- The Washington Times - Wednesday, April 18, 2001

Two Northern Virginia state senators sued yesterday to try to stop the car-tax rebate from going to 70 percent this year.
Sens. Richard L. Saslaw, Fairfax Democrat, and Warren E. Barry, Fairfax Republican, claim Gov. James S. Gilmore III didnt meet the technical requirements to allow the states share of car owners bills to advance to 70 percent this year. They — along with two businessmen, a former college president and a lawyer are asking a circuit court in Richmond to freeze the rebate at last years 47.5 percent level.
The suit could further confuse the fate of the car tax and efforts to resolve the current impasse on amendments to the states two-year budget.
"Because theres a budget impasse and the governors going to have a free hand once were out of town, we felt it was imperative to find out if the governor is operating outside the law," said Mr. Barry, Fairfax Republican.
The legislature adjourned Feb. 24 without amending the two-year budget it passed last year. The two chambers deadlocked over the size of the states rebate on the personal property tax on cars: A majority of delegates agreed with the governor that it should stay on schedule at 70 percent this year, but most senators wanted only a 55 percent rebate.
As long as there is no agreement, the 70 percent car-tax rebate remains law, but the governor is charged with balancing the rest of the budget. He has proposed $421 million in cuts, mostly by freezing construction projects. But no budget agreement also means no money for pay raises for public employees and no money for some state-supported museums and parks.
Mr. Barry said he hopes the suit helps bring about a compromise on the budget, and that going to the courts was an appropriate option.
Mr. Gilmore, answering reporters questions at a news conference, said he has followed the law.
"I think the suit is just another example of the Democratic leadership and some of the Republicans joining together with some people that they know in order to try to block car-tax relief for the people of Virginia," Mr. Gilmore said.
The 1998 law phasing out the car tax over five years requires that revenue grow 5 percent more than the previous year for each phase to take effect. The administration forecast that the states tax revenues will grow at 3.8 percent this fiscal year, but Mr. Gilmore proposed to take the states income over the next 20 years from the settlement with tobacco companies in an up-front payment, thus boosting expected revenue over the 5 percent mark and allowing the next phase of the car tax.
The lawsuit says the rebate should be frozen at last years level because the governor failed to meet technical requirements for notifying state officials and a state economic advisory board of his plan to boost the revenue forecast, a violation of the laws requirements.
The lawsuit also claims that the governor didnt provide full details of the securitization plan in his Dec. 20 briefing, which the suit says is another requirement the governor didnt meet. But the bill enacting securitization was filed that day, before the governors official budget presentation, said Delegate John H. "Jack" Rust Jr., Fairfax Republican and the bills sponsor.
Attorney General Mark L. Earley has already opined in a Feb. 9 letter that the governor met the laws requirements for the next phase of the car-tax rebate.
The suit isnt a surprise — many lawmakers had expected it back in January, when the car-tax issue first heated up — but the timing made backers of the 70 percent rebate question the motive for filing it.
"What the Senate did was they knew on Dec. 20 they didnt like this, and they waited until April 17 to file a lawsuit. That indicates to me they dont feel comfortable with their lawsuit," said House Majority Leader H. Morgan Griffith, Salem Republican.
Others saw it as a way to confuse the situation.
The suit doesnt request immediate action, and Delegate Robert F. McDonnell, Virginia Beach Republican, said without that the suit is essentially an intellectual exercise without practical effect since the car-tax bills will be out and the issue will be decided long before it gets to a judge.
More than a dozen large jurisdictions are scheduled to print and mail their car-tax bills within the next 10 days, and if those bills go out showing the state paying a 70 percent rebate it becomes politically impossible to stop the rebate, House members argue.
For now, discussions between House and Senate leaders continue, but an agreement seems no closer than before. Neither side is willing to move, though the House seems to be unifying behind a proposal that addresses many Senate complaints while also maintaining a 70 percent rebate.
That proposal got a boost yesterday when Ted Martin, president of the Virginia Governmental Employees Association, endorsed it at a news conference.

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