FamilyFoundationBlog.com

The Special Tax Session of the General Assembly resumes tomorrow and anything can happen. Some capitol insiders are predicting the session could end by the end of the day, with nothing done. That would be good.

Some think the House could pass some watered down Senate tax increase, send it back to Senate Majority Leader Dick “The People Will Pay” Saslaw (D-35, Springfield) and his crowd down the hall, who will change it and take it to a conference committee, which would be dangerous enough. But others think that if anything gets out of the House, Senate Dems will pass it immediately and let Governor Tim Kaine amend it to include all the extra taxes his heart desires (we’d say that would be Christmas in July for the liberals, except many don’t believe . . . oh, never mind) and send it back for an up or down vote. If that version passes, it would be a Kaine victory at the expense (literally) of the public; a taxpayer loss. If nothing happens, believe your bottom dollar (that may be all you have left right now) that the governor and the Dems will demonize conservatives as not wanting to address the transportation “crisis.” 

They better be careful for what they ask. It may be anecdotal, but evidence is the public, across all lines, doesn’t seem to have much of an appetite for tax increases when gas is at $4.00 a gallon and all the ripple effect cost increases it is causing. Senator Saslaw during the regular session was fond of saying that his gas tax increase would cost the equivalent of one Big Mac meal per year. Actually, it was closer to a Ruth Chris dinner, but regardless, most families don’t even have a Big Mac to cut back right now.

Not only that, but his proposal in the winter was a 5-cent increase over five years. Now, I guess because he wants us to cut back on apple turnovers, too, his bill would increase the gas tax by six cents over six years (SB 6009). That’s a 35-percent increase. It doesn’t appear as if this will pass. The House Republican leadership let it come to the floor in a procedural move in committee to force House Dems to vote on recordin anticipation of next year’s House elections. The money is on many House Dems getting cold feet on this one.

However (there’s always a “however”), the House GOP doesn’t want to get left out of the game. They want to be sure no one can claim they have no ideas themselves, so instead of no ideas they are proposing old and bad ideas. They want to “fix” the aspect of last year’s transportation package (HB 3202) that the Virginia Supreme Court ruled unconstitutional. This new package, HB 6055, patroned by Delegate Phil Hamilton (R-93, Newport News) is more complex, but is also harmful to taxpayers and the economy. Its main feature is to give local governments in Hampton Roads and Northern Virginia taxing authority in certain areas so as to spend it themselves for transportation, rather than the original, and unconstitutional, law that let unelected boards tax and spend. (To be fair, the original bill passed by the House in 2007 was to give local governments the authority; the governor amended it to give it to the unelected boards, and bipartisan majorities in the General Assembly concurred.)

While many legislators may make the political calculation that by “simply fixing” last year’s plan (by voting for HB 6055) Virginians won’t consider it a vote to raise taxes, they may be calculating wrong. People want the General Assembly to make hard decisions instead of asking for more money from families — again. Smart citizens know fixing a bad plan often makes it still worse. 

Among the various taxes in HB 6055 is one particularly heinous tax — a $.40 per $100 increase in the “grantor’s tax” in Northern Virginia. This is a tax home sellers pay at closing. As home sales continue to plummet, and some of those sales are “short” (sold for less than what is owed on it), such a tax is reckless. 

Earlier this month, while detailing the state’s current financial picture, Secretary of Finance Jody Wagner revealed a devastating downward trend in home sales to the House Appropriations Committee. At the time, several Republicans appropriately drilled Secretary Wagner regarding Governor Kaine’s transportation proposal that included a grantor’s tax. It would be peculiar for those same legislators to agree to one now, but this is the General Assembly, after all. Regardless of whether the tax is introduced by Democrats or Republicans, the governor, the Senate or the House, the effect on the housing industry is the same — it will ensure a housing recession.

HB 6055 also includes a $20 increase in the car inspection fee in Hampton Roads, an extra $100 fee on those who receive their first drivers license (in N.Va.), a hotel tax (N.Va.) and a rental car tax (in both areas), among others. Americans For Tax Reform mailed each legislator who signed its No Tax Pledge that a vote to pass the tax-increasing buck to localities is still a tax increase and violates the pledge.

