Posted on 02/20/2004 3:56:58 AM PST by chambley1
An extraordinary event in Virginia politics occurred Feb. 17 when Senate Majority Leader Walter Stosch, R-Glen Allen, and Republican Whip Ken Stolle, R-Virginia Beach, came to a meeting of the Republican state central committee- which I attended to explain why the entire Senate Republican leadership co-sponsored the largest tax increase in Virginia history.
Their bill would raise taxes by $2.5 billion over the next two years, more than two times what Democrat Gov. Mark R. Warner has proposed.
It would raise sales taxes 22 percent, general income tax rates by 10-to-15 percent, the gas tax 20 percent, and the cigarette tax by 1,000 percent (not a typo).
At the meeting, Stolle did the talking, effectively telling the Republican governing committee that the era of ``Big Government'' is back. For more than half an hour, he went over a litany of state government programs he insisted must be increased.
In just three years, from 1998 to 2001, state spending rose by one-third, with General Fund spending increasing by 41 percent. But Stolle defended those runaway increases, taunting the crowd to tell him what they would have cut out of the budget.
Like the rest of the campaign to increase taxes, Stolle's talk was basically a long recital of whoppers. He started by saying that House Republicans had come to the same conclusion about the need to raise taxes.
But the Senate's tax increase is five times larger than the House increase, which at least is focused on big business interests that have been fighting viciously for higher taxes for years.
Remarkably, Stolle also told the assembled Republicans that former Gov. Jim Gilmore had come to the same conclusion- one day after the Washington Post ran an op-ed by Gilmore opposing the tax increases.
Stolle also repeated the whopper that state spending has already been cut by $6 billion.
But besides the enormous increases from 1998 to 2001, spending increased another 11.6 percent since 2001. So there have been no cuts.
What happened is that Stolle and his new liberal special interest pals wanted to spend another $6 billion, but thankfully they didn't have the money.
This is what these proposed record tax increases are really all about. They are not needed to close any budget deficits. The current budget, with the highest level of spending in state history, is in surplus.
A tax increase is simply needed to satisfy the special interests.
In fact, the governor's own budget report shows that state spending can increase 11 percent without any tax increase at all. But that is not enough for the big-spending liberals.
The governor's plan would finance a 13 percent increase in state spending. In comparison, the whopping tax increase proposed by the far left, extremist GOP Senate leadership would increase spending by 16 percent.
Working people in Virginia are not getting wage increases of 16 percent, 13 percent, or even 11 percent. So how can the government demand more from them?
Stolle argued that it is somehow unfair to look at total state spending, since about half of the budget is financed by non-General Fund revenues that are dedicated for specific purposes and cannot be redirected to other programs, such as gas taxes, fees for services such as car registration, and federal funds.
Although the Senate proposes to raise both general and non-general spending, Stolle wants voters to look only at General Fund spending, which primarily includes revenues from sales and income taxes. But for taxpayers, this distinction makes no sense.
All of the state's revenues come out of the taxpayers' pockets. The same Virginia taxpayers who pay gas taxes, state fees, and even federal taxes also pay state income and sales taxes.
Even looking just at the state's General Fund, the tax increases are unjustified.
General Fund revenues are up 5.6 percent this year from last year. Without any tax increase, they would still be up another $1.8 billion in the new budget, an increase of about 7.5 percent.
Former Democratic Gov. Doug Wilder was much better for taxpayers than the current liberal left Senate Republican leadership.
Wilder faced real budget deficits and a poor economy in the early 1990s, but he responded by holding spending growth down, with no significant tax increases.
The result was that for the rest of the decade, Virginia enjoyed one of the fastest-growing economies in the entire country.
The Republican state central committee was uniformly negative regarding Stolle's presentation, though polite - perhaps excessively so.
But that will be irrelevant if anything like the Senate Republican tax increase plan passes.
The Republicans will then have lost the tax issue for many years. With that will also go their Assembly majorities and state-level offices for many years to come.
However, these Senate Republicans could care less about that. They think their own seats are irrevocably safe, and they have effectively already left the GOP.
Peter Ferrara is president of the Virginia Club for Growth.
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