http://www.nationalreview.com/nrof_comment/ferrara200602030900.asp
Posted on 02/03/2006 8:06:07 AM PST by SirLinksalot
February 03, 2006,
9:00 a.m.
Tuesday night, in the Democrat response to President Bush’s State of the Union, we heard Gov. Tim Kaine talk about the great bipartisan collaboration in his state of Virginia. We were told that collaboration has served the people by focusing on delivering services, making record investments, and producing real results.
Those are the new code words for what is really going on in Virginia, where historic runaway government spending is being fueled by record tax increases. We are going to hear a lot in the next two years about this great Virginia bipartisan “miracle,” with former Gov. Mark Warner now running for president and, failing that, very possibly joining a ticket in the vice-presidential slot.
With this in mind, the truth about Virginia and the performance and character of former Gov. Warner need to be put on the record now.
I have observed the Virginia situation first hand, battling against the state’s spending-and-tax tsunami as the former head of the state’s Club for Growth chapter. When Mark Warner ran for governor in 2001, he insisted he would never even consider raising taxes. He famously said, “The old style of politics, of saying anything to get elected, is not what we need. Instead, as a businessman, I will clean up the budget mess in Richmond, restore accountability, and — no matter how many times my opponent may say otherwise — I will not raise your taxes.”
Indeed, Warner bitterly attacked his Republican opponent in ad after ad, claiming his opponent was a scurrilous politician for bringing up the completely phony claim that Warner would raise taxes if elected. Yet in 2004 Warner proposed the largest tax increase in the history of Virginia — $1.1 billion over just the first two years of implementation.
Virginia’s Republican house opposed any tax increase. But about a dozen overcooked senate Republicans, including the aging senate Republican leadership, insisted they would not pass any budget (effectively shutting down the state) unless an even bigger tax increase was passed.
Let’s review the story of state senate finance committee chairman John Chichester. Chichester had faced a serious primary challenge in 2003, in which he urged voters to “Join his campaign for lower taxes.” His literature also alleged that he was a “Leader in the fight for lower taxes.” In a campaign letter, Chichester said, “you can always count on me to support our shared Republican principles of smaller government [and] lower taxes.” He told the Richmond Times Dispatch in May 2003, “I’m certainly not going to favor raising taxes.”
When Chichester’s primary opponent Mike Rothfeld charged that Chichester was plotting a massive tax increase with Warner, Chichester said Rothfeld was “hallucinating.”
And what happened? Just a few months after winning that primary, Chichester lead 12 senate Republicans, who had similarly campaigned for lower taxes, to counter Warner’s proposal with a $3.9 billion tax increase over the first two years. The state house, fearing the media would pin the blame for any government shutdown on them, eventually went along with a $1.4 billion increase.
Why the hysteria to raise taxes? Warner and Chichester ran around the state claiming that because of the ill-considered car tax cut under former Republican governor Jim Gilmore, the state faced a massive budget deficit. Warner said he had already cut state spending by $6 billion, or 20 percent of the budget. As a result, there was no alternative but to raise taxes.
All of which was a complete fairy tale. The state ended the 2004 fiscal year with a surplus of over $400 million, before the tax increase took effect. That surplus eventually grew to $2 billion, proving that talk of a looming budget deficit was completely false.
Nor were there any spending cuts. The state budgeted $18.2 billion in spending for 1998. By 2004, the budget provided for $26 billion in spending, the highest in the history of Virginia up until then. In his last budget submitted in December 2005, just before leaving office, Warner proposed spending about $36 billion a year.
Virginia, in fact, had enough projected revenues in 2004 to increase the next two-year state budget by 11 percent over the previous budget. But that wasn’t enough for Warner and a few senate Republicans. They wanted the tax increase so they could increase state spending by 19 percent in the new budget.
That was what the tax-increase fight was all about — increasing taxes so spending could be increased even faster and to record levels. The only Virginia miracle was that Warner could get a badly confused Republican legislature to go along with that foolishness.
If Warner or any other Democrat is elected president in 2008, they will bring this big-government road show to Washington — which is, indeed, effectively what they are now telling us they plan to do. They will increase federal taxes right after the election, just as Bill Clinton did in 1993. And they will use that money to increase federal spending even faster.
— Peter Ferrara is a senior fellow with the Free Enterprise Fund and director of entitlement and budget policy reforms at the Institute for Policy Innovation.
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http://www.nationalreview.com/nrof_comment/ferrara200602030900.asp
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Actually, my assessment is in line with the neighborhood. The reason I said that is I'd like my property tax rate to go down. Hasn't been discussed much in my county, but other counties in Maryland have had even higher assessment rate increases (and NoVa too), and some counties have lowered property tax rates. Seems only fair.
