DATE: Sunday, April 13, 1997                TAG: 9704110025

SECTION: COMMENTARY              PAGE: J5   EDITION: FINAL 

TYPE: Opinion

SOURCE: MARGARET EDDS

                                            LENGTH:   86 lines

THE GOVERNOR'S RACE EVERYTHING YOU WANTED - AND LESS

Enough already.

The campaign for governor is barely under way, and already debate has degenerated into a spitting contest over who'll cut taxes most or raise them least.

Anticipating that Republican Jim Gilmore may formally launch his campaign with a major tax-cutting proposal, or at least a no-new-taxes pledge, Democrat Don Beyer spent last week saying what taxes he'd cut.

The Gilmore crowd trotted out a repertoire of one-liners in response.

``Don Beyer promising tax relief is like Dr. Kevorkian selling life insurance,'' volunteered Gilmore.

``Don Beyer talking about tax relief is like Bill Clinton talking about campaign-finance reform,'' said Mark Miner, Gilmore's press spokesman.

So which is it? Bill Clinton or Jack Kevorkian?

How about neither.

You could critique Don Beyer's seven years as lieutenant governor in a lot of ways. If you were a liberal, you could say that he sold out to Republicans on welfare reform. If you were a conservative, you could complain that he's focusing too much attention on teacher salaries and not enough on teacher accountability.

But a tax junkie? Hardly.

What tax increases has Beyer ballyhooed over the past seven years? None. In fact, some Democrats complained that he was too slow to resist Gov. George F. Allen's call for a major tax cut two years ago. Beyer eventually joined the opposition, but he was far from the leader of the pack.

The spinmeisters of the Beyer and Gilmore campaigns should refresh their memories on what happened to that proposed tax cut. It failed. And did the people rise up in protest when they had an opportunity in legislative elections that fall?

No. In fact, despite an unprecedented effort by the governor and the GOP, Democrats retained their majority in the House of Delegates and the parties battled to a 20-20 tie in the Senate.

From here, it looks as if the tax cut failed because Virginia is not Massachusetts, New York or Hawaii. Almost any way you slice it, Virginia is a low-tax state. Moreover, we were one of only two states that did not raise taxes during the early 1990s recession. And since then, Allen has kept a tight rein on state spending.

The reason the tax cut failed, I think, is that a one-size-fits-all, all-tax-cuts-are-good philosophy didn't work in Virginia. It was clear that some important services were going to suffer if revenues dipped.

Consider these figures from Congressional Quarterly's latest rankings of states: Virginia ranked 44th in state and local taxes as a percentage of personal income. In sales tax per $1,000 of personal income, it ranked 42nd. The state was 45th in corporate income tax, 36th in motor-fuel taxes per $1,000 of personal income and 50th in the state levy on tobacco.

The only tax Virginians paid at above-average rates was the income tax. We ranked 21st in income tax per $1,000 of personal income and 16th in income tax paid per capita.

That ranking is the basis for a recent call by the non-partisan Thomas Jefferson Institute for Public Policy for a cut in the state income tax. The author of the study is Dean Stansel, a fiscal-policy analyst at the libertarian Cato Institute.

Stansel, who subscribes to the Cato philosophy that all taxes inhibit growth, believes the Virginia economy would expand at a faster pace if the income tax were lower. This is a legitimate area for philosophical debate, but there are plenty of economists who would challenge his conclusion.

If Virginia should pursue an income-tax cut, policy setters would have to weigh uncertain economic benefits against the risk of losing revenues when so many needs are unfunded and the state's budgeting methods are increasingly suspect. In recent years, Virginia has depended increasingly on the state lottery, an assortment of one-time fixes such as the 1996 Trigon settlement, and borrowing for construction as ways of making ends meet.

Balanced against that are an almost universally acknowledged crisis in public-school contruction, per- pupil funding of higher education that has slipped to 44th in the nation, a growing prison population and a $2.5 billion gap between available funding and highway construction projects approved by the Commonwealth Transportation Board.

It may be that neither Gilmore nor Beyer believes we can afford changes in these areas. Or they may hope that revenue growth, which by some estimates will top $2 billion over the next four years, will pay for any initiatives.

But before the tax debate is reduced to a name-calling race to see who can cut most, the candidates should talk more forthrightly about the fiscal state of the commonwealth. Voters should demand that those who aspire to lead the state show us more than the money. Show us the vision as well. MEMO: Ms. Edds is an editorial writer for The Virginian-Pilot.

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