DATE: Thursday, August 14, 1997             TAG: 9708140006

SECTION: LOCAL                   PAGE: B11  EDITION: FINAL 

TYPE: Opinion 

SOURCE: Patrick Lackey 

                                            LENGTH:   96 lines

THE RACE FOR GOVERNOR: WHY CANDIDATES' TAX PROPOSALS ARE WACKY, WACKY, WACKY THE PURPOSE OF BOTH PROPOSALS APPEARS TO BE BUYING VOTES.

Suppose economic growth increased state tax revenues until there was more money than the state needed.

Suppose a Virginia gubernatorial candidate proposed returning this surplus to localities in a way that gave roughly twice as much to Northern Virginia as to Hampton Roads, though both have the same population.

That would be a wacky way to distribute the surplus, wouldn't it?

Suppose a gubernatorial candidate proposed returning this surplus to localities in such a way that just seven Northern Virginia counties got 53 percent of all state surplus money going to the 95 counties. The wealthy counties would wind up with more than their share, the poorer counties with less.

That would be a wacky way to distribute the surplus, wouldn't it?

Or how about a plan to distribute the state surplus to residents based on a local tax that varies wildly from locality to locality, a plan that calls for freezing that current tax rate in each locality forever - never mind future needs? It would reward localities that have voted themselves high tax rates, at the expense of localities that had voted to keep taxes low.

That would be wacky way to distribute the surplus, wouldn't it?

And yet a campaign proposal by Republican gubernatorial candidate James S. Gilmore III would do all of the above - favoring wealthy, high-tax localities over poorer, low-tax localities, and not just for a year but forever.

Gilmore proposes using funds from a state surplus to pay localities to stop collecting the personal property tax on private cars, trucks and motorcycles - up to $20,000 in value for each vehicle. For every dollar the localities didn't collect from vehicle owners, they would receive a dollar out of the state surplus.

Gilmore's plan gives the lion's share of the state surplus to localities with high property tax rates and lots of property. Thus it heavily tilts the distribution of the surplus money to Northern Virginians, where personal property taxes are high and residents, being comparatively wealthy, have more and nicer vehicles.

In fiscal 1996, according to the Virginia Association of Counties, 34 percent of personal property tax revenue from motor vehicles in all cities, counties and towns was collected in Northern Virginia, compared with 18 percent in Hampton Roads, 14 percent in the Richmond area and 34 percent in the remaining 86 counties, 25 cities and 190 towns.

The total annual amount eventually at stake here probably is between Gilmore's prediction of $620 million and the Virginia Municipal League's prediction of $1.37 billion. That's a lot of surplus to be distributed every year. How there will be a surplus during economic downturns sure to come is a mystery.

Charles Curry, president-elect of the counties association and chairman of the Augusta County Board of Supervisors, called Gilmore's proposal a ``reverse Robin Hood plan,'' because it distributes state tax money from poor localities to wealthy ones. He's right.

Democratic gubernatorial candidate Donald S. Beyer Jr.'s me-too proposal for distributing the supposed state surplus is slightly less wacky that Gilmore's, mainly because it's smaller. But it, too, represents public policy at its worst.

The purpose for both candidates' proposals appears to be buying votes, rather than returning a state tax surplus to voters in a sensible, fair way.

If there does turn out to be a state surplus, why not cut the state income tax rate or the sales tax rate? Why not return it to the people who paid it?

Instead, under Gilmore's plan, a Bath County owner of a $15,000 car escapes paying a $30 personal property tax, while a Fairfax County owner of a $15,000 car gets out of paying $568.50. Thus Bath County receives $30 from the state, to compensate for the $30 it didn't collect from the owner, and Fairfax County receives 19 times as much, to compensate for money it didn't collect. For the same car, the tax in some localities would be in the $100s, in some localities the $200s, in some the $300s, and so on, all over the map.

Distributing a state surplus according to wildly varying local property tax rates is wacky, wacky, wacky public policy. The effect is to transfer some state tax money collected in Bath County, which has the lowest personal property tax rate in the state, to wealthy Fairfax County.

Come to think of it, why should the state surplus, assuming it materializes, be distributed only among private vehicle owners? It wasn't collected only from vehicle owners.

It would be far fairer, albeit illegal, if the candidates simply said, ``Vote for me this once and you're receive $150 a year forever.'' Or maybe $200 or $300. Details could be worked out.

Voter turnout would reach an all-time high, which of course is desirable. And the surplus would be distributed more equitably among Virginians.

Of course Gilmore is counting on a Bath County resident who owns a $15,000 car to vote for him in order to avoid paying $30 in personal property taxes, even though Gilmore's proposal, if implemented, would send state dollars to Northern Virginia that might have helped meet Bath County's school, health, transportation and other needs.

At first glance, Gilmore's tax proposal seems especially wacky because it confers the biggest rewards on Northern Virginia, the political base of his opponent, and penalizes the parts of Virginia that support Gilmore.

But maybe that's not so wacky. If the people getting the least continue to support Gilmore, while the people supporting Beyer decide to shift their votes to Gilmore in exchange for $500 or $600 or even $700 a year forever (far more than Beyer's faint echo of an offer), Gilmore is our next governor. MEMO: Mr. Lackey is an editorial writer for The Virginian-Pilot.

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