No Good Deed Goes Unpunished

Barnie Day



Common Sense

The best thing coming out the 2004 General Assembly was the cap on  car tax relief -- a subsidy for inefficient local government and a running sore on state finances.


If the 2004 edition of the Virginia General Assembly did nothing more than cap the car tax reimbursement to local governments in Virginia at $950 million annually, it would have been a good year for legislative common sense, even with the clock still running -- at day 117, and counting.


Of course, the legislature accomplished quite a bit more than this, but this action is the single most significant component of a compromise agreement that has generally torn asunder alliances previously thought to be unassailable.


The idea that the state could, and would, reimburse boards of supervisors, and town and city councils for the local taxes they raised on personal automobiles was a cockamammied one from the beginning — unless you were Jim Gilmore, who saw it as a way to the governorship, fiscal consequences, and fairness, be damned.


At the time, Virginia’s economy was on a roll.  Unemployment was low. Business was booming. State tax coffers were spilling over. To some, handing a blank check back to local governments seemed like the thing to do. And that’s essentially what happened. 


Gilmore’s proposal set up a preposterous proposition to local governments: The bigger your budget, the higher your taxes, the more money you waste, the more inefficiently you operate — the more the state is going to reimburse you! That such thinking seemed somehow out of sync with traditional Republican attitudes toward government growth and spending went by the wayside.


A few legislators — and there were a few — who could see beyond the gimmickery implied by Gilmore’s promise, who could see the inherent bias and unfairness of Gilmore’s bumper sticker, who could foresee what would happen if the economy went south, were simply drowned out in the clamor.


C. Richard Cranwell, the great and legendary "Dickie" Cranwell, master and commander of the House of Delegates for so long, dug in. “Over my dead body,” said he. But by then, Democratic losses across the state had flip-flopped the political make-up of the House and Republicans were running the show. Cranwell didn’t have the votes it took to kill this idiocy outright.


But what he did have was an uncanny, and unmatched, ability to always be waiting for you at the next intersection. To the benefit of every single school system in Virginia, he chained hundreds of millions of dollars in new school construction and renovation funds to Gilmore’s "no car tax" plan, effectively telling the governor: “You’re going to get your deal through the legislature, but this goes with it.”


And it did. Cranwell’s school construction component poured badly-needed money into every school in the state and Gilmore basked in the glory of "no car tax." If you can call it "glory."


Trouble began immediately. For starters, it became obvious that Gilmore’s cost estimates had about as much substance to them as does a puff of smoke. 


The estimates quickly doubled, then doubled again. A program the Gilmore campaign initially said would cost the state about $300 million in reimbursements to local governments, went almost overnight to a "revised" estimate of some $600 million. And then to more than a billion — a lot more. It finally settled out at projections of about $1.3 billion.


And other problems became evident — at least to a lot of the smaller, poorer, relatively rural counties:  most of that money was going to pour into the richest part of the state. Fairfax County alone — the highest per-capita income county in America — got a third of the total!


And then the economy tanked. The Northern Virginia technology bubble that had pulled the state’s economic wagon for a decade burst — and the remnants of it evaporated. Then came the tragic events of Sept. 11, 2001, a terrorist attack that plunged Virginia and the rest of the country into a recession.


Meanwhile, back at the ranch… the cost of the Gilmore plan continued to spiral upward every year — by about $50 million dollars. There was no end in sight to it — until the other day, when the House and Senate, welcoming common sense back home among them, said “Enough of this foolishness is enough,” and capped it.


-- May 10, 2004


























Contact Information


Barnie Day

604 Braswell Drive
Meadows of Dan, VA


E-mail: [email protected]