Knights of the Anti-Tax Roundtable, Part II
Blue Dog Tales

By Steven Sisson
ValleyBlueDog@aol.com

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 games."


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 Taxpayers Alliance.
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," Purves said.

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 spending increases.

"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 return."

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 more money."


Petition crusaders

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 establishments.
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
http://www.vademocrats.org/DM_Archive_2004/01.16/Griffith.asp

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 "good" Democrat?)

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 page.

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 be."

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.

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