Governor Tim Kaine will unveil his budget proposal that he hands off to Governor-Elect McDonnell on Friday. Virginia faces a $3.5 Billion shortfall over the next 2 years. One place this money can be made up in part is to repeal the car tax. Currently, Virginia is picking up the tab for about a billion dollars of this money because it reimburses localities for the difference so there is no local shortfall.
Few Republicans are happy with the car tax. They want it eliminated completely. Democrats supposedly want it reinstated because of the funds it robs from the state. Most people are just glad to be paying a couple hundred dollars tax rather than close to a thousand dollars per year per car.
Sources report that Kaine is considering reopening this debate and modifying car tax as part of his budget blueprint. McDonnell has said he will not raise taxes and that he considers the car tax situation doing exactly that. He has implied he will find cuts elsewhere.
Kaine’s other cuts will come from roads, closing mental health facilities, furloughs, education money, etc. Former Governor Gilmore, the father of the car tax repeal, says that the entire car tax should be repealed rather than reinstated. When he was governor, he was unable to do away with the entire tax. We currently pay about 30% of the total bill.
According to the Washington Post:
Kaine is considering other options, too. He has said he will propose deep spending cuts. He could also raise revenue by phasing out the dealer discount, which allows retailers to retain a small portion of the sales taxes they collect.
But after reducing budgets by $7 billion in recent years, Kaine has made clear that tax increase proposals are not off-limits. On Friday, he exchanged icy letters with leading conservatives who urged him to write a budget without them.
“While I appreciate your thoughts regarding the burdens faced by our citizens and businesses in the worst economic crisis since the Great Depression, your letter conveys a failure to grasp the stark realities of the coming budget,” Kaine wrote to the group of four legislators and Lt. Gov. Bill Bolling (R). “We are far beyond the stage of eliminating inefficiencies or making merely difficult cuts.”
With shortfalls spiraling so much that Kaine will probably order further layoffs and might cut education funding, car tax relief makes an inviting target.
Car owners pay the tax, which is based on the value of their vehicle, to local governments. Gov. James S. Gilmore III was elected in 1997 with a pledge to do away with the levy. At the time, Gilmore promised localities that they would not lose in the bargain. Instead, he proposed that the state reimburse local governments each year for the costs of cutting the tax.
How is Virginia going to function with so many cut backs? By law, it must have a balanced budget. Will Governor McDonnell use Governor Kaine’s budget blueprint? Will he have a choice? It is all well and good to say no more taxes, or no tax increase until we need to function as a state. I don’t see how some of these services and state functions can be cut back more.
The “No Car Tax” concept was a ploy by Gilmore to win an election –
and it worked.
– The tax is and always was a local tax, not a state tax, and the
most important one, after real estate, for local jurisdictions. It
would have been more logical to cut, for example, the state income tax,
but that wouldn’t have fit as well on bumper stickers.
– Folks in local government knew the promise to “keep them whole”
through state funding was a fragile concept that would fray in the face
of a fiscal storm. Once again, the GA will throw the locals
overboard, to save themselves.
Do you think McDonnell will do that to the locals?
BTW, PR, you sound just like Mr. Howler. I looked to see where he was when I read your comment.
My father hated the car tax, not because he begrudged the State revenue, but because it was a stupid, redundant tax. He really hated having to put that damned sticker on his car each year.
Democrats and Republicans need to awaken to the reality that you can’t ship our manufacturing base off to Communist China, then expect the tax base to support an ever growing government, as well as what seems to be an endless stream of unfunded federal mandates.
We can work together to restructure our government, so that it costs less. Unlike Tim Kaine, we must not treat education or so-called “public safety” as sacred cows. All agencies MUST be subjected to targeted cuts and restructuring. We can redefine the role of agencies to be focused on helping the citizens, rather than, like cops hiding in bushes with radar guns, PREYING on our citizens. Yet, only so much can be done with targeted cuts and restructuring the roles of agencies.
Democrats and Republicans MUST work together to rebuild our manufacturing base. Only with the creation of real, value-added, employment that is based on the real creation of goods and services, shall Virginia and our nation emerge from this current DEPRESSION.