Four years ago, then-Governor Mark Warner cited education, health and public safety to pass the largest tax hike in the Commonwealth’s history. Apparently, in 2004, transportation was no longer the “crisis” Warner had said it was in 2002 when he tried unsuccessfully to pass regional sales tax hikes for transportation via referenda in Hampton Roads and Northern Virginia. Now, Governor Kaine and some allies in the legislature have decided to dust off the transportation “crisis” to raise taxes. This action comes only a few months after they proposed raiding the Transportation Trust Fund for non-transportation expenditures.

Some of the same lawmakers who opposed a constitutional amendment restricting the Transportation Trust Fund to transportation-only spending now support a tax hike.  Even Governor Kaine, prior to his election, endorsed a “lock-box” to secure transportation funds from general fund spending and tax increases. Three years later, he has done nothing to support efforts to secure one. So what we’re left with is a thinly veiled attempt to raise taxes on Virginia’s families simply to raise money, not specifically for transportation. 

Besides that, it appears HB 6055 is more flexible than a Russian gymnast. Specific projects are to be carried out “in consultation with members of the General Assembly” — whatever that might mean. Sadly, the level of linguistic complexity required to raise some taxes in some areas, that affect only some people in order to fix some transportation needs, all while appearing as if no taxes are being raised, makes for a legislative nightmare.     

The bottom line is that for over a decade the General Assembly has bowed to the powerful education union and funded public education incorrectly, refused to reduce spending in pet projects, and counted on Virginians to pony up under the threat of disaster. If this mentality doesn’t change now, in difficult economic times, what will it be like in good times? Believe me, it will be Bonnie and Clyde all over again, with a new crisis (health care or Medicare, perhaps?) and guess who they think is the bank?

The good news is that this can be stopped. Many legislators are being pressured by big-time lobbyists of big businesses who will benefit from government spending, from the teachers union which wants to ensure their portion of the pie isn’t touched, and other special interest groups. But when enough concerned voters let their senators and delegates know enough is enough, it gives them the courage to resist the special interest pressures (click here to contact them). Instead of raising taxes, it is time for them to get some new ideas, such as comprehensive spending and budget reform.

It’s a well established fact of history that when Mark Warner ran for governor in 2001, he looked into the camera during his debate with Mark Early and disputed Early’s claim that Warner was going to raise our taxes. Warner flatly denied it. 

When he took office he cleverly tried to raise taxes through the back door via regional sales taxes referenda in Hampton Roads and Northern Virginia which would have ostensibly funded transportation projects in those regions. Each lost decisively.

Emboldened by his loss, Mr. Warner a year later, blatantly decided on a full frontal attack. He and his Sundance Kid, RINO then-Senator John Chichester, rammed through a statewide tax increase, Virginia’s largest ever, for everything but transportation. Their cry was that the Commonwealth was short on cash for core services, such as public safety and education. If nothing else, it proved another lie that the mainstream media nary expounds on: Warner was dead-set determined to raise taxes on someone, somehow, for any reason, campaign promise charade and all. Perhaps he needed to burnish his liberal credentials. Believe me, they already were firmly established. Just like Butch and Sundance: see a bank, gotta rob it. Money, especially when it’s someone else’s, is addictive, you know. The change in direction from transportation emergency to public safety and education crisis only deepened the plot: He was looking for anything he could sell that the public would buy. Transportation wouldn’t get them to part with their hard-earned money, but the scare tactic of police lay-offs and kids getting no education might work. It did. By the way, we didn’t hear much from Mr. Warner about a transportation crisis then, did we?

It truly is another matter if a politician says one thing while campaigning and the facts on the ground later make for a radically different situation. This wasn’t the case at all. Hence more deception and fraud. Mr. Warner claimed he inherited a deficit. Not true. Virginia law prohibits it. His predecessor, former Governor Jim Gilmore, his opponent now in the U.S. Senate campaign, made — by law — the cuts necessary when Sundance Chichester couldn’t come to an agreement on budget amendments with House Republicans.

