- The Washington Times - Wednesday, August 11, 2004

Virginia House Speaker William J. Howell said yesterday he will support efforts to lift the cap on the state’s car-tax-relief program in light of a budget surplus he expects could reach as high as $800 million over two years.

Mr. Howell, Stafford County Republican, said the car tax on Virginia drivers is “incredibly unpopular” and “unfair.”

“I’d like to be done with the car tax, and I’d like to see the caps come off,” Mr. Howell said during a meeting with editors and reporters at The Washington Times. “It’s going to be difficult to take the cap off the car tax, because of the makeup of the Senate and because of the governor’s veto power, but I think it’s something you’ll probably see in the House.”

The Senate, which favors higher taxes, has said any efforts to lift the cap will be rejected unless other taxes are increased to pay for the full phaseout of the car tax.

Mr. Howell also said he believes the car-tax program is “convoluted,” since local governments send the state a bill and the state then cuts them checks.

He said he would rather amend the state constitution to abolish the car tax and replace it with a system in which local governments would receive a certain percentage of the income tax raised by the state. “It’s not creating any new tax,” he said.

Mr. Howell’s comments come as Virginians are beginning to receive their annual car-tax bills, which are due Oct. 5.

Mr. Howell opposed the cap, which freezes the amount the state reimburses localities at $950 million a year for revenue lost under the car-tax phaseout created by Republican Gov. James S. Gilmore III in 1998. As a result, Virginia vehicle owners are likely to pay higher car-tax bills beginning in 2006.

Under the cap, car owners will continue to pay 30 percent of their tax bills for at least two years.

Earlier this year, the Republican-controlled legislature approved the cap as part of a plan that raised the state sales, cigarette and real estate taxes by $1.38 billion and lowered others.

Mr. Howell still questions the necessity to raise taxes and freeze the car tax since the statereported a $323.8 million budget surplus this year. Mr. Howell said he expects a surplus of between $400 million and $800 million over the next two years as the economy rebounds.

Mr. Howell said his constituents also question the tax increase. “People know we had a very significant tax increase and then they see two weeks later the state has a $324 million surplus and that doesn’t add up to them, nor to me,” he said.

During next year’s legislative session, Mr. Howell said he hopes to accomplish malpractice and tort reform. He wants Gov. Mark Warner, a Democrat, to help work on the efforts.

“I would hope that we can have the governor’s support on those issues,” he said. “The malpractice situation is not at the crisis level of a lot of other states, but it’s something that’s a real problem.”

Mr. Warner has said he wants to see government reform implemented before he leaves office in January 2006.

Mr. Howell said the state should offer tax credits so students in poor neighborhoods can attend private schools. He said the state has had weak laws regarding charter schools, which must be approved by local school boards.

“We’ve got to do something to address those problems,” he said. “Tax credits and charter schools is a good way to approach it.”

Mr. Howell also blamed high tuition rates at colleges and universities on “over-regulation” of the schools by the state. For example, the state has an employee who approves tent applications for college campuses who want to hold outdoor activities, he said.

“There’s all this regulation from the state that I don’t think is necessary,” he said. “It’s costing money and time.”

Mr. Howell also wants to create charter university status for some state colleges, a system where the schools accept less money from the state if restrictions on out-of-state enrollment and tuition are lifted.

“That’s a good thing that the governor can help us with if he can be supportive of those kinds of things,” he said.

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