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The results of Gilmore's "no car tax" pledge have come home to roost.

I Told You So


Before the last gubernatorial election, in this space, I wrote about then-candidate James Gilmore's "No Car Tax" pledge, noting that Ronald Regan's tax cutting had resulted in more than doubling the national debt. My Back Page referred to former Gov. Douglas Wilder and the hard choices he had to make when he encountered a recession during his administration. Well, few listened to those of us who warned that Gilmore's populist plan was fiscally shortsighted. I hate to say I told you so, but I told you so. The fiscal chickens have come home to roost. The surplus from last year is gone. Revenue in Virginia, which had been growing at near double-digit levels, has now slowed to just over 3 percent annually. Virginia, like the rest of the country, is beginning to feel the effects of an economic slowdown. The Dow swings widely; the Nasdaq is down drastically from just last year. The chairman of the Federal Reserve, Alan Greenspan, felt compelled to surprise the financial world recently with a rate cut in hopes of stalling a further economic downturn. And yet Gilmore continues to insist that he's going to keep his promise and fully fund the phase-out of the car tax. And he's daring the legislature — up for election when he's not - to call his bluff. How's he going to keep paying for the car-tax repeal? In the same way I suggested years back. He's going to rob Peter to pay Paul. Unfortunately, we are Peter and we are Paul. Gilmore is trying to play a shell game with the state budget. It has been reported throughout the state that Gilmore is planning to cut some state agency budgets by at least 6 percent, with estimates for some agencies climbing high into double digits. Money will be shifted and slashed, though no one is exactly sure where. No one yet knows which agencies will feel the brunt of the governor's ax. But rest assured, when it falls, the howling will begin. Those who were so eager for the tax cut will have only themselves to blame when some of their services are cut, but I suspect they will wail nonetheless. Economics is a zero-sum game. When someone wins, someone else loses. Unfortunately, in addition to being Peter and Paul, we are all also the "someone" who loses; any loss of services affects us all. But not only does the governor want to cut agency budgets, he anticipates borrowing — something anathema to his conservative forebears — thus driving Virginia into debt. And, in large part to keep his promise on the car tax, through a process with the ungainly name of "securitization," Gilmore hoped to spend the so-called "tobacco settlement" money, $460 million dollars, funds which the state doesn't even have yet, to keep his pledge and pay off some debt. So much for using the tobacco money for the health of the youth of the commonwealth. Fortunately, the General Assembly shot that idea down in the first week of business. Transportation, too, is out as a beneficiary. (The governor ought to have to drive by himself - no chauffeur or state police — around Northern Virginia or Norfolk or Richmond during rush hour. Perhaps then he might appreciate the problems the rest of us face.) Nor will the state's teachers see any raise in the governor's budget. Although they are the ones saddled with implementing the state's SOLs, apparently the governor figured he didn't have their votes anyway, so the heck with them. Nor can the governor envision a cut in the food sales tax now, something that would truly have benefited all Virginians. Finally, the budget for the mentally disabled will be reduced. These programs and people need attention and funding, but apparently the governor doesn't see it that way. They might affect his car-tax refunds. Even with the details unclear, it is readily apparent to all observers that the state budget is a mess right now. And as the governor and others play politics with our money and our services, chances are that the mess will not be readily cleared up. This is a time for leadership, not ego. If nothing else, for the time being, the governor ought to hold off on the car tax pledge and allow the economy to stabilize and begin growing again. "Fiscal prudence" does not equal slashed budgets, not if budgets do not have to be cut. This is the time for firm, realistic leadership. If the governor won't show some, the legislature and the citizens of the commonwealth must. We should not allow the governor to gut the state budget and necessary agency funding to keep his irresponsible car-tax proposal afloat. There are other more deserving and pressing needs in the state. It is incumbent upon all citizens to contact their legislator and ask for a responsible vote on the budget. Ominously, Attorney General Mark Earley has now made the car-tax pledge the cornerstone of his run for the governor's office. So beware and be careful what you ask/vote for. I don't want to have to say I told you so again. James D. Watkinson is a historian who lives in Richmond. Opinions expressed on the Back Page are those of the writer and not necessarily those of Style Weekly.

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