Two Northern Virginia delegates want Virginia to finish what it started in 1998 and jump-start the stalled elimination of the car tax.
Del. David Albo, R-Springfield, and Del. Jeff Frederick, R-Prince William, have introduced bills that would wipe out the tax levied on the first $20,000 of a vehicle’s value.
A promise of ridding the commonwealth of the tax carried Republican Jim Gilmore to victory in the 1997 gubernatorial election, but in 2004 a slowing economy forced the brakes to be put on the scheduled elimination (it was frozen at a 70 percent reduction, costing Virginia $950 million annually).
Under the proposals, the tax would continue to be reduced every year by 5 percent as long as the state’s revenues also increase by 5 percent. Fully eliminating the tax would cost the state as much as $718 million more annually, according to the Department of Taxation.
“We promised we would keep reducing the tax when we had money,” Albo said. “It was OK to freeze it in 2004 because we didn’t have the money. Now we do have the money, so we should keep our promise.”
Despite Virginia’s $1 billion surplus, any tax-cutting legislation will face a tough road to passage. Gov. Tim Kaine and lawmakers have many ideas about how to spend the money.
“It is not going to happen,” said Del. Vincent Callahan, R-McLean, who chairs the budget-writing House Appropriations Committee and sponsored the 1998 legislation eliminating the tax. “I support the theory of getting rid of it, but we don’t have the money for it.”
Del. Mark L. Cole, R-Spotsylvania, doesn’t buy the argument that the budget won’t allow the tax to end. He wants to go further than restarting the elimination of the car tax and has introduced an amendment to Virginia’s constitution outlawing the tax.
“It is hard to make the argument that we do not have enough money in the budget to fully eliminate the car tax,” he said.
But other lawmakers point out that Virginia needs to increase spending in several areas, especially transportation and health care.
