- The Washington Times - Tuesday, November 28, 2000

Virginia Gov. James S. Gilmore III yesterday pledged to deliver on his 1997 campaign promise to repeal the state's car tax.

"I would tell [Virginians] to have no doubt about my resolute intention to eliminate the car tax as promised," Mr. Gilmore told The Washington Times.

The Washington Post reported this weekend that Mr. Gilmore was concerned a slowing Virginia economy might affect the state's ability to continue phasing out the tax.

But one of Mr. Gilmore's top advisers told The Times on Monday that the governor is looking at several options including scaling back other state programs and trimming budgets to free up the necessary funds.

If revenues continue to flatten out, Mr. Gilmore said, he'll need the support of the Republican-controlled General Assembly to continue with the car-tax repeal.

"All of this must be done within existing budgets and economic conditions, which we don't control, and the attitude of the legislature, which we don't control," said Mr. Gilmore, who is scheduled to appear on WTOP Radio's "Ask the Governor" program at 10 a.m. today on 107.7 FM and 1500 AM.

Delegate Vincent F. Callahan Jr., a McLean Republican who serves as co-chairman of the House of Delegates' Appropriations Committee, said he thinks his Republican colleagues will support the governor's efforts to save the repeal of the car tax.

"It's a mandate from the people of Virginia, and I think we have an obligation to phase out the tax. But it may take a little bit longer than anticipated," Mr. Callahan said. "I think whatever the governor proposes the governor will get."

Secretary of Finance Ronald L. Tillett has been charged with finding room in an increasingly tight state budget to implement the repeal of the car tax.

Mr. Tillett said there are a number of scenarios that could address projected revenue shortfalls.

"Who's to say that the car tax is the first casualty?" Mr. Tillett said. "It's not automatically the first thing to go. Why should it be?"

Mr. Tillett said the projected growth rate of 3.2 percent is much lower than the 5.5 percent he and others had forecast months ago. Because of the drop in revenue, Mr. Gilmore has considered delaying the full phasing out of the car tax which has an annual price tag of about $1 billion for another year.

Currently, the state reimburses localities 47.5 percent of the car tax on the first $20,000 of a vehicle's assessed value, with taxpayers paying the rest. The state is supposed to reimburse 70 percent of the tax next year and 100 percent by 2002.

But Mr. Tillett said the governor remains committed to fully funding the repeal by 2002, even if that means cutting fat out of the budget.

"Maybe you don't start a program. Maybe you don't expand programs in the second year," said Mr. Tillett, who noted that Virginia is now in the middle of its biannual budget.

"It's not wrecking the budget. It does mean that we have to make appropriate adjustments," Mr. Gilmore said in a phone interview.

Revenue shortfalls also threaten full implementation of the rollback in the state's sales tax on foods. The 4.5 percent tax has already been cut to 4 percent, but the reduction to 3.5 percent originally set for April may have to be postponed, Mr. Tillett said.

The possibility of delaying full implementation of the car-tax repeal is also being discussed, Mr. Tillett said, but the governor and his staff are waiting on numbers from the holiday shopping season before making a final decision.

Mr. Gilmore's budget must be submitted by Dec. 20.

House Majority Leader H. Morgan Griffith, Salem Republican, said he doesn't mind scaling back some projects and programs to allow for the full repeal, but he said it will depend on the final growth projections.

"If we are close, I can see cutting some fat out of the budget," Mr. Griffith said, noting that if the final number is near 5.4 percent, he could see working the books. But if growth falls to 3.2 percent, the governor should look at delaying the full effect of the repeal, he said.

Such a delay, Mr. Griffith said, would not constitute a "break of a promise."

Delegate Clifton A. Woodrum, Roanoke Democrat, said he thinks Mr. Gilmore ought to rethink repealing the car tax.

"I certainly think that we have to look at postponing any implementation or even rolling it back," Mr. Woodrum said. "I think we have to come to our senses and realize that we can't do all of this. It seems like an emerging financial crisis."

Delegate Jay DeBoer, Petersburg Democrat, said Mr. Gilmore's admission is an "I-told-you-so moment."

"It's a great big pigeon that's come home to roost," Mr. DeBoer said.

The governor and the Republicans should prepare to suffer the political fallout, Mr. DeBoer and others said.

Mr. Gilmore's promise to repeal the car tax is closely identified with two other Republican officeholders weighing bids for the governor's post, Attorney General Mark L. Earley and Lt. Gov. John Hager.

Mr. Callahan said he isn't sure how either Mr. Hager or Mr. Earley should handle the issue, but he warned presumed Democratic gubernatorial candidate Mark R. Warner to avoid the subject.

"If he starts attacking it, he's dead meat," Mr. Callahan said.

Steve Jarding, Mr. Warner's chief of staff, said the Northern Virginia businessman understands that voters want the car tax repealed.

"I think this is an issue bigger than any candidate," Mr. Jarding said. "We don't have to make it an issue it already is one."

Mr. Jarding said if the car tax isn't repealed, there may be a voter backlash against both Mr. Hager and Mr. Earley, since they came in as a "team" with Mr. Gilmore.

"The potential is there," Mr. Jarding said.

Mark J. Rozell, a political science professor at Catholic University in the District of Columbia, agreed that voters will hold the GOP responsible.

"It's a thorny issue for the Republican ticket next year," Mr. Rozell said.

Quintin Kendall, Mr. Earley's campaign manager, said his candidate stands by the effort to repeal the car tax, acknowledging that it helped Mr. Earley ascend to his current post.

"There is no question that reducing and cutting the car tax was the cornerstone for victory for the entire Republican ticket," Mr. Kendall said. "If elected governor, he will work for full repeal of the car tax."

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