- The Washington Times - Monday, October 28, 2002

As one debater recently put it, Northern Virginia will have the opportunity on Nov. 5 to vote to increase sales taxes in that region by 11 percent, with the increase to be devoted to area transportation projects.
But Virginians already pay more than enough in taxes to finance a basic government service like roads and highways. From 1997 to 2001, the total state operating budget increased by more than a third, 36 percent, in just four years. The budget adopted in the spring for the current fiscal year was up an additional 7 percent. That budget was an all-time record for state spending, the highest in history.
Now Gov. Mark R. Warner finds he is short money to fund that full increase because of the weak economy. But all the cuts and shortfalls he talks about are merely reductions from that attempted increase.
In normal times, after the economy recovers, the state only needs to moderate slightly the trend in most recent years of rapid, runaway, total spending increases on everything else, and use the savings for essential transportation needs. Revenues from the proposed sales tax increase are projected by the state to be equal to about one-half of 1 percent of total state spending each year.
So if total state spending growth was just restrained by a modest one-half of 1 percent each year, the savings would be enough to finance all of the transportation projects to be financed by the tax increase. For example, instead of a budget increase of 7 percent, the state would adopt an increase of 6.5 percent, and then devote the savings to transportation.
Those who say this can't be done are really endorsing the rapid spending increases of recent years. They are saying those increases are not only necessary and desirable, but must be continued into future years. Indeed, by supporting the tax increase for more transportation spending, they are actually calling for total state spending to increase even faster in the future.
The whole point of the referendum is, in fact, to provide money for transportation without having to cut back the recent rapid increases in spending on everything else. You should support the referendum only if you want to see those runaway spending increases continue unabated.
Nevertheless, some Northern Virginia Republicans are avidly campaigning for the tax increase, including House Transportation Committee Chairman Jack Rollison and House Majority Leader Jeannemarie Devolites. In doing so, they are effectively espousing national Democratic economic policy. They are Virginia's tax collectors for the welfare state.
Indeed, these Republicans are undermining President Bush and his tax-cut program. For if the referendum passes, Democrats on Capitol Hill will say it shows that voters understand we need more taxes and spending, and that Mr. Bush's tax cuts should be cut back or eliminated. Moreover, in siding with Mr. Warner on this, these Republicans are undermining Sen. George Allen, who ultimately will likely be challenged by Mr. Warner.
Virginia's state and local taxes actually grew 26 percent faster than personal income throughout the 1990s. Recent budgets have continued that trend. This is quite oppressive to taxpayers, because it means that taxes are taking a bigger portion of their incomes each year. That will also greatly undermine the economy over the long run. So, the growth in Virginia taxes has to be slowed down, not increased even faster.
Besides representing awful fiscal and economic policy, the referendum proposal is a con game. The state already increased sales taxes by one half cent per dollar in 1986, with the funds to be devoted to transportation. But this year, the state diverted most of those funds out of transportation to general spending to cover a budget gap, the third time that has been done. Mr. Warner has publicly refused to pledge not to do that again.
How can they ask us to increase taxes for transportation when they are looting what we are already paying for transportation? Moreover, if Northern Virginia is fooled into voting for this tax increase, the legislature will likely reduce what it would otherwise spend in the region out of other state transportation funds.
The rest of the state will argue that Northern Virginia already has plenty of transportation funding from the sales tax increase and that the state should spend more elsewhere. State officials have already been caught in other regions saying they will do this and, in fact, such diversion has already begun.
Perhaps the slogan for the referendum should be: "There's a sucker born every minute."
The referendum has long been promoted by a cabal of developers and their contractors, bankers, lawyers and lobbyists, who have contributed more than a million dollars for its passage. They want the tax money to be used to promote their development of western Fairfax, Loudoun and Prince William counties like they have developed eastern Fairfax.
That is why environmental groups are opposing the referendum so fiercely. But, in any event, working people should not have to pay higher taxes to promote the schemes of rich developers.
All of this will be discussed tonight by Jack Kemp and Chris Miller of the Piedmont Environmental Council at a Club for Growth event at the McLean Community Center.

Peter Ferrara is president of the Virginia Club for Growth.

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