12 Reasons to Vote "NO"
Sales tax referendum

The Big Government/Big Business establishment in Hampton Roads Virginia will not be denied on their much-cherished referendum to increase sales taxes and institute a one percent use tax for transportation despite the facts.  We join our friends throughout Hampton Roads and in Northern Virginia to oppose Governor Warner and the General Assemblyís plan to increase taxes.

Voters of Hampton Roads will vote this November on whether to increase the sales tax in the region by 22% from 4.5 to 5.5 percent plus with the additional increased taxes devoted to increased highway construction and other transportation projects.  

Here is a complete compendium of all the reasons why the sales tax referendum is a bad idea, and why you should vote no if it does reach the ballot.

Reason One:  We already pay plenty of taxes, more than enough to finance a basic government function like roads and highways.  We should devote more of the taxes we are already paying to this central government function.

The root of the problem is that the state refuses to use any income tax revenues and almost none of the current sales tax revenues for transportation.  As a result, per capita state spending for transportation adjusted for inflation has not increased since 1979.

If we would just modestly restrain the growth of other state spending, we would have plenty of money to meet the stateís transportation needs.

Reason Two: Total state spending has been soaring in Virginia in recent years.  Over the previous 4 years, state spending rose by close to 40%.  The state budget for the next 2 years just adopted in the last session of the legislature increased state spending by 7% over the last budget, in the midst of a purported grave budget shortfall.

Why didnít they use some of this increased spending to pay for supposedly critical transportation needs?  How can they come to us now and say we must increase our taxes for a basic public service like roads and highways after they have so recently been spending like undisciplined children on everything else?  They need our tough love No vote to change their behavior.

Reason Three:  Government spending in the state has already been increasing too fast.  If we raise taxes now to increase transportation spending, total government spending will increase even faster.

Virginia has a history of fiscal conservatism.  Most Virginians want to keep it that way.  But at the rate we are going Virginia will ultimately be no different from fiscally liberal, Big Government, New York or Massachusetts.

Reason Four:  Taxes in Virginia have been increasing 20% faster than incomes since 1979.  That means state and local taxes are taking a bigger and bigger share of your income.  Indeed, residents in most cities and counties in Hampton Roads experience property tax increases due to rising assessments that exceed percentage growth in their wages and/or pensions.

If sales taxes are increased by 22% as proposed in the referendum, this trend of decreasing familiesí disposal income due to additional taxes will be increased even further.  To the contrary, we need to stabilize taxes in the state so they will grow no faster than incomes, and not become a bigger and bigger burden on working people and retirees.

Reason Five:  We already tried this and it didnít work.  In 1986, the state increased sales taxes by 1/2 percentage point with the funds devoted to transportation.  Result: the problem is worse today than then.

Reason Six:  Northern Virginians and Hampton Roads already pay most of the stateís taxes.

Why canít our great Hampton Roads legislators form a coalition with our Northern Virginia legislators to get a bigger share of what our region is already paying to Richmond, to meet our transportation needs?  How can they ask us to increase our taxes if we want improved roads and highways, while the rest of the state continues to rip off what we are already paying?

Indeed, if we just got back our proportionate share of the gas tax and other transportation revenues and the Commonwealth revisited its overall priorities for general fund revenue, Hampton Roads have enough money right here to address the projects VDOT just had to cancel and significantly delay. 

Why canít our Senator Warner and Allen working with our regionís Congressman do for the Marine Terminal By-Pass/third crossing what they did for the I-95N Wilson Bridge and formulate a creative federal-state funding solution?  Instead of leadership we are being told that because the Governor and General Assembly cannot do their job, we, the voters have to live with their failure or pay higher taxes. The right answer is just say NO, and tell Governor and General Assembly to take their bad deal back and find a better solution.

Reason Seven:  Increasing the sales tax 22% will hurt the economy.  Moreover, higher sales taxes in Hampton Roads will put the region at a competitive disadvantage compared to the rest of the state.  Specifically, counties bordering Hampton Roads will siphon away retail sales especially from businesses just inside the proposed tax boundaries. 

The sales tax increase creates an added incentive for Internet purchases, and creates an added incentive for underground economy/cash transactions. In addition, raising taxes during an economic downturn and when so much equity has been eliminated by market conditions is particularly counterproductive.

Reason Eight:  Raising sales taxes increases the tax burden on low and moderate-income people in particular - for they must spend a bigger share of their incomes on taxable goods and now services.  In addition to sales and use taxes being regressive, it is morally objectionable to ask those who have the least to underwrite urban sprawl.  If the referendum passes, millions now spent in small businesses generating profits and taxes for local government will instead flow to create a new regional bureaucracy with no road construction experience.