Adding insult (to our intelligence) to injury (to our bank accounts) Mr. Warner misled Virginians again when he said he cut spending and there was nothing left to cut. Is that why spending increased dramatically during his term, from $23.48 billion to $32 billion? (That is about a 30 percent increase.) This truly is where white becomes black and black becomes white.

But his greatest whopper was that the tax increase — at $1.4 billion, Virginia’s largest ever — was needed for a short fall for the next budget year. Time and time again he and his finance secretary presented figures to the General Assembly showing a slow down in tax receipts. Not only was there enough money coming in, but Warner’s conception of a short fall wasn’t a budget deficit, but a short fall in his own over-inflated revenue projections. As it was, a few weeks after he signed that largest-tax-increase-in-Virginia-history, he revealed we had a $1 billion surplus.

So, let’s review: Lie about not seeking a tax increase by trying to get the state’s two most populous regions to approve a sales tax hike; lie that it is needed for transportation; prove that lie by lying the next year by telling us we needed an even larger tax increase for public safety and education. (Did transportation cure itself?) Lie about inheriting a budget deficit when Virginia law proves you’re wrong. Then lie about cutting spending when, in fact, the figures show you increased spending. Lie that the next budget is in deficit when it is only your own inflated revenue projections that are the problem even though they came in $1 billion above what was needed to cover the budget. Now say you “straightened out the mess in Richmond.” More than a con artist but without the lethal force used for a bank robbery. Somewhere between Old West gunnies and Marc Rich. There it is. Mark Warner, in his own unique class.

With Warner’s concerted effort of deception (and the re-writing of history) it is no wonder Governor Tim Kaine thinks he also can get away with it raising taxes despite his 2005 campaign no tax pledge:

“We just had a tax increase. I’m not going to be in for another one.” 

Which reminds me of a question raised here before, but has gone unanswered: Does Mark Warner support Tim Kaine’s billion dollar tax-increase plan?

Just four years ago, Virginians were asked to pay for a massive tax increase, the brainchild of former Governor and current Democrat U.S. Senate candidate Mark Warner and former Virginia Senator and lifelong RINO John Chichester. (Visit tomorrow for the untold background on this, the largest tax increase in Virginia history.) As a result, billions more dollars from working families in Virginia have poured into the coffers in Richmond. In the three state budgets since, state government has spent nearly $100 billion of your money. The result? They’re back for more.

Regardless of Governor Tim Kaine’s (contact him here) rhetoric about working families in Virginia expecting a “free lunch” for not wanting to send more of their hard earned money to Richmond, the fact remains that there is plenty of revenue in Richmond to pay for core government services. 

But for the politicians, there just isn’t enough money to pay for those services and everything else they want. There never will be enough for their voracious spending appetites, all while Virginia taxpayers get nothing close to a free lunch — and it is incredibly arrogant for the governor to suggest that we are.

This Monday, June 23, the General Assembly will meet at the capitol for what we’ve dubbed the “Special Tax Session” because, despite the rhetoric about a “transportation crisis,” there are no guarantees that revenue from any new taxes will go solely to transportation. Any new tax money will go into the general fund and be spent any way Virginia’s political elite wants it to be spent. It’s telling that one of the biggest supporters of the tax increase is the Virginia Education Association. Exactly what interest should the teachers union have in a tax increase for “transportation”? Their excitement clearly indicates they’ve been given a free run through the pork trough if the tax increase passes.

The lack of a guarantee that transportation will become a priority is just one of the many reasons that the General Assembly should reject the call for tax hikes. See our interview with Delegate Mark Cole (R-88, Fredericksburg) and his response about the raid on the Transportation Trust Fund. The fact that transportation spending makes up just 13 percent of the budget, while education makes up 40 percent and social services 30 percent, indicates that transportation never really has been the priority it should. To complain about a “crisis” now is disingenuous. If there is a crisis, it’s a crisis in leadership, not of citizenship. What leader, beside Jimmy Carter, criticizes his constituents?

But most importantly, to ask Virginia’s working families to pay even more in taxes when they are facing extraordinary and ever-rising gas and food prices, a collapsed housing market, job insecurity and a sluggish economy, is the unrestrained arrogance of elitism, of someone out of touch with, perhaps, “bitter” people. Your elected officials — especially your delegate and senator — must not feel this lack of restraint the governor apparently feels. Send a clear message to your representatives that you oppose higher taxes and fees.

