- The Washington Times - Tuesday, December 3, 2002

Richmond lawmakers say Virginia's car tax will be phased out by 2006, as scheduled, despite the state's budget crisis.
Gov. Mark R. Warner and leading legislators restated their support for the phaseout earlier this year, and neither the Democratic governor nor the Republican leadership in the General Assembly wants to be seen as backpedaling on the issue.
"Nobody is going to roll back the car tax," said House Appropriations Committee Chairman Vincent F. Callahan Jr., Fairfax Republican.
A spokeswoman for Mr. Warner echoed Mr. Callahan's comments yesterday.
"I think the governor feels that the car-tax debate has already happened in this Capitol and it is not something [he] is likely to wade into without significant legislative momentum," said Ellen Qualls, Mr. Warner's press secretary.
Some lawmakers, citing the state's worsening budget problems, have been critical of the commitment to the tax cuts.
Sen. Edward R. Houck, Spotsylvania Democrat, has suggested reducing the amount of the repeal in light of the budget mess.
"We should re-examine where we are with the car-tax refunds, because we are not collecting enough revenue" to refund at the present level, Mr. Houck said.
Virginia faces a budget shortfall of almost $1 billion. Mr. Warner is expected to announce Dec. 20 what would be his fourth round of budget cuts this year when he puts forward the budget package for next year.
Repealing the car tax, which varies according to local jurisdictions, was the signature issue of Republican James S. Gilmore III's successful campaign for governor in 1997. The following March, the General Assembly approved a phaseout plan that called for reducing the amount of money charged for cars over the next four years.
Money raised from the car tax goes to local jurisdictions. The state stepped up and began reimbursing the localities from the general fund to make up the difference from monies lost from the repeal of the tax. It was scheduled to be phased out by 2002. The state's financial fortunes began to falter in 2001, and the reimbursements were frozen at the 70 percent level, where they are expected to stay until 2004.
Mr. Houck has suggested bringing the refunds to the 47 percent level, which he estimates would save the state approximately $300 million annually.
When Mr. Warner took office earlier this year, he made a deal with legislative leaders, including then-Speaker S. Vance Wilkins, to have the entire phaseout in place by the time he left office in 2006. Although Mr. Wilkins is no longer in power, Speaker-designate William Howell, Stafford Republican, is adamant that the refunds will remain on schedule.
Repealing car-tax refunds "is not going to happen," Mr. Powell said.
Even Mr. Houck, who proposed similar legislation last year, is doubtful it will gather much steam this year.
"Many members are fearful of their re-election [in Nov. 2003]. They will talk about this privately, but few will talk publicly," he said.
When the law was passed, certain triggers were put in place to stop the refunds in the event the state could no longer live without the revenue.
The refunds cannot continue if in any single year the cost for the program exceeds 8 percent of the state's general fund or if revenue estimates for the year fall one-half percent below forecasts.

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