Sunday, August 10, 2003

Long before Howard Dean surged in the polls and appeared on the covers of Time and Newsweek, Republicans were digging into his tax record as governor of Vermont.

While his hard-line, anti-war position on Iraq (and what many took as his suggestion that the Iraqis were no better off without Saddam Hussein) give the White House ample ammunition to challenge him on national security grounds, Vermont’s tax burden is an even more damaging issue, say Republican officials.

I’ve been doing my own checking into Mr. Dean’s record in his 11 years as governor, and the bottom line is this: When he left his governorship in January to run for president, Vermont had one of the highest tax rates in the country.

Mr. Dean legitimately boasts about his budget-balancing record. Vermont is the only state that does not require by law that budgets be balanced. He built a reputation of holding the line on the growth of spending. And despite the three-year economic downturn that left most states in the red, he left his successor with a budget surplus.

What Mr. Dean does not say is that he raised a lot of taxes, too, to help pay for his social welfare programs and to balance the books: sales taxes, cigarette taxes, property taxes, corporate taxes, and hotel and meal taxes, among others.

His biggest tax increase was in 1997, when he signed an education-funding bill that raised property taxes in wealthier communities to redistribute the money to poorer schools. It nearly cost him re-election in 1998.

Congressional Quarterly’s Governing magazine, based on data from the U.S. Census Bureau, reports that Vermont was the third-highest of the 50 states in the amount of tax revenue collected as a percentage of personal income in 2001.

Yet another ranking in June by the Government Finance Officers Association put Vermont in 12th place in combined state and local tax burdens — far ahead of larger industrial states like New Jersey, Michigan and Illinois. Other rankings, using different tax burden methodologies have put Vermont in first place.

State spending also rose sharply from $662 million in 1991 to $1.8 billion last year under Mr. Dean’s policies. And, between 1997 and 2002, population growth and inflation combined rose by 18.1 percent, while spending went up by 51.7 percent.

But with only 610,000 residents (about the size of Austin, Texas), Vermont does not have the problems much larger states do.

“Roughly 20 percent of the population does not depend upon jobs for income, people who are trust funders or independently wealthy,” says Michael Quaid, executive director of Vermonters for Tax Reform.

During his statehouse years, Mr. Dean had a reputation as an enigmatic politician. He calls himself a “fiscal conservative,” and business leaders acknowledge that he fought his party’s liberals to keep the personal income tax from rising.

But he is a ferocious pro-government interventionist, pushing for universal health care (which he partially achieved), child-care subsidies, minimum-wage increases, liberal family-leave benefits and public financing for campaigns. One of his most controversial actions: signing a bill to give same-sex couples civil-union licenses.

Mr. Dean’s iconoclastic tax-and-spend record can be seen in the scores he received from the Cato Institute, a libertarian think tank that tracks each state’s fiscal performance. From 1996 to 2002, his grades slid from a “B” to a “D.”

In his defense, Mr. Dean points to his support of electricity deregulation, limited school-choice experiments and his 2000 “A” grade from the National Rifle Association (though he opposes a bill to make gun manufacturers immune from lawsuits and wants background checks for purchasers at gun shows).

Despite these positions and his budget-balancing record, he is a big-government Democrat with grandiose plans for universal, federally financed health care that he would fund by repealing all of President Bush’s tax cuts. That means raising taxes for everyone who pays them.

“There’s no tendency toward smaller government with Howard Dean,” says John McClaughry, president of the Ethan Allen Institute, a Vermont think tank.

Mr. Dean is riding high right now, surging ahead of Missouri Rep. Richard Gephardt in Iowa and tied with Massachusetts Sen. John Kerry in New Hampshire. But many Democrats think he is unelectable because of his opposition to the anti-terrorism war in Iraq and his weak posture on national security issues.

If that alone is not enough to undercut his presidential ambitions, surely his role in making Vermont one of the heaviest taxed states in the country will finish him off.

Donald Lambro, chief political correspondent of The Washington Times, is a nationally syndicated columnist.

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