The special interests who will directly benefit from the projects but who will pay only a small portion of the tax, want the voters to believe we are under taxed and that we should pay higher taxes for roads to open new land for development when VDOT cannot afford to improve the existing interstate and major roads in the region. 

Why doesnít the referendum address improving the interchanges at Witchduck Road and Rosemont Road, and widening Virginia Beach Blvd in Norfolk?  Those projects would meet the needs of existing residents and not underwrite urban sprawl to the benefit of land speculators and other special interests that make major campaign contributions. 

The referendum question is the result of backroom deals in Richmond, not the public interest debated in the open.

Reason Nine:  The voters do not know what additional tax and fee increases the Governor and General Assembly have in mind, not to mention their own local governments. 

The Governor has already indicated he is looking for a 1/2-cent increase in the sales tax for education next year.  Additionally, there is a Governorís commission looking at recommendations to restructure how the State raises revenue. 

On top of this is local government real estate taxes increasing faster than income. The bottom line is the voters do not know the bottom line liability and yet we are being asked to co-sign a $6 billion dollar note.

The referendum question should read, ďI as a voter am willing to lower my personal living standards to finance $6 billion dollars of roads without any specific legally binding performance benefit from the public investment, with full knowledge that Iím exposed to additional unknown increased taxes for other purposes, and that recently VDOT cancelled and significantly delayed projects addressing immediate transportation needs will not be funded.Ē 

Now that is true disclosure of what you are being asked to approve.

Reason Ten:  Do we really want to increase highway construction as much as special interests are demanding?  Every voter I know does not.

If you are for cost effective and efficient government, if you are for smart growth, if you are against promoting urban sprawl, if you are against creating a new regional taxing authority, if you are for holding State government accountable for meeting its obligations, and you are for funding transportation needs in your community, then you should be voting no on this referendum.

Reason Eleven:  This is not going to be a fair referendum fight.  Big Business supporters of it are going to be outspending the low tax, smart growth and environmental opponents of it by more than 10 to 1. 

In fact your tax dollars are going to be used to convince you that you are under taxed and that without the passage of this referendum Hampton Roads will face an environmental calamity. 

However, fear tactics are not backed by science or everyday commuter logic.

Not one nickel of the proposed referendum will go to address improving the interstate to the Naval Base or downtown Norfolk. Even the so-called third crossing is not a true ďthird crossingĒ.  The proposed third crossing is in fact a by-pass connecting the Norfolk Marine Terminal/Terminal Blvd to the existing Monitor Merrimac Tunnel crossing with an additional tunnel, but it does not add capacity to I-64 Hampton. 

The chief benefactor of the Marine Terminal By-pass is the Port Authority and yet the Port Authority as a state agency is not subject to state and local taxes.

Ever wonder why the referendum doesnít call for an increase in any business taxes, port fees, or require local governments to contribute from existing revenue sources to finance in whole or in part the proposed projects? 

The proponents believe that through slick television and radio ads they can make you believe a bad deal is best deal you can get.  Do not believe it.  The proponents are addicted to high taxes and big spending. 

You the voters need to practice tough love.  Lets not turn Hampton Roads into another New York City metropolitan area. 

Show us one place where more roads and higher taxes have reduced congestion rather than promoted congestion at a higher level.

Our good friends in Northern Virginia have a light rail system financed by the entire nation, a mass transportation system heavily subsidized to include a regional gas tax, private toll roads, and an extensive road system, yet they still have congestion. 

Why?  If you donít adopt strong and restrictive land use policies, sprawl surpasses the added capacity and the situation gets worse.  

If voters act on their common sense and look behind the proponentsí message to their motivations for distorting the facts, the sales and use tax referendum should be defeated.

Reason Twelve:  To say that we should have a referendum on increasing taxes but not on tax cuts or any other issue is a joke.  Just as supporters of the sales tax referendum have said we should not be afraid of the voters on the issue (the voters are about to give them a good whipping on it, in fact), we should not be afraid of the voters on other issues as well.

The precedent has been set. 

Conservatives and liberals should join together and demand that the next legislature enact the right of initiative and referendum on the full range of issues, as has long been the law in many other states.

Every forum and media outlet in the state should insist on 2-sided debates on the issue rather than one-sided Big Business/Big Government presentations.

For more information:

Virginia Taxpayers Alliance at www.vbtaxpayer.com  

Chairman, John D. Moss at 363-7745 or tdmoss@msn.com

See also:  VB Taxpayer Alliance Press Release