- The Washington Times - Sunday, June 13, 2004

RICHMOND — When does a brightening economy give rise to a grievance?

Legislative Republicans who opposed a $1.4 billion tax increase this year contend that Gov. Mark Warner, a Democrat, knew better times would create a sizable revenue surplus, but issued dire predictions nonetheless to make the case for new taxes.

Expect the Republicans to press their claims Wednesday in a single-day reconvened session to consider Mr. Warner’s amendments to Virginia’s new $60 billion two-year budget. It is the first time lawmakers have gathered since learning that the current budget will expire this month with millions in the bank.

“I don’t know that there will be any concerted effort to stand up and say, ‘I told you so,’ even though we told you so,” said House Speaker William J. Howell, Stafford County Republican and a consistent foe of the tax increase.

The Warner administration and House Democrats say Republicans who opposed the tax package over the winter and spring were either clueless then not to know of buoyant March and April tax collections or disingenuous now in claiming that they were snookered.

“That’s sheer poppycock,” said House Minority Leader Franklin P. Hall, Richmond Democrat. “They knew what the numbers were almost immediately when the governor knew.”

“That information was accessible and in their possession the same time it was for the governor,” said Delegate Brian J. Moran, Alexandria Democrat who is chairman of the House Democratic Caucus. “Their last-minute, Monday-morning quarterbacking is unfair and inaccurate.”

The budget-writing committees of the House and the Senate have access to the same daily tax-collection data as the administration.

In March and April, general-fund revenues were 22.5 percent ahead of the same two months the previous year. May revenues, released Friday, were more modest — up 7.3 percent — but still good enough to boost year-to-date tax collections by 9.3 percent with one month left in the fiscal year.

The current budget assumes annual revenue growth of 6.7 percent. If revenues exceed that estimate by two percentage points, the administration estimates that state government would realize a surplus of $200 million to $250 million.

Virginia’s economy is growing robustly, Mr. Warner’s top finance advisers say, but they warn that banking on sustained windfalls the size of those in March and April is foolhardy, and that the new tax package is necessary for the state’s long-term fiscal fitness.

“It is disappointing that there are still some lawmakers who are willing to bet Virginia’s future on the economic performance of a single month,” said Kevin Hall, the governor’s deputy press secretary.

“These guys just don’t get it. Instead of offering solutions, this vocal and extreme minority resorts to campaign-style attacks that simply do not stand up when you compare it to the responsible approach taken by Governor Warner and bipartisan majorities in both the House and the Senate,” he said.

Mr. Warner has been on a trade mission in Asia the past week and was not available for comment.

Divided and stung by a legislative defeat that division made possible, House Republicans and the party in general seek a rallying point. At the party’s state convention last week, former Gov. James S. Gilmore III exhorted his fellow conservatives in a fiery speech that accused Mr. Warner of using “deceit” to create a public furor and split the House Republican majority.

House Republican Caucus Chairman R. Steven Landes, Augusta Republican, said it is “almost a pattern with the governor” to hide his intentions.

“He didn’t tell people last year before the legislative elections that he wanted to raise taxes. During the budget debate, we weren’t told what the revenue figures were going to be, and I assume they had to know,” Mr. Landes said.

“Many of us were making the argument during the regular and special sessions of the strength of the economy, and it’s clear now that the Virginia economy is doing better than the national average,” Mr. Landes said. “I’ve been talking to civic groups and they ask me if we knew there was going to be a surplus, why’d we do all these additional taxes.”

Several House Republican conservatives have said they hope to roll back some of the tax increases next year, and they are particularly determined to thaw the freeze placed on the car-tax phaseout.

Cutting the local property tax on personal cars and trucks was Mr. Gilmore’s signature legislative achievement, but the cost of continuing the phaseout has grown well past its initial estimates. If completed now, the drain on the state’s budget would come to about $1.4 billion annually, so lawmakers this year capped state car tax outlays at $950 million.

House Republicans will get a second chance this week to assail Mr. Warner and his Republican and Democratic allies in the Senate who once championed tax increases totaling $4 billion. The House’s exclusively Republican “cost-cutting caucus” has scheduled a two-day retreat beginning Friday in Reston.

The caucus made an exception this year, inviting just one Democrat: former Gov. L. Douglas Wilder, Friday’s dinner keynoter. In March, Mr. Wilder joined U.S. Sen. George Allen and state Attorney General Jerry W. Kilgore, both Republicans, in urging lawmakers to pass a budget with only the revenues on hand, then let voters decide later in a referendum whether to raise taxes.

Mr. Wilder didn’t get his way, either.

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