- The Washington Times - Friday, January 28, 2005

RICHMOND — Key Republican senators yesterday said a House plan for eliminating the car tax is fiscally irresponsible.

Senate Majority Leader Walter A. Stosch and Sen. William C. Wampler said the original car-tax relief plan in 1998 would have cost only $650 million and included caveats that core commitments be met before the tax could be eliminated.

Both senators said phasing out the car tax today would cost more than $1 billion and the state government does not have enough money to meet its core needs, in spite of a nearly $1 billion budget surplus.

The senators said cutting the grocery tax — which has been endorsed by the House and the Senate — would provide noticeable relief for taxpayers.

“Consumers will see that sooner rather than later,” said Mr. Wampler, Bristol Republican. “I think we need to be very careful about saying we will go back and undo the cap on the car tax. That’s a commitment that I’m not sure this legislature can make.”

As part of a budget compromise last year, lawmakers put an indefinite $950 million cap on the car-tax relief program, which increases in cost each year as more people buy more expensive cars. That compromise raised the sales, cigarette and real estate taxes by $1.38 billion, while cutting other taxes.

Earlier this week, House Republican leaders proposed lifting the cap and creating new triggers for when the state increases the percentage of car-tax relief, which is stalled at 70 percent. House leaders estimate the full phase-out would take about six years.

“I don’t think the Senate is prepared to support the effort to remove the cap,” said Mr. Stosch, Henrico County Republican.

“It’s not a lack of support on our part for the notion of providing tax relief,” he said. “We ought to pay what we owe first.”

The House and the Senate this year plan to use some of the surplus to reduce the tax on food from 4 percent to 2.5 percent, tax relief that Mr. Wampler said is more “tangible” than the car-tax phaseout.

“When they go to the grocery store, they’ll see that,” he said of state taxpayers.

Mr. Wampler warned that the surplus shouldn’t prompt a spending free-for-all.

“We better be careful,” he said. “We can find ourselves a few years down the road having to cut budgets.”

Earlier this week, Gov. Mark Warner dismissed the House proposal as election-year posturing.

Mr. Warner, a Democrat, reminded people that House lawmakers last year rejected his plan to fully phase out the car tax. He said the House proposal would put Virginia’s basic commitments to education and health care “at risk.”

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

All 100 House delegates — many of whom campaigned for car-tax relief — are up for re-election in November.

Former Gov. James S. Gilmore III was propelled to victory in 1997 on a “no car tax” pledge that many lawmakers also used in their campaigns. It is one of the largest expenses in the budget, behind only education and health care.

Senate Finance Committee Chairman John H. Chichester, Stafford County Republican, had proposed last year to fully phase out the car tax immediately, but his plan included an income tax increase that House lawmakers rejected.

“Car-tax relief,” Mr. Stosch said yesterday, “may be something in the future that can be resurrected.”

LOAD COMMENTS ()

 

Click to Read More

Click to Hide