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Gov. Mark Warner last Tuesday proposed sweeping changes to Virginia's tax structure that he said would raise $500 million annually but cut taxes for 65 percent of residents.

Warner proposed to lower the income tax for most Virginians; raise the state sales tax 1 cent to 5.5 cents; lower the food tax from 4 cents to 2.5 cents and raise cigarette taxes from 2.5 cents to 25 cents per pack

He also would eliminate the estate tax from working farms and family-owned businesses; ease the taxes on active-duty military personnel, reservists and National Guard families; phase out the car tax over four years; close corporate loopholes; and reduce some tax benefits for senior citizens.

But as the old saying goes, the governor proposes and the General Assembly disposes.

The budget must pass muster with Del. Vincent Callahan (R-34th), Appropriations Committee chairman. Callahan predicted that most of Warner's proposals would be changed or killed during next year's Assembly session.

The proposed sales tax hike is too high and might stand a better chance of passage if half of it were marked for education, Callahan said. Right now, the money seems destined for the general fund, he said.

Voters in Northern Virginia and Hampton Roads overwhelmingly turned down sales tax referendums last year that would have raised money for transportation improvements only.

Warner's ideas do not amount to tax reform, but are just changing percentages in current programs, he said. Callahan said he had signed off on bills during former Gov. James Gilmore's administration to eliminate the car and food taxes.

William Lecos, president and CEO of the Fairfax County Chamber of Commerce, said Warner should be applauded for taking a comprehensive approach to tax reform.

"He clearly is not nibbling at the edges or relying on the one-time fixes that have allowed the commonwealth to steer through the budget crises of the past six years," Lecos said. "You really do have to get down to the core of the challenge. The goal is to preserve the economic competitiveness and quality of life" that are shared by the community.

Broader-based taxes, such as the sales tax, are fairer than those aimed at single industries, he said. Lecos said he hopes Warner will address the "glaring imbalance" between state and local resources.

"Every [tax] formula holds Northern Virginia's wealth against it," he said. "We hope when the day is done that they will let localities share in the income tax at its source. It would relieve the pressure on the real-estate tax."