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Va. gov. taps county car rental taxes for budget

NEW YORK, Oct 24 (Reuters) - Virginia's Gov. Mark Warner plans to use some of the monies that counties receive from car rental revenues to help plug a state budget gap that could reach $2 billion by the end of fiscal year 2004, a spokeswoman for Warner said Thursday.

"It's hard to balance the budget in this historically large shortfall without tapping some of the aid to localities," said Ellen Qualls, a spokeswoman for Warner.

Revenues from car rentals are collected by the state and appropriated back to the counties, so the state is legally allowed to tap the funds, Qualls said.

Warner plans to earmark for state coffers 10 percent of the car rental receipts, or $3.2 million, for this fiscal year, and 13 percent, or $4.1 million, for the fiscal year that starts July 1, 2003, she said.

Counties that would be most affected would be Arlington County and Loudoun County, home to Reagan National Airport and Dulles International Airport, respectively.

"The counties that receive a lot of revenue from this because they have an airport have a revenue base that other localities around Virginia don't have," Qualls said. "It's not like we're raiding them."

On Oct. 16, Warner slashed $858 million from state agency spending and announced about 1,850 layoffs in an effort to plug what had been forecast as a $1.5 billion hole in the state's $50 billion, two-year budget.

But other pressing fiscal issues could drive the shortfall to $2 billion, Qualls said.

That's on top of the $3.8 billion hole that Warner closed earlier this year.

The state is in another revenue re-forecasting process that will conclude Nov. 27. On Dec. 20, the governor will present an amended budget, reflecting the new estimates.

All possibilities for spending cuts are being considered, even the normally sacrosanct kindergarten through high school funding, Qualls said.