- The Washington Times - Thursday, November 29, 2001

Virginia Gov. James S. Gilmore III will include the full repeal of the state's car tax in the 2003-2004 biennial budget, despite delaying the cut this year because of a roughly $1 billion revenue shortfall, administration sources said yesterday.
The spending plan by Mr. Gilmore and Secretary of Finance John W. Forbes, which the Republican governor will present to the House and Senate budget-writing committees Dec. 19, "still gets rid of the car tax," sources said.
One administration source said Mr. Gilmore was considering calling for the full phaseout to go into effect at the end of fiscal 2004.
The budget will need to be balanced, as the constitution mandates, and that likely will mean some spending cuts, sources said. They did not say whether those cuts would be used to pay for the car-tax cut.
Mr. Forbes would not comment on the car tax or on specific contents of the budget, saying only that Mr. Gilmore "wants to put money in the pockets" of taxpayers.
On Nov. 15, Mr. Gilmore declared that the state was in a recession, called for state agencies to reduce spending by 2 percent and suggested he would "include the final phase of car-tax relief in the 2003 or 2004 budget."
Economic forecasts for 2003 and 2004 are based on the assumption that the recession will not last beyond the summer.
Mr. Forbes said the state is "not looking at recovery till summer "
"We're in dire straits," he said.
The financial picture is so gloomy, budget planners are considering dipping into the nearly $1 billion "rainy-day" fund to cover the budget shortfall.
But Delegate Vincent F. Callahan, Fairfax Republican and chairman of the House Appropriations Committee, said he is cautiously optimistic the car tax can be fully repealed in the next budget "if the budget revenue projections" justify it.
Currently, the state pays 70 percent of the car tax on the first $20,000 of a vehicle's assessed value. The state was to pay 100 percent of the car tax next year, but declining revenues spurred by the September 11 terrorist attacks legally mandated a freeze at 70 percent, leaving taxpayers to pay the other 30 percent.
When the car tax is phased out, it will cost the state about $1 billion a year.
It will be up to Gov.-elect Mark R. Warner, a Democrat, and the Republican-controlled General Assembly to amend the two-year budget, and some lawmakers and observers have questioned Mr. Gilmore's reasons for including the car-tax cut in his proposal.
"He is going to force the new governor and the legislature to make the tough decisions and balance the budget with the revenue that we actually have," said Delegate John A. "Jack" Rollison, Prince William Republican. "You can only go so far in predicting."
Mr. Rollison said that he is "100 percent supportive" of cutting the car tax as long as revenue can be found while balancing the budget.
During this year's legislative session, disagreement between Mr. Gilmore and the state Senate about the car-tax cut led to a historic stalemate. Mr. Gilmore insisted on a 70 percent rebate and threatened to veto any budget that called for a smaller one; the Senate, citing the slowing economy, proposed advancing the rebate from last year's 47.5 percent to 55 percent.
When the assembly failed to amend the budget, the rebate moved to 70 percent and Mr. Gilmore had to make about $420 million in cuts.
Delegate Brian Moran, Alexandria Democrat, said he does not want a repeat of last year's session and acknowledged the car-tax cut is going to be a tough issue.
"This was one of the bombs we were concerned [about] with [Mr. Gilmore] leaving," Mr. Moran said. "It poses a challenge to the governor-elect to balance the books."
Calls to Mr. Warner's transition office were not returned.
A newly elected lawmaker who asked not be identified said, "[Mr. Gilmore] is going to put us on the record" for supporting the car tax or not.
Stephen K. Medvic, a political science professor at Old Dominion University in Norfolk, said that including the car-tax cut in the budget allows Mr. Gilmore to claim he kept his campaign promise of eliminating it, while putting Mr. Warner on the spot.
"To put it in there is blatantly political," Mr. Medvic said.

Copyright © 2019 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