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xcurmudgeon

A Look Back at the Car Tax Rebate...And a Look Forward

by: Elaine in Roanoke

Wed Dec 16, 2009 at 11:22:00 AM EST


( - promoted by KathyinBlacksburg)

When Republican Jim Gilmore ran for Virginia's governor in 1997, he rode the motto of "No Car Tax" all the way to Richmond. His problem was in actually delivering on his campaign promise to eliminate the tax on automobiles, which is a local tax.

In 1998, as Gilmore focused his attention on the car tax, the cost of eliminating it kept going up. Soon, the less than $1 billion that Gilmore had touted as the cost had grown to more than $2.8 billion. Plus, the cost would become an annual state obligation after a five-year phase-in of the tax reduction and planned elimination.

By the way, the rebate finally had to be capped at $950 million to avoid destroying the state's solvency. That amount used to cover 70% of the car tax, but it now only covers 50% because of increases in population and numbers of automobiles.

Gilmore's big plans for the elimination of the tax really hit the skids as the economy slid into recession in 2001. Meanwhile, Gilmore was named chair of the Republican National Committee by the newly-elected president George W. Bush. (Hmmm...That part sounds familiar, doesn't it? A new president names the Virginia governor as head of the national party.)

Elaine in Roanoke :: A Look Back at the Car Tax Rebate...And a Look Forward
Gilmore became the very first Republican governor to lose the support of the state's business community. Corporate leaders joined much of the rest of the state in believing that Gilmore was undoing the consensus that had helped Virginia become a national leader in job creation and a fiscally well-run state.

Up until Gilmore's budget mess, both political parties had supported the twin goals of transportation and education. Asked in 2001 to describe Gilmore's legacy, Northern Virginia developer-lawyer John T. "Til" Hazel said Gilmore's philosophy of governing was to "cut all the programs that count, devastate transportation, refuse money to education and leave the state insolvent for your successor."

Of course, the combination of voter disenchantment and loss of confidence by the business community resulted in the election of Mark Warner, who went on to become one of the state's most successful modern governors.

As I recalled the dubious history of Jim Gilmore and his absolute insistence on that car tax rebate in the face of serious budget shortfalls, I wonder whether Bob McDonnell will fall into the same trap.

McDonnell, who certainly presented himself as a pragmatic and business-oriented leader (a "jobs governor") during the election, is already becoming set in concrete on his insistence that he will not sign off on any tax increases to help close the latest budget deficit. He is abetted by the Republicans in the House of Delegates.

Gilmore's General Assembly was very closely divided. Back then, it was the GOP that held a slim majoriity of 21 in the State Senate. The House of Delegates included 50 Democrats, 49 Republicans and a GOP-caucusing independent, Lacey Putney. The result was a power-sharing arrangement that made the legislature amenable to compromise and which kept the state from the draconian cuts to education that Gilmore's philosophy would have caused.

This time around, it's the Democrats who have the 21-vote majority in the State Senate. The Republicans left in that body have been "purged" of pragmatic GOP senators like John Chichester, who helped provide good government back then.

The House of Delegates now is even more ideological that the senate. Plus, the last election gave them an iron-clad majority that never questions the marching orders given by the right-wing GOP leadership. This General Assembly isn't going to have an iota of bi-partisanship built around problem-solving.

I predict that Gov, Tim Kaine is going to do everything he can to protect education and other essential state services from damaging cuts in his last budget. He will propose closing some tax loopholes and even advocate some revenue increases.

I also predict that Bob McDonnell is going to be trapped by his own real right-wing philosophy to reject any revenue-increasing measures, thus being forced redo parts of Kaine's budget and to cut essential services.

We'll just have to see how Virginians react to the result of the cuts that higher education has already taken, the refusal of Republicans to accept any tax increase to improve the situation in transportation, and the cuts that now will be made to public education and public safety. If they react the same way they did during Gilmore's tenure, it will be the Democrats who will benefit.

McDonnell just may have painted himself into an ideological corner. He ran as if he were a moderate, middle-of-the-road leader. If he actually wishes to govern that way, he should look to the example of Mark Warner for his role model, not Jim Gilmore.

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