Rebel With a Cause

Paul Goldman

The Great Dissenter


Goldman warns Virginia Democrats: Mark Warner is gambling his future -- and that of the state party -- on increasing state taxes under the code name of "tax reform."


Editor's Note: This column first ran yesterday in the Washington Post. I thought it significant enough that I prevailed upon Paul Goldman to let me republish it on Bacon's Rebellion and then to expand upon his thoughts based upon further reflection and the feedback he received from Post readers.


Having agreed to sign a GOP budget he once deemed "fiscally irresponsible," Virginia Gov. Mark R. Warner has now decided to risk his legacy -- and his party's future -- on the issue of an increase in state taxes.


True, he uses the term "tax reform," not "increase," and he will not say whether his real aim is to increase the overall tax burden on Virginians. But transparent evasions of the obvious are only going to undermine his image as a straight-shooter.


If Warner truly wants to win on tax reform, he must level with the people so they know the reasons for his stance. Yet this raises a more fundamental question:


Why have the governor and key leaders of the state's Democratic Party decided to risk the party's future on what could be a $1 billion or more increase in taxes?


Accordingly, I feel obligated to take up the mantle of the "Great Dissenter," Justice John Marshall Harlan. Harlan earned his nickname by being the lone dissenter in the 8 to 1 Supreme Court decision of 1896, Plessy v. Ferguson, that upheld segregation in the South.


Democrats were given a golden opportunity when the GOP badly bungled finances during the Gilmore administration. But instead of forcing the GOP to fix its gimmicks and mismanagement of the past 16 months, Warner has basically signed on to more of the same, even agreeing to accept phony revenue estimates despite having criticized that practice in the campaign.


From a policy and political perspective, Virginia Democrats would have been much better off had Warner vetoed the GOP budget and called the legislators back for a special session this month to repair the effects of their fiscal recklessness. Such a bold political stroke would have led to a seven-week gubernatorial-led crash course in educating the public on the GOP's Enron-style bookkeeping, both in terms of the annual budget, which already faces a projected deficit next year, and the "structural deficit" -- the off-the-books debt the state has piled up in recent times.


Instead, Warner proposes to use the seven months leading up to the November elections to challenge the GOP to pass tax increases under the code term "tax reform."


To repeat: Democrats had the Republican leadership in a sure-lose position on the fiscal issue. Instead, the governor let the GOP off the hook -- and put himself and his party on it instead -- with his all-but-declared call for higher taxes in an election year.


House Speaker William J. Howell, R-Fredericksburg, is publicly calling on the governor to come clean on his intentions and daring him to propose a tax increase. At the same time, Howell buddy Sen. John Chichester, R-Fredericksburg, the Senate Finance Committee chairman, is privately telling Warner not to worry about the speaker, that the speaker and other GOP leaders are just "posturing" for the 2003 election.


This GOP bad cop-good cop routine on taxes -- with the wink and nod about how everyone will do the "right" thing once elected -- is calculated to make Warner gamble with the future of the Democratic Party. Others may want to follow blindly. But call me the Great Dissenter.


-- May 4, 2003



Dear Jimbo:

You are right, I have received a fair amount of feedback on the article, both pro and con, from predictable and unpredictable sources. As a writer would say, the article wrote itself, for it discussed what any honest and knowledgeable political observer would be required to write, if not in May than surely by June or July.

Let me cut to the chase: Right now, the state's finances, based on sound, fiscally conservative accounting principles, is teetering on the edge of a fiscal cliff, as I predicted it would in another Washington Post column in 2001.

I knew this when I was plotting the Warner campaign strategy on budget and fiscal stuff. But given what has again transpired in this last budget session, what
I called the "structural deficit" two years ago has only gotten worse. For example: The politicians in Richmond have effectively wiped out the Rainy Day Fund by treating it as their personal bailout fund, despite the fact it was never intended to protect them from chronic fiscal mismanagement. Now the state is on the hook to refill the fund, plus make up for all the other off-the-books maneuvers.

I know of what I speak, as the idea to consider creating the fund was first suggested by me to then former Gov. Doug Wilder. If you look at the original proposal, it was not intended to save the elected elite from their bungling but to protect against unforeseen revenue shortfalls.

