $50 million the first year and $75 million for subsequent years ? effectively cutting the program in half. Since it was part of the budget deal, both sides swallowed hard and passed the measure ? although I voted against the bill along with 25 of my House colleagues.

Governor Kaine, who has set a goal of preserving an additional 400,000 acres of open space by the end of the decade, proposed amendments to maintain the cap, but set it at $100 million. He kept provisions to ensure that the program was not abused, while streamlining the process to keep down bureaucracy. The amendments garnered unanimous support in the House. However, passage was not without controversy. While the initial cap was set at $100 million, the amendments provided that this amount would rise automatically each year based on a formula. This ?indexing? is nearly unprecedented in Virginia. I have mixed feelings on it. On the one hand, Virginia is notorious for not revisiting caps that after a few decades become laughably obsolete. On the other hand, I am concerned that fiscal integrity is compromised because indexing lets programs sail along on automatic pilot. Several promises were made to remove this provision next year and I suspect it will disappear after the next Session.

Finally, I am pleased to announce that I will be holding informal office hours on the second Saturday of the month from 9:00 to 11:00 AM at Main Street Bagel ? starting September 9th. This will be an opportunity to just chat or to ask questions about legislation affecting our community. Hope to see you there! If you have a specific issue to discuss, I am always happy to arrange one-on-one meetings. Have a safe and happy Labor Day weekend!

Sincerely,


David Bulova