Wednesday, February 14, 2001

RICHMOND Both Republicans running for Virginia governor are hoping a firm stand on moving the car-tax rebate to 70 percent this year pays off at the ballot box come November.

Attorney General Mark L. Earley and Lt. Gov. John H. Hager, who are competing for the Republican gubernatorial nomination, have come out in strong support of Gov. James S. Gilmore III’s schedule to move the car-tax rebate from 47.5 percent to 70 percent this year and 100 percent next year.

The House of Delegates has supported the governor, but the state Senate has balked, arguing that the rebate should be 50 percent, with the rest of the money used to pay for programs the governor and House paid for through bonds.

Seeing the car-tax cut through is his biggest priority of the session, Mr. Hager has declared. He said yesterday he is confident the rebate will stand at 70 percent by the time the legislature and governor complete the budget, leaving the next governor the task of going to 100 percent.

“We’ve got to make the case; we’ve got to finish the job,” he said.

Mr. Earley has weighed in with an advisory opinion, requested by the Department of Motor Vehicles, that says any locality that mails out car-tax bills before July 1 has to include a 70 percent rebate.

The letter is already having an effect, as Loudoun County officials decided yesterday after seeing the opinion that they will send out bills with a 70 percent rebate included, Treasurer H. Roger Zurn Jr. said.

Strategists say Republicans hope to be able to use the car-tax issue against Democratic presumptive gubernatorial nominee Mark R. Warner, an Alexandria businessman.

“If the Democrats want to have another fight over the car tax, we’re more than happy to accommodate them,” said Ed Matricardi, executive director of the Republican Party of Virginia.

The only problem: Mr. Warner isn’t jumping into the legislative debate, making it difficult for Republicans trying to pin him down to a position. In 1997, he came out opposed to the tax cut, but he has said in recent statements he supports the tax cut as long as there’s enough money to do it responsibly.

“[Mr. Warner] is committed to eliminating the car tax. The people of Virginia have been very clear, and he supports their wishes,” said Mo Elleithee, spokesman for Mr. Warner. “The question of how it’s done is one that we need to look at very closely, and one that, as governor, he’ll be committed to exploring to make sure it’s done in a fiscally responsible way.”

Republicans argue that’s not clear enough, so they are trying to bait Mr. Warner into taking a stand.

“Mark Warner can’t be trusted on the car tax couldn’t be trusted in 1997, can’t be trusted now,” Mr. Matricardi said. “It’s very important to the people of Virginia that the next governor be a stalwart on the car tax. Otherwise, the General Assembly will force him into retreat.”

But Mr. Warner’s wait-and-see approach gives him options in his attack against his eventual Republican opponent. If the rebate goes through at 70 percent and programs have to be cut, he can argue that the cuts were imprudent. If the rebate goes through at less than 70 percent, he can say that Republicans broke their promise.

With the governor and many others in the GOP saying anything less than a 70 percent rebate amounts to a tax increase, Republicans say failing to deliver that would hurt them.

“Certainly there are voters out there who expect us to keep our promises, so sure,” Mr. Hager said.

“If the grand compromise is that Republicans all get together and increase taxes, that’s a disaster,” a Republican campaign strategist said.

That the car tax remains a powerful campaign issue was underscored by the fact that all four Democratic delegates running for statewide office voted for the House budget that included a 70 percent rebate, as did the one Republican.

In the Senate, the one Republican seeking higher office voted against the budget, which moved the rebate to 50 percent, while the one Democrat running for a statewide office voted for it.

Mr. Gilmore’s political consultants floated numbers yesterday from a poll they paid for that shows strong support for continuing the tax cut, even if it meant cutting services.

Depending on how the questions were posed, a core group of between 60 and 65 percent of respondents in the poll of 600 likely gubernatorial voters taken between Jan. 23 and 25 said they would like to see government cut and the tax rebate continued, rather than the tax cut frozen and spending increased.

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