of the Anti-Tax Roundtable, Part II
Political pundits have said that Sen. John Chichester, R-Stafford, and
Gov. Mark Warner are both playing the classic political game of
bait-and-switch with their recent tax-increase proposals. Chichester's
higher tax increases could be a ruse in order for the public to more
readily accept Warner's lesser tax increase.
"If Sen. Chichester has introduced his plan solely for the purpose of
making the governor's plan seem more reasonable, that certainly does not
advance the cause of good government," said Jeff Dircksen of the
National Taxpayers Union.
Dircksen said it's more important that "both Sen. Chichester and the
governor ignore the simple economic reality that taxes matter. Work by
Ohio University economist (and NTU board member) Richard Vedder shows that
in the 1990s, '2.6 million Americans moved out of the high tax states into
the low tax ones.' "
Dircksen explained: "That is a migration of about 1,000 persons per
day for each business day during this period of nearly a decade. As a
low-tax state, Virginia has benefited from this migration pattern.
"Taxpayers should be more concerned about the long-term economic
impact that either of these unnecessary tax hikes will have on Virginia
than whether Sen. Chichester and the governor are playing political-shell
More to the point
Virginia Club for Growth president Peter Ferrara was more direct with his
comments concerning his organization's thoughts about the tax hike:
"Chichester's tax increase is grounds for a recall."
The public has read a lot about the $6 billion budget cut and the
possibility of losing the AAA Moody bond ratings. But are those budget
deficits and bond ratings being used as smoke and mirrors to encourage
favorable public response to a tax increase?
Ferrara said: "The budget has never been cut by $6 billion. Annual
state spending is up $2.5 billion since Warner entered office. The bond
rating is threatened because Warner spent the rainy-day fund with his
uncontrolled spending increases.
"The repeated default of local government bonds in Virginia over the
last 10 years is enough by itself to downgrade the state's bond rating.
Those defaults are due to uncontrolled spending at the local government
level in the state. To solve the budget problem, I would avoid all tax
increases and just increase spending in the new budget on every item by 11
percent instead of 13 percent," said Ferrara.
"The Virginia budget is growing 50 percent faster than population and
inflation," said Arthur G. Purves, president of the Fairfax County
Purves added, "Warner wants to grow the budget at an average annual
rate of 6 percent, even though the combined growth rate of population and
inflation is a bit under 4 percent.
"Warner is raising taxes to destroy families, perpetuate dependency
and poverty, and produce more clients for our prisons," Purves said.
"He has to, as those are the policies that keep the Democrats in
power. The Republicans are afraid to challenge them because it is too easy
to spin an anti-welfare position as being anti-compassion.
"Since Gov. Warner took office, the state budget has increased by
about $2.5 billion. The governor is therefore misleading the citizens of
Virginia when he says that he cut the budget by $6 billion. He wanted to
raise this year's budget by $4.5 billion instead of $2.5 billion and spend
an additional $2 billion in fiscal-year 2002 and fiscal year 2003,"
He added, "Virginia jeopardized its bond rating by selling too many
bonds. Do you expect Moody to say, 'Don't sell so many bonds?' Ten years
ago, revenues from bond sales were 10 times larger than the debt service.
Now bond-sale revenues are about the same as debt service."
Inside the problem
NTU's Dircksen explained how the governor manipulated those budget
numbers: "When politicians congratulate themselves for cutting the
budget by $6 billion, the public assumes that spending actually went down
by $6 billion. It didn't.
"Between fiscal years 1997 and 2001, the Virginia budget grew by an
average of 9 percent per year. Between fiscal years 2001 and 2004, the
budget grew 4 percent per year. The governor and other tax-hike supporters
suggest that traditional economic growth (5 to 5.5 percent) will not be
enough to meet their spending demands; they want 8 to 9 percent revenue
growth to fund their new spending programs."
He continued: "Virginia does not have a revenue problem; it has a
spending problem. If the governor and other tax-hike supporters were truly
concerned with the Commonwealth's bond rating, they would be looking for
ways to either reduce actual spending or at least restrain the rate of
"The Governor might also want to implement the recommendations of the
Wilder Commission that found 'achieving $750 million in permanent annual
savings over a two- to four-year period is a realistic and feasible goal.'
