DATE: Friday, November 21, 1997             TAG: 9711210671

SECTION: FRONT                   PAGE: A1   EDITION: FINAL 
SOURCE: BY WARREN FISKE, STAFF WRITER 

DATELINE: FREDERICKSBURG                    LENGTH:   78 lines

GILMORE'S CAR-TAX CUT UNDERESTIMATES COST, ANALYSTS SAY SOME DEMOCRATS, REPUBLICANS CALL FOR SCALING BACK OF POPULAR PLAN

Gov.-elect James S. Gilmore III may have understimated by more than 50 percent the cost of his campaign pledge to abolish the tax most Virginians pay on their cars, state Senate budget analysts said Thursday.

The finding brought calls on Gilmore from some Republican and Democrats leaders alike to consider scaling back the tax cut should it come at the expense of funding schools, colleges or other vital needs.

``There's a tremendous difference between these figures and the ones we've seen from Gilmore,'' said Sen. Stanley C. Walker, D-Norfolk. ``We're miles apart and yet the people say they want relief on the car tax. To work this out, there's going to have to be some give-and-take.''

Senate Republican Leader Joseph B. Benedetti of Richmond said: ``Obviously, if the cost is going to be much higher than anticipated, we're going to have to scale it back.''

Gilmore has said he would be willing to negotiate with the General Assembly, but has warned that he would not agree to a wholesale compromise of the proposed tax cut which is widely credited with fueling his runaway victory in Nov. 4 election.

Staff members of the Senate Finance Committee estimated the cost for the first two years at between $404 million and $531 million. They warned that the appropriation would eat up almost half of new revenues the state is expected to collect over the next two years and limit opportunities to invest in education and social services.

The Republican governor-elect did not attend a state Senate budget briefing at which the estimates were unveiled. But David Anderson, co-director of Gilmore's transition office, expressed confidence that there would be ample money to begin a full-scale version of the tax cut.

Anderson pointed to projections analysts released Thursday of an unencumbered $1.1 billion budget surplus available to the General Assembly over the next two years. That's more than twice as much as the worst-case estimate of the cost of implementing Gilmore's tax cut over the next two years, he noted.

``There's fundamentally good news here,'' Anderson said. ``What the budget surplus says is that the tax cut can be accomplished. I'm encouraged.''

Walker noted, however, that the state faces $1.7 billion in budget requests, many of them coming from public schools and universities. ``Something has to give,'' he said.

The analysts estimated the five-year cost of phasing out the tax between $2.1 billion and $2.8 billion, depending on how Gilmore resolves a variety of unknown details about his plan during the next two months. The Republican insisted throughout this year's campaign that his popular proposal would cost $1.6 billion over five years.

Gilmore, who will be inaugurated Jan. 17, has pledged to push the General Assembly this winter to appropriate installments for the first two years of the repeal, which he said would cost a total of $260 million.

Thursday's was the second report this year that disputed Gilmore's numbers. When the Virginia Municipal League said last June that the Republican seriously underestimated the cost of his plan, Gilmore said the findings were inaccurate and denounced the group as a ``big tax lobby.''

This time, however, the Gilmore camp did not dispute the figures or the motives of the bi-partisan Senate Finance Committee. The Republican is seeking another estimate from the Department of Motor Vehicles.

Gilmore has pledged to eliminate the personal property tax on the first $20,000 of assessed value for all personally-owned vehicles. He said his plan would wipe out the levy on 91 percent of the cars in Virginia.

``We're looking to provide the tax relief we promised to voters during the campaign,'' Anderson said.

The findings gave several Democrats a much-awaited opportunity to snipe at Gilmore's plan. ``The projections confirm my judgment that this is nothing but a scam,'' said Sen. Joseph V. Gartlan Jr., D-Fairfax.

But several Republicans predicted that once the rhetoric ended, legislators would have little choice but to go along with Gilmore's popular plan or face the wrath of voters in 1999.

``I feel safe in saying that you won't find more than 5 of the 40 senators sitting at this table casting a vote against cutting taxes,'' chuckled Sen. Kenneth W. Stolle, R-Virginia Beach. MEMO: Staff writer Ledyard King contributed to this story. KEYWORDS: CAR TAX VIRGINIA JAMES GILMORE

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