The current fiscal mess is the most advertised and predicted in state history.


Yet for some reason, Democratic leaders backed away from challenging the Republicans on the true dimensions of our fiscal and budget mess. I can understand Gov.-elect Warner not wanting to challenge the General Assembly to face the truth of the state's structural budget and financial problems during his first GA Session: I didn't agree with that strategy but I could understand it.

However, the failure to draw the line in 2003 now risks playing into the hands of Republicans.

Why? Naturally, nothing is sure in politics. But the foreseeable dynamics of political strategy say the situation will logically drive Warner and General Assembly Republicans to defend their records of fiscal management, thus in effect, making Warner run political interference for Republicans. In theory -- and again, we strategy guys have to analyze all the moves -- this could deprive the 2005 Democratic ticket, indeed all Democrats but Warner the fiscal issue going forward.

Unless, that is, some of us force a debate on what is happening.

Right now, the "tax reform" issue hangs like an ominous shadow over the DEM party. Warner's press office was quoted last year as saying he still intends to keep his deal with former Speaker Vance Wilkins and will propose 100 percent car tax repeal in his last budget. The governor also has said he would accept the elimination of the estate tax as part of his "tax reform" package. Several years ago, his chief lobbyist, Republican Jimmy Hazel, wrote an article saying that we needed "tax reform"; but his only suggestion was to give localities 6 percent of the state's income tax revenue.

These three proposals will reduce state budget revenue by well over a billion dollars a year, ballooning the very problem the governor correctly says Virginia must solve. Meaning: The governor and the Democrats will have to come up with an equivalent amount in new taxes just to keep the state budget from going further into the red; and the Governor has said Virginia needs additional revenues behind that.

Conclusion: The governor is putting Democrats in the posture of agreeing to popular tax-cutting and revenue-sharing GOP suggestions. What do Democrats get in return? The obligation to take the lead in proposing highly unpopular tax increases to offset these popular, GOP measures!

Thus, from the standpoint of political strategy, it seems to me that Democrats assume all the risk and yet stand to get little if any potential reward.

Now, you might say: But Paul, this is the "right" thing to do.

To which I would retort: Oh really?

I have yet to hear where this new tax money is going and who pays more and who pays less. All I know is that local schools and teachers, for example, currently are being shortchanged by a billion dollars. Is this new tax money going to cover prior made-but-unmet promises, thereby taking the GOP off the hook for explaining how they spent billions on less important matters? Are we going to repeal 100 percent of the car tax before we cover our debts to our school children?

The future is now. No doubt, the usual "shoot the messenger" talk will emerge as regards to this column as it has in the past.

So much for the peanut gallery.

That being said, I will concede that if Mark Warner, a super-salesman, puts his mind to it, he can probably sell a "tax reform" plan that is fair, balanced, detailed, forward-looking and increases taxes.

That, of course, is his decision. 

I suppose the political correct thing would be to do what so many others are doing now: Talk privately but say nothing publicly so as not to upset their standing in Governor's Office.

That is not my style.

Mark Warner and I have long been political allies, so either I tell him beforehand or forever hold my tongue. So I have done it in a way to make sure it gets done, in person, in discussion and now in writing once again.

I have learned that at the gubernatorial level, the most important advice any governor needs is the advice he gets from someone with the willingness to have that be the last advice he or she ever gives that Governor directly.

I have fought hard to make changes in Virginia.

Right now, I see a lot of what I worked for being undone on many fronts, from budget and fiscal integrity, to racial equality, to ethical reform, to political strategy.

Hopefully, we will not go backwards. But if we do, then at least I wasn't waiting in the on-deck circle with my bat on my shoulder.

-- May 5, 2003


(c) Copyright. All rights reserved. Paul Goldman. 2003.


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Paul Goldman, the Rebel With a Cause, was chief political strategist for the past two winning Democratic governors in Virginia and was credited with leading a "revolution in American politics" by The New York Times for his role in breaking America's 300-year-old color barrier in national politics.


You can reach him at