- The Washington Times - Tuesday, August 21, 2001

Virginia's latest revenue figures are "promising," according to Gov. James S. Gilmore III, who told lawmakers in Richmond yesterday the state has enough money to fully phase out the car tax and fund stalled education construction projects without tapping into a nearly $1 billion rainy-day fund.
In a presentation to the General Assembly's money committees, Mr. Gilmore said Virginia remains one of the best fiscally managed states in the country.
"Although the present looks dark and difficult for many states, in Virginia we are still growing and leading, and our future is alight with hope and promise," Mr. Gilmore said, noting that "this is a time of economic uncertainty for both the nation and the world."
The governor's assessment of the state's economic outlook was greeted with skepticism by the chairman of the Senate Finance Committee, Sen. John H. Chichester. The Stafford Republican led efforts earlier this year to scale back the governor's car-tax cut.
"We have overextended ourselves in light of Virginia's economic slowdown," Mr. Chichester told his committee at a separate meeting after the governor briefed all three legislative money panels.
Mr. Gilmore, a Republican and chairman of the Republican National Committee, pointed out that four other states have had to raise taxes, North Carolina has had to lay off state employees, and at least 10 other states have dipped into rainy-day funds to cover budget shortfalls.
Virginia has had to do none of that, he said, adding that there is enough money in the state treasury to restart college construction projects that were frozen because of a budget impasse last winter.
That deadlock was between Mr. Gilmore and the Republican-controlled Senate over how much of the car tax would be cut. Mr. Gilmore wanted to deliver the 70 percent cut he had promised during his campaign for the state's highest office. The Republican-led House of Delegates backed the governor, but the Senate held out for a more modest tax cut of 55 percent.
Because no compromise could be reached, $421 million worth of programs and services, including the college construction, were cut or put on hold to balance the biennial budget.
The car tax, which is actually a reimbursement by the state to localities that impose the tax, is to be fully phased out by next year at a cost of $1.5 billion annually.
Mr. Gilmore said the state was on track to add $187 million to the rainy-day fund, pushing the amount with interest to $940 million.
The state's revenue growth target projected by the Gilmore administration was 3.8 percent. It missed that mark by 0.5 percent, Mr. Gilmore said.
Appropriations Committee Chairman Delegate Vincent F. Callahan, Fairfax Republican, said he was pleased with the administration's assessment of Virginia's fiscal health.
"It's very good forecasting when you can be within one half of one percent," Mr. Callahan said. "We're in pretty good shape when compared to other states."
Mr. Callahan said Mr. Chichester was simply "trying to second guess" the governor when "not all of the numbers are in."
Delegate Thelma Drake, a Norfolk Republican who sits on the House Finance Committee, said she was pleased with the governor's numbers, especially because more money is going into the rainy-day fund. The Gilmore administration's fiscal outlook, she said, shows that tax relief is part of good fiscal management.
"The numbers show us that we can still get the car tax done and be fiscally responsible," Mrs. Drake said.
Mr. Gilmore also said yesterday he will release funds for $191 million worth of stalled college construction projects.
The governor singled out the $10 million Peters Hall project, an academic building at Radford University in Southwest Virginia.
"We can restore funding for Peters Hall and other critical projects on our college campuses because we have wisely managed our finances," Mr. Gilmore said.
Mr. Gilmore is scheduled to make an appearance this morning at George Mason University in Fairfax to outline other revived college building projects.
Delegate Brian J. Moran, Alexandria Democrat, said Mr. Gilmore has an "obsession" with the car-tax cut and will say or do just about anything to present Virginia's finances as healthy enough to maintain the signature issue that swept Mr. Gilmore to power in 1997.
"He's not going to create a realistic picture" of state finances, Mr. Moran said, adding that in offering overly optimistic revenue projections, Mr. Gilmore's administration "loses their credibility."
Mr. Gilmore announced yesterday that Northern Virginia seems to be weathering the financial storm better than any other region of the state, especially with a 5.1 percent job-rate growth.
But Mr. Moran cautioned that even though "Northern Virginia is still driving the train" of the state's economy, the good times may soon come to an end. Recent layoffs at America Online and other high-tech firms in the state's wealthy Washington suburbs could be a sign of things to come.
"Even we're starting to slow down — it's going to be disastrous for the rest of the state," Mr. Moran said.


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide