- The Washington Times - Sunday, February 5, 2006

RICHMOND — Some Virginia lawmakers who once basked in the popularity they got from passing car-tax relief are now saying they wish the program never started.

The legislature is not expected to give motorists any further relief this session, but some predict that next year — when all 140 lawmakers are up for re-election — they will be forced to jump-start the stalled program.

“Frankly, I wish it had never happened, even though I voted for it,” said Senate Majority Leader Walter A. Stosch, Henrico Republican. “The car-tax program was a wonderful political decision but almost a nightmare for the state and for local governments.”

The car tax, which charges drivers an annual fee based on the value of their vehicles, has a storied past in Virginia.

Former Gov. James S. Gilmore III, the architect of car-tax relief, who is pondering a political resurgence, said lawmakers owe it to Virginians to get rid of the tax, especially because the state has a multi-billion-dollar budget surplus.



“It isn’t just the matter of keeping a promise,” said the Republican, who soared to victory in 1997 with his “No Car Tax” plan.

“The program was offered in order to help people,” he said. “It is distressing [Republicans] are not talking about the car tax because that is a kitchen-table issue.”

The General Assembly unanimously voted to start giving car-tax relief during Mr. Gilmore’s first year in office.

The program, described now by some as a “mess,” requires that the state pay local governments for the money they have lost because of the tax cut. The program has been widely popular among motorists.

A sagging economy in 2001 forced lawmakers to freeze the costly relief program at 70 percent, leaving motorists to pay 30 percent of the tax indefinitely.

Since then, numerous attempts have been made to permanently end the tax, but none became reality.

In 2004, the House rejected Gov. Mark Warner’s plan to end the tax because it included an income-tax increase.

That year, the legislature passed a $1.38 billion increase of the sales, cigarette and real estate transaction taxes, coupled with a $950 million cap on the car-tax-relief program. Lawmakers argued that the cap was needed because the program would grow out of control as more people buy more expensive cars.

The relief now costs Virginia more than $900 million a year and is one of the largest items in the state budget, behind education and health care.

Mr. Gilmore, who initially projected a cost of $650 million to eliminate the tax, blanched at critics who say his 1997 estimates were misleading. He said that when he came into office, he revised the figure to between $900 million to $1 billion.

“We were right on the mark,” he said. “It’s more than that now because years and years have passed, but not much more. It’s really quite small.”

Gov. Timothy M. Kaine, a Democrat who took office last month, would support eliminating the tax only if it could be done in a “predictable and fiscally responsible way,” said his spokesman, Kevin Hall.

“Governor Kaine believes the cap was a key component to the success of the 2004 tax reform struggle that fixed our fiscal mess,” Mr. Hall said.

House Majority Leader H. Morgan Griffith, Salem Republican, predicted that the “big push” to finally end the car tax will start in October, when motorists in many localities must pay car-tax bills that are equal to or slightly higher than last year’s bills.

“When that October stuff hits, look for the political pressure to turn way up,” he said. “It will be revisited, and it should eventually go away.”

Some are taking up the battle this year.

“I think it’s important to continue to press the issue,” said Delegate Jeffrey M. Frederick, Prince William Republican who has proposed a measure called “Keep Our Promise Act” that would lift the cap and put the program on track for a phase-out.

Mr. Frederick knows the measure will suffer the same fate as a similar bill that died in the Senate last year.

“You’ve got to keep trying. If all these other guys don’t want to keep their promise, that’s their prerogative,” he said.

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