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The GOP controls both houses of the Legislature, and the dispute is largely a Republican-vs.-Republican fight. The Republican moderates who control the Senate are pushing for a $2.4 billion tax increase. The Republicans in the more conservative House of Delegates are dead set against a tax increase.
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But over the past three years, Virginia has run up $6 billion in budget shortfalls, in a jam attributed to the general economic downturn, the rise in health care costs, the rollback of a hated car tax by the previous governor, Republican James Gilmore, and a slump in the telecommunications industry.
The dispute dates to last summer, when Democratic Gov. Mark R. Warner called for heavier taxes on the wealthy, higher sales taxes and other increases that would generate an additional $1 billion over two years.
The GOP-controlled Senate went even further, proposing a $2.4 billion increase by most of the same means Warner suggested.
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But the House has refused to go along with any sales or income tax increase. Instead, it has recommended repealing sales tax exemptions for railroads, airlines, shipping, telecommunications and other major industries. Supporters said it would generate nearly $600 million, although state officials suggested that it is too optimistic.
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