Kaine defends urging tax hike in final budget

RICHMOND | Virginia Gov. Tim Kaine said Wednesday that a 1 percentage point increase in the state’s income tax that he has proposed in his final weeks in office is the most responsible way to make up a nearly $2 billion shortfall in the state’s finances.

“I think the only other alternatives are draconian cuts that would squander Virginia’s leadership position or kind of gimmicky ‘Let’s take a bunch of money out of the retirement fund’ or ‘Let’s pull out the credit card and borrow a bunch of money.’ But I think that would threaten our AAA bond rating,” Mr. Kaine told The Washington Times in an interview at the governor’s mansion.

Mr. Kaine said the budget he is handing off to Gov.-elect Robert F. McDonnell, a Republican, is one he would have drafted for his own administration or for the Democratic candidate, if state Sen. R. Creigh Deeds had won the November gubernatorial election. Mr. McDonnell has said that he will not impose new taxes, and while Mr. Kaine said he respects the budget process, he also said he thinks there is no way around the tax increase.

“I cut $7 billion, and then I cut $2.3 billion in the last round, but I realized for the last $1.8 billion I thought cutting would hurt Virginia. It would hurt our AAA [rating]; it would hurt our leadership position,” he said.

A relaxed Mr. Kaine, wearing a sport jacket, blue jeans and an open-collared shirt, ticked off the accomplishments of his four years in office that will come to an end when Mr. McDonnell is sworn in as Virginia governor on Jan. 16.

“I feel like I’m putting the keys of the state in the hands of my successor, and I’m able to say ‘AAA, best managed, best state for business, we’re the best state for children to be raised in. We’re the leading state in the United States’ and I’m handing it over to the next governor,” Mr. Kaine said.

Mr. Kaine said he did not complete the agenda he set for himself when he took office.

His administration lacks a signature legislative accomplishment similar to that of his predecessor, Mark R. Warner, who ushered a $1.38 billion tax increase through the General Assembly in 2004. Mr. Kaine’s own multibillion tax package to fund transportation collapsed in 2007. The plan involved regional taxing authorities, which were deemed unconstitutional, and the so-called “abuser fees” on bad drivers, which proved overwhelmingly unpopular.

But Mr. Kaine said he effectively guided the state through an unforeseen national economic downturn and lived up to the “audacious motto” he chose upon taking office: “Virginia Leading the Way.

He pointed out that he enticed five Fortune 500 companies to relocate to the state, maintained one of the lowest unemployment rates and one of the highest median incomes, achieved high student test scores and brought to Virginia a new relevance in national politics.

With President Obama’s victory last year in Virginia, Mr. Kaine said it is assured that “neither party will take Virginia for granted now for the next couple of decades.”

Before Mr. Obama’s win, a candidate could ignore the state and then upon taking office see no reason to cater to Virginians. He said that has changed.

For a variety of reasons, including his tenure as chairman of the Democratic National Committee, Mr. Kaine said he has been welcomed in the room when important talks that impact the state’s future have taken place.

And it was the election of Mr. Obama that provided Mr. Kaine his happiest moment as governor.

“My happiest day in the last four years,” he said of Election Day 2008.

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