The Natives are Restless, but Not Yet Rebellious

According to the Washington Post, six of the 17 House Republican delegates who supported state tax increases last year will be challenged in the primaries. Challengers have until Wednesday to submit a petition with 125 or more valid signatures, so one or two more candidates may surface, but the hope of some in the anti-tax movement that all 17 would face opposition is likely to go unfulfilled.

Revolutionary upheaval in the Republican Party does not seem in the cards. This election is shaping up as more of a bush war–a nuisance to the forces of Business As Usual, but hardly a threat. Given the immense advantages of incumbency, the anti-tax insurgents will be lucky to bump off any of the 17.

As one who believes that the 2004 tax increases were unjustified, I’m amazed at the lack of discontent. I suppose you can attribute the quietude to the political genius of Mark Warner, who jiggered his tax “restructuring” so that a significant majority of Virginians would come out ahead, even if only marginally. Meanwhile, homeowners may be distressed about rising property taxes, but they can’t blame their General Assembly delegates for the sins of their local boards of supervisors.

The other failure so far is the inability of the anti-tax forces to spin a compelling anti-tax narrative. The fact is, the Commonwealth is facing real problems. Transportation, education, Medicaid, the environment, the mentally disabled, etc. How do we address those very real problems without raising taxes? The insurrectionists in the GOP just don’t have a good answer.

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  1. Jim:

    Good post. I think the last paragraph summed it up nicely. People see the problems at the local level, and even though they probably don’t trust politicians to solve them, they’re wary of cutting back on the size of government.

    The federal level is a different story.

    I would add this:

    The 2004 budget bill specifically stated that the sales tax increase would go into a pot called the Public Education Standards of Quality/Local Real Estate Property Tax Relief Fund. Here’s the reference in the bill:

    F. 1. Of the net revenue generated from the one-half percent increase in the rate of the state sales and use tax effective August 1, 2004, pursuant to enactments of the 2004 Special Session I of the General Assembly, the Comptroller shall transfer from the general fund of the state treasury to the Public Education Standards of Quality/Local Real Estate Property Tax Relief Fund established under ‘ 58.1-638.1 an amount equivalent to one-half of the net revenue generated from such one-half percent increase as provided in this subdivision. The transfers to the Public Education Standards of Quality/Local Real Estate Property Tax Relief Fund under this subdivision shall be for one-half of the net revenue generated (and collected in the succeeding month) from such one-half percent increase for the month of August 2004 and for each month thereafter.

    As you can see, this bill has specific language that gives localities the option to use this money to cut property taxes.

    The irony here is that the anti-tax people voted against the budget, and against the state providing a bit of relief to the burden that localities are facing. Who knows how high property tax rates would have to stay this year if the state hadn’t infused this money to the localities in 2004?

  2. Salt Lick Avatar
    Salt Lick

    Jim — Excuse me if I drag the anti-tax narrative of this post down to the level of the non-wonk, but I find this taxes-and-budget discussion confusing. You state that Virginia has serious problems, and I will accept that as true. On the other hand, didn’t the legislature endure a grueling, controversial session at the end of last year that “fixed” the budget problems? And afterwards didn’t we hear that the state was actually running a surplus? And then on top of that wasn’t there a story in the last week or two that state revenues were coming in at something above 2% predicted levels?

    The average voter sees those things and says, “Wait a minute. It looks like all of a sudden the state is rolling in more money than it thought it needed, and now it’s telling me it needs even more than it thought it needed. Huh?”

    I suppose another way of putting the question is, “What important items of state business did the last legislative session underfund?”

  3. Jim Bacon Avatar
    Jim Bacon

    I agree with you, Salt Lick. The tax increases were unnecessary, as evidenced by the fact that Virginia promptly began racking up budget surpluses (as I warned was happening back during the debate).
    But Warner and others have suggested that there is a long-term “structural” deficit that transcends one biennial budget. The pro-tax forces make a couple of points that can’t simply be wished away: (1) Spending pressures will only intensify… Medicaid, in particular, is out of control, it’s undeniable that Virginia has a growing problem with traffic congestion, which may require more spending, and education seems a bottomless money pit; and (2) the surge in revenues in the past two years was due to the defense/homeland security boom in Northern Virginia, a one-time shot of adrenaline to the economy. We cannot count on that growth to continue at the same pace.

    In other words, there will continue to be intense pressure on the budget for the foreseeable future. We dodged the bullet this biennium, but what about the next biennium?

    The challenges are real. But raising taxes is a cop-out, so I have no patience with the Warner-Chichester camp.

    My sympathies are with the anti-tax forces. But, with a handful of exceptions, I don’t hear a lot of talk emanating from that camp about how they’d meet the state’s ongoing needs in the abesence of new revenue sources. There are strategies–I have written about them extensively in my Bacon’s Rebellion columns–but I don’t see the anti-taxers embracing them.

    “Just Say No to Taxes” is not a philosophy of governance.

  4. victoria Avatar

    Great post Jim. Dead on. For once Paul and I might actually agree on something, at least in part.

    Reforming current behaviors to produce measurable results and manage from there is the trick. There are certainly some voices in the legislature, especially in the House trying to be heard on this, unfortunately the MSM doesn’t seem to want to give them any credit, and instead of focusing on their ideas the press focuses on their “anti-tax” stance.

    Job #1 has to be creating a transparent budget…

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