Anybid by the Kaine administration to unravel nearly $1 billion in annual car tax relief for local governments would amount to a “tragedy” for taxpayers, former Gov. Jim Gilmore told The Examiner on Tuesday.
The more than decade-old repeal of the unpopular levy stands as the signature policy accomplishment of the Gilmore administration, although its dent on state coffers remains contentious. Gilmore, a Republican who served as Virginia’s chief executive from 1998 to 2002, won election largely on the promise of killing the tax.
Virginia doles out $950 million a year to localities to replace the lost revenue from the repeal. Gov. Tim Kaine, who is set to roll out his final two-year budget plan Friday, has not ruled out scrapping or reducing that subsidy to help close a budget gap of as much as $3.5 billion.
“We know what they’ll do, they’ll just pass the car tax back on the public,” Gilmore said. “The localities aren’t going to take a hit, they were never intended to take the hit, they’ll just pass that back onto the working people of this state, and that would be a tragedy in this recession.”
Kaine has kept the details of his budget plan largely under wraps, although his administration has floated several ideas to raise new cash. Gilmore joins House Republicans and GOP Gov.-elect Bob McDonnell in warning Kaine to balance the budget solely through spending cuts.
Kaine spokesman Gordon Hickey would offer no details on the upcoming spending plan, saying only that “everything is on the table.”
The release of Kaine’s biennial budget will set off a month of chatter and dissection before the legislature goes into session in January, with both parties jockeying to foist the blame for slashing services on the other. The outgoing governor, by proposing dead-on-arrival tax increases, “wants to force the Republicans to make the cuts, so they will make the enemies,” Gilmore said.
But deep cuts, especially in education, are likely to be as unpopular in the Democrat-led Senate as tax increases will be in the Republican-majority House.
“I don’t think [Senate Democrats] are going to want to take the severe cuts that we’re probably going to take, they’d rather see a tax increase of some sort,” said Senate Finance Chairman Charles Colgan, D-Manassas.