So, cut government, but take proactive action, through tax incentives, tort reform, regulatory relaxations and zoning, along with grants to promote manufacturing based entrepreneurship.
Democrats and Republicans can work together for our common good.
Budget formula, Y=X.
“Y ” being what people expect government to do. A lot.
“X” being what people want to pay for goverment. Not much.
Sharpen your pencils, FY2010-11 is going to take more than a few
all nighters.
Would the people upset about getting a ticket by “cops hiding the bushes with
radar guns, preying on our citizens” please meet in conference Room A with
the “why don’t you do something about speeding, somebody is going to
get killed on my street” folks and duke it out until they have a winner.
Excellent point, Poor Richard.
I am interested in how each of those groups would classify themselves politically.
FYI -Snow emergency in Manassas starting at midnight. Vehicles parked
on Snow Emergency Routes will be towed after that time. Imagine
that PWC and MP will soon follow.
I don’t mind paying taxes for a civil society. I do object paying taxes to a Government that has grown bloated with waste and engaged in unnecessary tasks and missions (as in things that the Federal or State Constitution does not specifically enumerate). Those things that were created simply to make constituents happy would be the first thing I would cut. Slim down Government and I will be happy to pay for whatever is left.
Opinion, many are for smaller and less expensive government in the abstract,
but will take your head off when you even mention cutting funds for one of
their pet projects.
How about snow removal? I think it is the job of my local govt to remove snow off the roads around my house. However, the main drag gets scraped clean until it has potholes. 10-30 times while the side streets barely get touched. They are narrow and have cars on them. Someone needs to be checking up on the snow bunnies who are out plowing us in or scraping the pavement off the road.
They love wide roads with median strips. They hate having to weave around cars. So, the more narrow streets simply don’t get cleaned off.
PR makes an excellent point. What is the mark of a civilized society to one is waste to another. We each have our pet projects and pet peeves.
Defense appropiations bill that went through congress this week included
millions for items the Defense Dept. says it didn’t request, didn’t want and
doesn’t need. Earmarks are thrown in by Senators and Congressmen
to protect and support special interest, most often in their home state –
corporate welfare via the defense budget.
Good old Congressman Ed, he sure kept our buggy whip factory humming!
Now, what are those jerks in Washington going to do about waste?
Yep, somebody needs to do something! Go get them, Ed.
The Kaine proposal is in. He is recommending totally doing away with the car tax and replacing it with a 1% increase in income tax to be phased in over 2 years. That is as far as I got. Have at it:
http://www2.insidenova.com/isn/news/politics/article/kaine_end_car_tax_raise_va._income_tax_1_pct/48967/
If we have to raise taxes to remain a civilized society, is it better to go with sales tax or with income tax? Which is better for the individual?
PR, I certainly understand your point; however, the thinking you propose is perhaps one of the reasons our Government is “broke” (both literally and figuratively). Perhaps this is a chance to tighten things up a bit (that “broke” thing).
Moon-
You may think it’s the job of your local govt to remove snow, but it’s actually the job of your state govt (VDOT). Let’s hope they get it right this weekend!
Opinion, you mean cuts like these for example”
Dear Delegate(s) ____________________:
I will detail several areas which may afford short term and long range budget efficiencies for the Commonwealth. Please note that these are merely exemplary of the types of program and policy inefficiences that characterize many of the Commonwealth’s agencies.
