Car taxes not high on legislators’ priority list; A1
Daily Staff Writer
Car taxes may be going up around the commonwealth, but it’s little more than background noise in Richmond these days.
Legislators are in their second month of overtime trying to put together a state budget, but the GOP-led House of Delegates and Senate remain deadlocked over transportation and tax issues.
Why are taxes going up? The program legislators created to pay tax bills for drivers is running out of money.
Republican Gov. Jim Gilmore’s plan to phase out the car tax in the late 1990s was designed as an open-ended one. Whatever the local governments billed, the state would pay.
But when hard times hit in 2001, the phaseout was frozen at 70 percent. In 2004, legislators capped the program at $950 million to balance the budget.
That amount was enough to cover a 70 percent rollback until this year. Now, relief rates in the Northern Shenandoah Valley are hovering around 55 percent.
It’s not like the General Assembly didn’t see it coming.
“What you’re talking about is a problem that we’ve had for several years and it’s not going to be a problem that’s likely to go away,” said Sen. Mark Obenshain, R-Harrisonburg, whose district includes Shenandoah, Warren and Page counties.
Virginia has been running a surplus since 2003, he said, but there’s been no major legislative push to continue the phaseout — or even just keep the rollback at 70 percent.
“We had a surplus this past biennium and no shortage of places to spend it,” Obenshain said.
Delegates have included an additional $50 million in their budget, which they say would keep the 70 percent relief alive, even if only for 2006.
But the Senate isn’t on board, and the two sides are far more focused on the debate over transportation spending as a whole.
A spokesman for Democratic Gov. Timothy M. Kaine said Tuesday that given the ongoing fight over the budget, the car-tax issue isn’t on the administration’s radar.
The $50 million wouldn’t be a deal-breaker for Sen. H. Russell Potts Jr., but that doesn’t mean he likes the idea, he said Tuesday.
“I can’t speak for my colleagues … but I’d be opposed to raising the amount we’ve got in that budget,” he said. “Leave it there, and that’s the way it ought to stay.”
But Potts has his own idea about what should be done with the tax relief — use it to build roads and mass transit systems.
“If I had my druthers, I take that $950 [million], put every penny towards transportation, shake hands with the House and walk away, and say ‘We have a deal,’” he said. “Then you wouldn’t have to be worrying about the doggone disagreement” between House and Senate.
Potts voted for the car-tax plan under Gilmore, but in hindsight, it was clearly a mistake, he said.
“You’ve got folks from Woodstock and Mt. Jackson helping to pay for relief for Lexuses and BMWs in Fairfax County,” he said.
Potts’ assertion is backed up by statistics from the Virginia Department of Taxation and the University of Virginia’s Weldon Cooper Center.
Fairfax County is home to some 13 percent of the state’s population, but received 22.3 percent of all the car-tax relief paid out in 2005.
Wealthier counties in and around Northern Virginia are more likely to get a higher share of relief than less wealthy ones. Loudoun County, home to 3.3 percent of the state’s population, got 4.4 percent of the car-tax pie. Virginia Beach, meanwhile, got 5.9 percent for its 5.8 percent of the population.
Locally, Frederick County got a 1.3 percent share of the $950 million for 0.89 percent of the population, while Shenandoah County got 0.4 percent of the money for 0.51 percent of the population.
While Potts hasn’t introduced legislation to reinstate the tax, he said the General Assembly is still in session and the window is open.
“I’ve talked it over with my colleagues … I’m still not saying no that I won’t do that,” he said. Still, “I don’t think it matters who would introduce it, it wouldn’t have the votes.”
But a promise made, even under a previous administration, should be a promise kept, Obenshain said.
“Before we start adopting new programs and new initiatives there’s some moral imperative for the GA to make up its mind and follow though on its promise to more fully fund its promise,” he said.