THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, August 5, 1996 TAG: 9608020007
SECTION: FRONT PAGE: A6 EDITION: FINAL
TYPE: Editorial
LENGTH: 62 lines
George F. Allen made a strategic mistake. He got himself elected governor of a low-tax state whose previous governor had cut state services and education in order to avoid raising state taxes during a recession.
Had Allen been elected governor of a high-tax, high-service state like New Jersey or New York, he'd have been able to follow his natural instincts and cut tax rates right and left. He'd have been a conservative hero, maybe even Bob Dole's running mate.
As it is, however, his fiscal policy has received a low grade from the Cato Institute, an oft-quoted, libertarian, free-market, Washington think tank. Cato's philosophy might be summed up with the words: less government, lower taxes - if any.
Although clearly a fiscal conservative, Allen was not pure enough for Cato, which gave his fiscal policy a C. The fiscal policies of three governors received A's; and 16 governors, including four Democrats, got B's. Cato handed out 16 C's, seven D's and four F's. Fiscal policies for three states weren't graded because the governors had been in office less than a year. Alaska's fiscal policy wasn't graded because that state depends mostly on revenues from natural resources.
Among governors elected in 1993 or 1994, Allen scored a puny 40 points, compared with New York Gov. George Pataki's robust 80. Pataki cut taxes.
In its report, Cato was partially understanding of the obstacles Allen faces in Virginia. It says:
``Allen has had a frustrating time of it during his three years in Richmond. In 1994 he proposed a five-year $2.1 billion tax cut - a reduction in the personal income tax and a phase out of the locally collected business gross-receipts tax - to be paid for through cuts in welfare, education and the state work force. But throughout his term he has feuded with a Democrat-controlled legislature, and his tax and spending cuts were shredded.
``Allen made the November 1995 state legislative elections a mandate on his tax-cutting agenda but failed to win majorities in either house.''
Then the report explains why Allen was graded low - for not trying a second time to cut taxes.
``Allen's 1996 budget was a complete capitulation to the big spenders in the legislature: the tax cut was abandoned, school spending was increased by nearly $1 billion, and his request for funding for school vouchers was dropped. The budget Allen signed into law increases spending by 6 percent at a time when most other states are cutting spending.
``The Washington Post recently described the new, compromising Allen as the `kinder, gentler governor.' ''
Cato gives Allen credit for welfare reform with a tough work requirement, for relief for small businesses from the gross-receipts tax and for the creation of 90,000 new jobs.
But that's still only enough to earn Allen a C. Being pure enough gets harder every year. The report neglects to mention that three former governors, two of them Republicans, along with a phalanx of state business leaders opposed Allen's proposed cuts in education. Neither does the report mention that, by national standards, Virginia taxes already were low when Allen assumed office.
``The tax-cutting, combative Allen,'' the report says, ``was preferable to the accommodationist.''
Not everyone agrees. We believe the accommodationist Allen is an improvement. What he has accommodated are the legitimate needs of Virginia. by CNB