ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, July 31, 1996 TAG: 9607310086
SECTION: EDITORIAL PAGE: A10 EDITION: METRO
GOV. GEORGE Allen doubtless would like to include a tax cut in his legacy when he leaves office in January 1998. Most governors would, but especially a young governor with an interest in running for other office.
Tax reform certainly is needed, and it should include tax cuts. But tax cuts that would impede state and local governments' ability to meet their increasing responsibilities would not be justifiable, whatever the governor's political agenda.
The State Department of Education, for example, has recently identified some $6 billion in public-school construction and maintenance needs - roughly the same amount as Virginia's entire public-education budget for the next two years. Shifts to states and localities of heretofore federal spending responsibilities, from mass transit to welfare, also are expected to descend fast and furiously on the commonwealth.
Revenue-depletion measures, in this light, are an idea whose time has not yet come, however much Allen might wish it had. And yet, there he goes again - basically instructing a new commission to look for ways to reduce state and local taxes.
The governor hinted broadly that he'd like the commissioners to revive the $2 billion tax-cut proposals he made earlier - ill-advised notions properly quashed by the legislature. (Allen wanted to end local-option business, professional and occupational license taxes, known as BPOL, pinching many local governments' budgets without offering a meaningful or long-term alternative. He also wanted to reduce income taxes, but the tax savings averaging about $33 per year for middle-income families would have come at the expense of state services. As popular as tax cuts usually are, the public didn't take a shine to Allen's ideas.)
Which isn't to say the commission should do nothing. A comprehensive re-examination of state tax policies is overdue. The focus, though, should be on the fairness of the current tax structure - including the heavy reliance on local property taxes for school funding, and the patently regressive inclusion of food items under the sales tax.
School-funding disparities could be reduced and the food tax eliminated by adjusting other taxes without diminishing the state's revenue base. This would mean significant tax relief for Virginians who need it most - the working poor. And Allen couldn't hope for a better legacy than to have these measures accomplished on his watch.
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