"The National Taxpayers Union has put forward several policy
recommendations that would bring sense to the Commonwealth's budget,
including a sunset-review commission based on the Texas Sunset
Commission," Dircksen said. "As a permanent legislative body,
the Commission would be charged with reviewing the effectiveness of state
agencies and programs. Those that are no longer needed or are no longer
effective would be eliminated. The State of Texas estimates that for every
dollar spent on the sunset process, it has received $42.50 in
Dircksen concluded that "clearly, the governor and the General
Assembly have less economically disastrous alternatives available to them,
if they were truly concerned about protecting Virginia's bond rating. The
bottom line is that the governor wants to raise taxes so that he can spend
The Warner anti-tax coalition recently held a joint press conference in
Richmond where Ferrara held up a scarlet "T" made of
construction paper, which he said would be "emblazoned on his or her
forehead for the next 10 years" - referring to the foreheads of
General Assembly members who vote to increase taxes, that is.
That brought a terse response from Del. Harry Parrish, R-Manassas, who
joined Hanger by denouncing the anti-tax groups as anti-government
Both Parrish and Hanger were celebrated as "good" Republicans
who have challenged the anti-tax political rhetoric on the Democratic
Party of Virginia on-line newsletter, The Demo Memo
That was a real shocker.
(Rhetorical question: Do you suppose this old Valley Blue Dog will ever
grace Mr. Shawn Smith's Republican Party of Virginia media releases as a
Last week, a coalition of anti-tax organizations initiated a Web site -
"Coalition to Stop Governor Warner's Tax Increases" - with an
on-line petition drive that kicked off on Jan. 14 http://www.notaxhike.net
Sen. Ken Cuccinelli, R-Centreville, who is an avid anti-tax and
budget-reform advocate in the General Assembly, is sponsoring the Web
Dircksen said "NTU will work with its members, coalition partners,
and members of the General Assembly who are concerned about taxpayers to
defeat any proposed tax hike."
Don't think these tax watchdogs have singled out punishment for Gov.
Warner, either. That argument can be debunked quickly.
The Citizens Against Government Waste, the Club for Growth and the
National Taxpayers Union, along with other anti-tax organizations, accused
the Republican majorities in Congress of spending like "drunken
sailors" last week.
President Bush also received some strong language from the conservative
groups as well. Spending is up for the third straight year. The
conservative groups are alarmed that federal spending increased 13 and 12
percent in the past two fiscal years, respectively.
"NTU will work with any member of the General Assembly, regardless of
party, who puts taxpayers' interests above the calls of special interests
for more spending and higher taxes," Dircksen said.
Purves said, "the Fairfax County Taxpayers Alliance concentrates on
research and numbers and not on the politicians. While all the FCTA board
members are Republicans or Libertarians, the FCTA is an educational
organization and does not participate in campaigns."
Camelot, or Tax-A-Lot?
Maybe it's time for another taxpayers' "Clean Sweep" like the
Americans for Tax Reform president Grover Norquist advocated back in 1992.
Most conservative-thinking Virginians believe we have a great opportunity
to push for real and honest budget reform in the Commonwealth, much like
Colorado, and advocate better performance based budgeting with the
Virginia Department of Transportation, the Department of Environmental
Quality and higher education.
Ferrara agrees: "Yes, such a limitation would give voters more direct
power and control over tax and spending issues, and protect taxpayers
against special interests.
"It would also increase economic growth, jobs and wages."
The public needs tougher legislation that holds state government
accountable, but rewards departments for saving taxpayers' monies. It's
the right time to change the system.
Dircksen further elaborated: "One of the recommendations that NTU
made last fall was for Virginia to adopt a Colorado-style Taxpayer Bill of
Rights. A TABOR (the acronym for the proposal) puts the interest of
taxpayers above the special interests who see state government as a 'sugar
daddy,' who is always willing to write another check at taxpayer expense.
"Only strong constitutional guarantees can protect taxpayers from
elected officials, however good or misguided their intentions might
But how can TABOR help Virginia?
Dircksen replied: "A TABOR in Virginia will help keep taxes and
spending on a rational basis. If Virginia had such a TABOR requirement in
place beginning in fiscal year 1984, taxes and spending could have grown
at 4.3 percent instead of 6.8 percent, meaning spending would be almost $9
billion lower today, with that money being funneled back into the private
economy to generate even more economic growth.
"The fiscal discipline that TABOR would bring to Virginia could have
substantial economic benefits. TABOR forces politicians to be responsible
and accountable. That's good government."
To read more about NTU's complete plan visit www.ntu.org/main/
Gov. Warner's bad budget excuses and AAA bond rating threat could be an
open door to budget reform legislation in the Commonwealth.
How can Democrats and moderate Republicans refuse budget reform when they
both claim this is the root cause to our fiscal predicament?
It could be a golden opportunity to advocate real budget reform in 2004.
Maybe it's time for these anti-tax knights to slay this tax dragon.