Remember: The politicians will raise your taxes if they think you don’t care, because they can sell it to you as something necessary, as in transportation, then spend it any way they choose. So you must let them know you are paying attention. Click here and send an e-mail to your delegate and senator and urge them to oppose higher taxes. Then forward this link to your friends and family so they can make their voices heard as well.

The MSM in Virginia is today talking up a Virginia Commonwealth University poll taken recently that provides some “surprising” results in light of the upcoming special Tax Session of the General Assembly.

According to the poll, the issue the general public says should be the top priority of state government is, drum roll please — not transportation.

Its public education. Followed by jobs. Followed by the environment.

Oh, then comes transportation — nearly tied with illegal immigration.

Now, the environment, transportation and immigration are really in a statistical dead heat, but given all the political rhetoric concerning the “transportation crisis” one would think it would top the list. And while politicians in Virginia scramble for “solutions” to the “crisis” as they prepare to invade Richmond next month, Virginians don’t appear to be on the same page — either with the level of concern or the with ways to fix whatever problem exists. 

Now, one can argue over the implications of any poll. And taking this one too far and ignoring transportation altogether would not be a smart move either. 

Yet, the divide between our elected officials and the concerns of citizens seems to grow each and every day. Anyone who has spent time in Richmond knows how quickly legislators can lose touch with what people really care about. Too often their only information comes from “special interests” (oh yeah, we be one of ‘um) and the media. In the case of transportation there are two clear drivers — much of the business community in Virginia who are once again pushing tax increases on consumers, and politicians who simply want more revenue to spend (Dick Saslaw are you listening?) and will use any issue to push higher taxes. Citizens are not behind the wheel of this one (OK, enough with the puns).

But as we’ve said in previous posts: The June 23 special session isn’t really about transportation. It is about taxes — more specifically, raising them. The revenue increases that will result are in no way promised to future road repair or building. They will just mean more money for politicians to spend on the next “crisis.”

And the Great Divide gets even wider.

Now that we know — as if we needed confirmation — that Governor Tim Kaine will outline a tax increase for his transportation plan come Monday, it puts a certain former governor with a, shall we say, shady history on the issue of taxes, in a bit of a bind.

Will former Governor Mark Warner embrace the plan? If he does, it will explode his already gaping tax credentials hole into a crater. If he doesn’t, he gives the low-tax General Assembly Republicans all sorts of cover and undermines his hand-picked successor. What will it be: His natural appetite for taking away hard-earned money from Virginia’s families? Or, will will he throw his pal, in what seems to be the trend this Democrat political season, under the bus? Most likely, he’ll use the time-tested political dodge. But he won’t get away with it.

Look at his record of broken promises and reversals of position, which is piling up faster than dead bodies during whack frenzy last-season of The Soprano’s:  

• Promise: Finish the car tax elimination. Result: Didn’t even try.

• Promise: End the death tax. Result: Vetoed it.

• Promise: No tax increase. Result: Largest tax increase in Virginia history despite a surplus.

Which brings about another question: Since we didn’t get into the “transportation crisis” overnight, who didn’t get the job done before Governor Kaine? I mean, who was the governor between 2002-2006? Oh yeah, the same Mark Warner who wants raise our federal taxes as well (after months of denying it, he went on record yesterday saying he wants to let the Bush tax cuts expire). 

Not that these are tax issues, but adding to the skepticism of his veracity and trustworthyness, Mr. Warner now says he’s not for a date certain for withdrawal from Iraq. Really? This is what he said at the Jefferson-Jackson Dinner in February:

“And come January, 2009, we need to start to bring our brave troops home from Iraq. . . .” Sounds pretty certain to me.

He also vetoed a Virginia energy plan agreeing to off-shore drilling if the feds ever granted such permission. But at the Shad Planking April 16, he said:

“I’ve said in terms of offshore, we ought to take a look.”

Who can trust this guy? Tim Kaine better hope he can or his plan will end up in the same place those Soprano’s characters did. We continue to hope.