DATE: Saturday, November 1, 1997            TAG: 9710310004

SECTION: LOCAL                   PAGE: B6   EDITION: FINAL 

TYPE: Opinion 

SOURCE: BY VINCENT F. CALLAHAN JR. 

                                            LENGTH:   57 lines

TAXES: A RED HERRING IN VIRGINIA POLITICS

The furor over which candidate for governor of Virginia has a secret agenda to raise taxes and which will initiate a reduction in taxes calls for a history lesson.

During my 30 years in the state General Assembly I have seen both tax increases and reductions, all with nary a whimper of protest or praise from the tax-paying public - regardless of which course was taken.

Let's first take the tax increases championed by Virginia governors of both parties. As a Democrat in his first term in office in 1966, Mills Godwin pushed through a sales tax. Republican Linwood Holton, during his governorship in the early `70s, initiated an increase in the income tax and the gasoline tax. Republican John Dalton successfully proposed another increase in the gas tax during his tenure as governor, which began in 1978, and in 1986, Democrat Gerald Baliles led the effort for the largest tax increase in state history, with increases in both the gas and sales taxes to finance transportation.

Things began to change with the passage of the federal 1987 Tax Reform Act. Because Virginia conforms its income tax structure to the federal return, the General Assembly had two options: do nothing, or make adjustments to avoid lost revenue, as it had done in the past when federal actions would have required Virginians to pay more on their state tax returns. Virginia chose to do nothing, resulting in a loss of potential revenue in the past decade of between $200 million and $300 million a year.

Add to this the tax legislation that was passed by the General Assembly during this decade, and the cumulative effect is a loss of an additional $1.5 billion. When other tax legislation, both state and federal, is considered, Virginia taxes have been reduced in the past 10 years by a whopping $5.7 billion. In 1995, Gov. George Allen attempted to reduce income taxes even further, but his proposal fell on its face before a hostile General Assembly.

The most significant Virginia-initiated tax reduction in recent years was a 1990 action to give substantial breaks to people over 62. Other reductions have had an impact on everything from business to boats.

No taxes are popular, but some are more unpopular than others. The most hated levy of all, the personal-property tax, probably will be phased out eventually, if only because it was made the centerpiece of this year's election by Republican Jim Gilmore, who was followed reluctantly on the issue by Democrat Don Beyer.

I don't see taxes as the main issue in this gubernatorial race, however. By any gauge, Virginia is a low-tax state, ranking consistently in the bottom fifth of states. It also balances its budgets, its indebtedness falls within constitutional limits and it is one of only a handful of states to enjoy the coveted triple-A bond rating.

What my constituents have on their minds this election are transportation and education issues. These areas have to be Virginia's top priorities - that and the recognition that there is no such thing as a free lunch. MEMO: Vincent F. Callahan Jr., a Republican, represents Fairfax in the

Virginia House of Delegates. KEYWORDS: ANOTHER VIEW

Send Suggestions or Comments to webmaster@scholar.lib.vt.edu