- The Washington Times - Thursday, January 27, 2005

It is hard to believe that this time last year the Republican-controlled Virginia General Assembly and Gov. Mark Warner, a Democrat, were at such odds about how to handle a projected doomsday deficit.

So contentious was the tax-and-spend debate that the Old Dominion’s legislature was forced to hold its representatives for an unprecedented and costly session that lasted 115 days.

What a difference a year makes.

Now we are told that Virginia is swimming in a $1 billion surplus. No wonder the public is hard-pressed to believe bureaucratic budgeters who predict a thorny picture one year and a rosy one the next.

As long as I’ve been watching the legislative budget process at every level of government, I’ve come to the conclusion that politics, not numbers, is the biggest determinant of the budget process.

Thank the hot housing market in the D.C. area, in large part, for the projections that also helped to fill the coffers of the District and its immediate neighbors.

Still, taxpayers need to be wary of self-serving politicians with a few extra bucks to bandy around, most especially in an election year.

Indeed, all the major statewide offices and every seat in both chambers of the General Assembly are up for grabs.

“Just remember, guys, it’s an election year,” House Minority Leader Franklin P. Hall, Richmond Democrat, told his party colleagues earlier this week. “I don’t think we need to go any further than that to explain what we’re seeing.”

What every Virginian is seeing is his representatives promising questionable tax cuts based on the current rosy budget projections.

As expected, the General Assembly again raises the prospect of phasing out the unpopular car tax and the tax on groceries. Virginia legislators have been promising to phase out the food tax for four decades. So far, they have managed a half-cent cut before bleak financial predictions froze their promises. The cap on phasing out the car tax remains intact, too.

No doubt there will be much debate about the financial feasibility of phasing out the car tax as James S. Gilmore III pledged in 1997 to win the governorship. He promised it would take six years to eliminate the levy, which is a dedicated stream of revenue for local governments. Mr. Gilmore’s projections, as we now know, were woefully wrong.

House Appropriations Committee Chairman Vincent F. Callahan Jr., Fairfax Republican, wants to use the budget surplus to jump-start car-tax relief, suggesting it would take another six years to honor Mr. Gilmore’s promise.

Meanwhile, Mr. Warner and his friends in the Virginia Senate have their eyes on the present surplus to honor other commitments to education, health care and public safety.

“Everyone was on the same page for many months in support of fiscal restraint. I guess election-year pressures are mounting, and Virginians should be wary of a predictable onslaught of promises of a free lunch once again,” Mr. Warner said.

Senate Finance Committee Chairman John H. Chichester, Stafford Republican, echoed the governor’s sentiments, saying his chamber does not have “an appetite” to lift the cap, especially after “it took 115 days to accomplish what we accomplished last year.”

Speaking of appetites and free lunches, the state’s leaders seem ready to compromise on reducing the food tax, as they should. This week the House and the Senate passed measures to speed up reduction of the state’s portion of the onerous tax, which the governor included in his upcoming budget. Localities, however, retain the authority to tax food by 1 percent, which also must be remedied as soon as possible.

If politicians really want to win points with the Virginia electorate this fall, here is where they could and should focus. Investing their political capital in reducing and eliminating the food tax is a nonpartisan win-win for all. Not everyone owns a car, but everyone must eat. It always has been a bone of contention with me that Virginians are forced to pay taxes on something as basic as food.

The current combined state and local 4.5 percent tax on a minivan full of groceries could buy a few more cans of beans or boxes of cereal. The Richmond Times-Dispatch did the math and figured that a family spending an average of $100 a week on groceries would save $78 a year.

For senior citizens, the elimination of the food tax is even more important. It’s no secret that they often must make the difficult choice between the need to buy expensive prescription drugs or appropriate but more costly food to maintain healthier diets for their aging bodies.

The proposal to accelerate a reduction in the food tax from 3 percent to 1.5 percent on July 1 of this year instead of July 1, 2007, is a worthy annual cut of $100 million to $150 million in a state that now touts a $1 billion budget surplus.

Finally, an altruistic idea for those Virginia taxpayers who can afford it: When you tally up the savings on your grocery bill from the food-tax reduction, donate the money to a food bank, a homeless shelter or senior citizen center.

What a difference a year and a few pennies can make.

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