Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, March 15, 1992 TAG: 9203160165
SECTION: EDITORIAL PAGE: F-2 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Long
Consider some of the building blocks for economic progress that government can help lay - an educated, healthy populace; a sufficient physical infrastructure; an efficient public sector with a fair and reasonable tax system.
Now consider that the '92 assembly:
Moaned about skyrocketing Medicaid costs . . . but did little to encourage a healthier population.
Short term, the assembly had few options. The Medicaid tab will jump in 1992-94 by about $300 million for the biennium to nearly $3 billion, or more than 10 percent of general-fund expenditures. There's no room to cut benefits, already at the low end of the scale. The bill must be paid.
For the middle and long term, however, the assembly could have taken steps - and didn't - to improve Virginians' health and thus, among other things, reduce the rise in future Medicaid costs.
Rejection of Wilder's proposed $60 million tax on health-care providers was no great loss, provided other revenue sources had been tapped. But the assembly, though extending the 4.5 percent sales tax to liquor, refused to increase the absurdly low state cigarette tax of 2.5 cents per pack. Not only would a higher cigarette tax help discourage smoking, it could have provided money to invest in cost-effective preventive health programs for infants and children in poverty.
Authorizing a handful of jurisdictions, including Roanoke County, to impose or increase local cigarette taxes was better than nothing. But it also highlighted the inefficiency of a system in which such authority is granted to one locality at a time, rather than uniformly to all localities.
Appropriated money for roads . . . but did so only tentatively.
Submission of a $443 million road-bond package and a 2-cent increase in the gas tax to the voters is, like the local cigarette-tax authorizations, helpful. A decent transportation system is part of the infrastructure requirements of a modern economy; the gas tax is an appropriate way to pay for it.
But as Senate Majority Leader Hunter Andrews observed, the assembly on its own authority could have raised the gas tax by 5 cents and thereby put the state's transportation program back on track without the bond-issue folderol.
That would have (1) averted the direct intrusion of legislative politicking into the ranking of transportation projects; (2) kept essential road money from being made hostage to a referendum whose outcome could well turn on extraneous factors such as regional jealousies; and (3) avoided questions about whether highways are sufficiently long-lived to be wisely funded by 20-year bonds.
If the tax-increase referendum fails (or Gov. Wilder vetoes the bill), the road-bond fuss would have been all for naught anyway, and needed road-building will be further delayed.
Found a few extra dollars to send the schools' way . . . but fell far short of the $1-billion biennial increase called for by the state Board of Education, and did nothing to halt the slide in state support for higher-education operations.
The governor's budget at least contained enough new school money for anticipated enrollment growth, and the assembly at least came up with $80 million to begin repairing the disparity in school funding between rich and poor districts. If teacher salaries are not to be frozen for another two years, however, the bulk of the money will have to come from the localities and the property taxes on which they already rely too heavily.
Of the $613 million in general-obligation bond issues approved for referral to the voters, more than 75 percent - $472 million - is for long-deferred construction on college campuses. That's good. But, meantime, new money for college and university operations is to come out of students' (and their families') pockets via another round of sharp increases in tuition rates. That hardly encourages a better-educated work force for the future.
Pleaded poverty . . . but generally ignored the fact that Virginia is a low-tax state and getting lower-tax.
As a percentage of personal income, Virginia in 1989 ranked 42nd in state and local taxation; in 1990, the last year for which U.S. Census Bureau figures are available, Virginia dropped to 44th. Taxes could be raised by hundreds of millions annually and Virginia would still rank low.
Yet the General Assembly could not bring itself even to raise from 5.75 to 6.25 percent the rate on a couple's taxable income above $100,000. The age subtraction for the elderly is of no benefit to the elderly poor, and is indefensible at a time when education and health programs for the young are starved for funds; its repeal was not even seriously considered.
With the modest tax steps that were taken, we have no quarrel. It should be noted, however, that those steps - deferral again of an end to the sales tax on non-prescription drugs, extension of the sales tax to liquor, the proposed gas-tax increase - are regressive forms of taxation, tending to bear most heavily on the poor.
The poorest 20 percent of Virginians pay a net of nearly 12 percent of their income in state and local taxes; the top 20 percent, only about 7 percent. The lawmakers didn't do anything about that, either.
by CNB