Election year clouds Virginia’s fiscal picture

It is hard to believe that this time last year the Republican-controlled Virginia General Assembly and Gov. Mark Warner, a Democrat, were at such odds about how to handle a projected doomsday deficit.

So contentious was the tax-and-spend debate that the Old Dominion’s legislature was forced to hold its representatives for an unprecedented and costly session that lasted 115 days.

What a difference a year makes.

Now we are told that Virginia is swimming in a $1 billion surplus. No wonder the public is hard-pressed to believe bureaucratic budgeters who predict a thorny picture one year and a rosy one the next.

As long as I’ve been watching the legislative budget process at every level of government, I’ve come to the conclusion that politics, not numbers, is the biggest determinant of the budget process.

Thank the hot housing market in the D.C. area, in large part, for the projections that also helped to fill the coffers of the District and its immediate neighbors.

Still, taxpayers need to be wary of self-serving politicians with a few extra bucks to bandy around, most especially in an election year.

Indeed, all the major statewide offices and every seat in both chambers of the General Assembly are up for grabs.

“Just remember, guys, it’s an election year,” House Minority Leader Franklin P. Hall, Richmond Democrat, told his party colleagues earlier this week. “I don’t think we need to go any further than that to explain what we’re seeing.”

What every Virginian is seeing is his representatives promising questionable tax cuts based on the current rosy budget projections.

As expected, the General Assembly again raises the prospect of phasing out the unpopular car tax and the tax on groceries. Virginia legislators have been promising to phase out the food tax for four decades. So far, they have managed a half-cent cut before bleak financial predictions froze their promises. The cap on phasing out the car tax remains intact, too.

No doubt there will be much debate about the financial feasibility of phasing out the car tax as James S. Gilmore III pledged in 1997 to win the governorship. He promised it would take six years to eliminate the levy, which is a dedicated stream of revenue for local governments. Mr. Gilmore’s projections, as we now know, were woefully wrong.

House Appropriations Committee Chairman Vincent F. Callahan Jr., Fairfax Republican, wants to use the budget surplus to jump-start car-tax relief, suggesting it would take another six years to honor Mr. Gilmore’s promise.

Meanwhile, Mr. Warner and his friends in the Virginia Senate have their eyes on the present surplus to honor other commitments to education, health care and public safety.

“Everyone was on the same page for many months in support of fiscal restraint. I guess election-year pressures are mounting, and Virginians should be wary of a predictable onslaught of promises of a free lunch once again,” Mr. Warner said.

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