DATE: Friday, November 28, 1997             TAG: 9711280089

SECTION: LOCAL                   PAGE: B5   EDITION: FINAL 

SOURCE: ASSOCIATED PRESS 

DATELINE: RICHMOND                          LENGTH:   48 lines

FAST-GROWTH AREAS SEEK TO AVOID HARM OF TAX CUT

Fast-growing localities get a lot of money from the personal property tax, and they are insisting that any proposal to cut the car tax makes sure that the state keeps up with their growth.

Although Gov.-elect James S. Gilmore III's plan says the state will reimburse counties ``dollar for dollar'' for revenue lost from the personal property tax, R.J. Emerson Jr., New Kent County's administrator, wants a formula that will accurately compensate for growth.

``In a growing county, you're dependent on future revenue because income from the personal property tax grows quicker than state revenue,'' he said.

He said the way he understands the plan, the state will take a snapshot of a locality's revenue at some point in time and base the amount of reimbursement on that figure.

``But the growth of that reimbursement will reflect the growth of the state's revenue, not the county's,'' Emerson said.

Mark Miner, Gilmore's press aide, said the reimbursement formula is being developed, but it will take growth into consideration.

Miner said one option would reimburse localities based on what they would have received from the car tax, rather than on the state's revenue growth.

The Virginia Association of Counties is urging legislators to reimburse counties dollar for dollar.

Emerson's worries were echoed by officials from other jurisdictions.

Marilyn Blake, Hanover County's liaison at the General Assembly, said the fate of the car tax would be one of Hanover's priorities when the session opens in January.

``If the General Assembly does do away with the car tax, we want to be sure the county will see that revenue replaced,'' she said. ``We're concerned that it only replaces revenue lost based on one year, because we do have a fast growth rate. We need assurance that the formula will account for that.''

Gilmore's plan would exempt the first $20,000 of a vehicle's assessed value, to be phased in over five years.

He has estimated that replacing the car tax would cost the state about $1.6 billion over the phase-in period. The money would be made up through increased revenue from anticipated state growth. But state Senate budget analysts estimate the cost at $2.8 billion.

Earlier this month, Gov. George Allen said he would set aside about $260 million in the budget for the 1998-2000 biennium to pay for the first two years of the phase-in.

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