THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, January 13, 1995 TAG: 9501130519
SECTION: FRONT PAGE: A8 EDITION: FINAL
SOURCE: BY DAVID M. POOLE, STAFF WRITER
DATELINE: RICHMOND LENGTH: Medium: 80 lines
Gov. George F. Allen peppered his televised tax-cut speech Wednesday with statistics selected to build a case that Virginians are among the most heavily taxed people in the nation and ``big government'' is spiraling out of control.
But statistics can be viewed any number of ways.
Allen cited some figures that are without dispute. Violent crime is on the rise. Student test scores are flat. College students are paying more for tuition.
But he also reeled off statistics that left an incomplete or even false impression.
The tactic was nothing new. Governors always select figures to magnify their achievements or dramatize the need for action. The stakes are higher this year, however, because Allen - to use his own metaphor - wants to take Virginia in a direction that it has never before traveled.
Here is a closer look at the two premises upon which the Republican governor has based his agenda for cutting state income taxes, phasing out local business taxes and ratcheting back many state services:
Virginia is a high-tax state. ``Virginia's individual income tax burden, on a per-person basis, is among the top third in the country,'' Allen said in his speech.
The statistic is accurate, but incomplete.
Independent analysts warn against singling out one type of tax when comparing tax burden among states. For instance, Floridians pay no income tax, but pay more heavily when it comes to sales taxes.
``If you want to look at (a state's) overall tax burden, you have to look at more than the income tax,'' said Kathleen O'Leary Morgan, a Kansas-based consultant whose study Allen used to make his high-tax claim.
Analysts say the most widely accepted method of comparing state tax burdens is to take into account the complete mix of state and local taxes that residents pay in each state.
Using that standard - total tax revenue for every $1,000 in personal income - Virginia's rank is near the bottom: 46th out of the 50 states, according to the Center for the Study of the States.
In fact, Virginia's tax burden relative to other states has fallen in the last decade, in part because Virginia was one of only two states nationwide that did not increase taxes to balance its budget during the 1990-92 recession.
State spending has spiraled out of control. In his speech, Allen argued that his three Democratic predecessors caved into the ``national infatuation with big government'' and caused state spending to grow faster than the growth of personal income and the rate of inflation.
``It has grown even faster than federal government spending,'' he said. ``In fact, over the last 10 years, state government spending in Virginia has increased at nearly twice the rate of federal spending.''
Again, Allen is correct. The state budget doubled between 1985 and 1994, at the same time federal spending increased 55 percent.
But Virginia was not alone when it came to outspending the feds.
The Federation of Tax Administrators has found that state and local budgets outpaced federal spending over the last 30 years.
Medicaid has greatly expanded Virginia's budget. The federally mandated medical program now costs the state more than $1 billion a year, which represents a five-fold increase since 1980. Medicaid is the largest component of the state budget, and legislators have little influence on it because of federal law.
An Allen administration analysis shows that the two other factors driving the state budget are a dramatic increase in the number of inmates held in state prisons and a rise in the number of children entering public schools.
While Allen blames his Democratic predecessors for a 12-year ``experiment'' in big government, the rate of general fund spending actually slowed slightly in the 1980s and stalled in the first four years of the 1990s, according to the staff of the Democrat-controlled state Senate Finance Committee.
The staff's figures show an average annual spending growth of 15.4 percent in the 1960s, 11.6 percent in the 1970s, 10 percent in the 1980s and 5.5 percent in the 1990s.
Allen's plan would increase spending by only .05 percent in the next fiscal year. by CNB