Being very pragmatic, it seems to me that for state governments that can't incur deficits, a small budget surplus is the ideal situation. The appropriate size of "small" is likely an individual preference. Certainly when this came up a couple of years ago, one thing Warner indicated he felt necessary to do was to restock the "rainy day" fund, which is called on to finance a budget shortfall in a given year. Do you Virginians know the current value of the aforementioned "rainy day" fund?
I know in previous discussions we also mentioned that there should be a "popoff" valve in the state budget that sets a budget surplus limit -- anything over it would be rebated proportionally back to the taxpayers. I've always liked that idea, and it seems to me that a couple of states have such a provision.
I haven't been in NoVa in a while, but I do have to contend with the roads of the red-headed step child of the Commonwealth.........
With that said I will tell you all the roads here on the Eastern Shore are one H-E-double hockey stick of a lot better than any roads in Delaware.......I couldn't wait to get the heck out of there today. DelDot makes VDOT look like a precision timepiece.
And let's not forget that when Mark Warner gave them the opportunity to vote on raising local taxes for transportation needs, the people of Northern Virginia and Hampton Roads not only said "no," they said "HELL NO!"
Thus the reason Tim Kaine suddenly no longer liked the idea of referendum.
Not four in a row. You forgot George H.W. Bush.
ohfercryinoutloud...are you still singin' that same tune?
Let me type it real slow so you might get it this time.
Projected revenues were less than anticipated. But the budget still grew, just not at the same rate as it had in previous boom years.
cogitator, if you want us to believe you're not a DU operative, stop reading from their playbook.
I was talking about Governors running for President.
George HW Bush was never a Governor. - Tom
That was my point. I read it that you meant the last four Presidents.
But then, I'm reading without my contacts ~or~ alcohol.
Then it is their problem, not the rest of ours. This is an example of why I am not a large fan of statewide Iniative and Referendum without strict controls. And especially when it comes to things like taxes. As a resident of the Eastern Shore, I should have no more tight to vote for increasing taxes on residents of NoVA or Hampton Roads than non-smokers should have voting in favor of cigarette tax increases.
If there was a referendum tomorrow in Accomack County to increase our taxes to fix our roads I would most likely vote in favor of it, as long as it went to fix the roads in this county not elsewhere. But if folks in NoVA and Hampton Roads don't want to raise their own taxes to fix their own roads, I don't see why anyone else should have their taxes raised to fix those roads. It's apparent they don't want the roads fixed badly enough to help pay for it themselves.
I guess I'm getting selfish as I get older.
Exactly right. If revenues are higher than the previous year it is not a shortfall.
The only time there is a shortfall is if spending exceeds income. The solution to that is to cut spending.
Why government can't run the way a business or household does is beyond me..............but I have been saying that for more years than I care to mention.
If I'm reading from the DU playbook, I'd be more subtle.
If memory serves, Gov. Gilmore submitted a two-year budget. One of the main things that Gov. Warner had to do in his first two years was make cuts in that budget. It just so happens that I was mentoring at my kids' school today, and at lunch I read a two-week+ old WashPost (dated January 16). They had a summary of Warner's four years. What I just said above is almost verbatim from that article.
If the two-year budget was balanced on projected revenues, and the projected revenues were less than anticipated, and the state can't run a deficit, then the actual budget had to be scaled back. It was all over the news, and Warner looked like a sad-sack puppy because he was doing it (and not at that time establishing a basis for a run at the White House, darn the luck, which must've made him feel worse). That's all I'm saying happened. Does my summary match the facts of the case, Y'honor?
You say that like it's a bad thing.
The budget Gilmore proposed was bloated. But even with the "Warner cuts" it was more than the previous budget cycle.
Government just didn't grow as much as it could have.
All the better. Indiana and Virgina both went GOP in 2004.
The sane Democrats that are left know they need someone they can sell.
Indiana boy and Virginia Governor markets a lot better than a billionaire senator.
Back from a weekend break....
Then you should take this up with your local government. This is not a state or federal issue. Much as Tim Kaine would like local taxes to be a state issue, they're not. And you shouldn't want them to become a state issue.
Ohio's roads suck pretty badly, too.
I don't recall what the exact value of the rainy day fund is - however, I do recall hearing that the mandated requirement has been met so no more excess tax funds have to be siphoned off into this sinkhole.
welcome to the club...
Only the largest tax increase in VA history - to set the stage for Timmy's even larger tax increase.
Why is it that the government is only "courageous" when it reaches into my wallet again?
(Sorry for the reverse-order reply - I post 'em as I read 'em.)
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