On February 3, Virginia’s House of Delegates voted 69-29 to repeal its state estate tax, bucking a trend among state legislatures to work to preserve the tax’s revenue in a time of record setting state deficits. Governor Mark Warner (D) had petitioned hard to preserve this piece of revenue for Virginia, which is facing an estimated 1.1 billion budget gap for FY 2004, but the vote is being touted by the Republican-controlled legislative body as a “veto-proof” majority. Though repeal advocates in Virginia argued that repeal would protect the state’s small farms and family businesses, data from the USDA and the Federal Reserve show that both the average large farm and family business in Virginia already fall well below the current $1 million exemption under federal law.

The President (faced with a 6 percent unemployment rate, increased homeland security needs and costs, and a projected $300 billion deficit for the coming year) has decided that repeal of the estate tax must be made permanent – at all costs. And the costs are great: nearly $56 billion in the first full year of repeal. But you wouldn’t know it from the President’s budget charts.