VDOT
1. VDOT through its DRPT division supports Rural Transit operations through a grant program that provides an approximately 20% match of Federal 5311 grant funds (approximately $28,000 per transit vehicle). Many of the transit systems funded through such grant programs (Town of Orange, Town of Blackstone, Town of Bluefield, etc.) have historically provided transportation for fewer than 40 riders per day. Moreover, those transit systems recover little or none of their operational expenses through fares or advertising revenue, instead relying almost entirely on Federal, State and Local funds to subsidize the underperfoming systems. Please note that my comments are restricted to those “Trolley” systems purported to provide a general public transit service and not those systems such as RADAR in Southwest Virginia that exclusively provide on-call transportation for those who require transport to rural health facilities. Currently, VDOT supports several such systems and an unknown number of vehicles. Provisions of the Master Agreement for Use of Commonwealth Transportation Funds that each locality is required to execute provide that “funding is subject to annual appropriation by the General Assembly” (Article 2, Section 2.2) and that “upon 30 calendar days notice to the Granteee, the Department may terminate, in whole or in part, the funding” if “the Department fails to secure the necessary budgetary appropriation to fulfill its obligations under” the agreement or if “statutory changes affecting the program under which these funds were provided render funding this Agreement impossible” (Article 13, Section 13.4). Savings could also be realized through a reduction of DRPT’s staff, particularly its “salesmen” that tour the Commonwealth pitching the program to every small town and jurisdiction that will listen. I would note that in their presentations, DRPT representatives specifically encourage jurisdictions to operate any program initiated through a private entity, VRT. Interestingly when asked about failed systems, that same representative places the onus on “incompetent” operators who as it turns out were VRT.
Similarly, VDOT through its grant programs supports larger transit operations that recover less than 20% of their operational costs (Williamsburg Area Transport, Fredericksburg Regional Transit, Williamsburg Area Transport, Fairfax Connector Bus System, Greater Lynchburg Transit Company, Charlottesville Transit Service, Petersburg Area Transit, City of Danville Mass Transit System, Transportation District Commission of Hampton Roads, City of Alexandria – Alexandria Transit Company). Given the bleak economic forecast resulting in dramatic reductions in VDOT’s budgets, I would suggest a review of VDOT’s priorities/transit grant programs and the reprogramming of fees expended through matching grants for underperforming transit programs to VDOT’s core missions. Surely the maintenance of the Commonwealth’s road system has a higher priority than those underperforming systems and the reprogramming of funds would provide a greater benefit to a greater portion of the public in terms of transportation and public safety.
2. VDOT also provides grant support to many other programs that do not provide actual surface transportation improvements or maintenance. The FY 2010-2011 Project Application Form for grant funds from the Commonwealth’s Transportation Enhancement Program allows for the funding of such things as Historic Preservation and beautification. Again, in these times of fical austerity, VDOT should focus on its core mission and forego funding of niceties over necessities.
VRE
VRE is expending millions in Federal and Commonwealth dollars for engineering and environmental studies of that segement of their proposed extension from Gainesville to Haymarket. Their own Tier II analysis (also funded with Federal and Commonwealth dollars) reccomended that the extension only extend to Gainesville for a variety of fiscal, economic impact, environmental and infrastructure reasons. Although VRE previously committed to abiding by the results of that Tier II analysis, they have nonetheless disregarded the findings and are unnecessarily expending millions for studies that will undoubtedly underscore the earlier, undisputed, findings. I would suggest a reduction and reprogramming of the Commonwealth’s share of that funding as well as an explanation from VRE as to reasons for disregarding the results of their own analysis.
Department of Charitable Gaming
There is currently a requirement that any charitable organization raising $40,000 or more file quarterly and annual reports, pay application fees and a percentage of their proceeds. The department has created reporting and documentation requirements that seemingly only serve to justify their existence. Many charitable organization from youth groups to volunteer fire organizations have found the requiments and expenses so onerous and burdensome that have ceased fundraising efforts that may require reporting to the agency. Moreover, employees of the agency often assume a hostile if not threatening posture that seems to presume those charitable organizations are criminal in nature. Given that the fees and percentages recovered by the Department do not recover the expense of agency I would suggest raising the reporting threshold from $40,000 to $100,000 (Note that an organization reporting the minimum would only generate $650.00 in revenue to the Commonwealth). Raising the filing threshold would enable those charitable organizations deterred by the requirements to more effectively engage in fundraising and thus provide needed services to their communities, services which are currently the subject of reductions in state and local funding. Additionally, raising the threshold would virtually eliminate all reporting and allow the Department of Agriculture the opportunity for a reduction in force at the Department of Charitable Gaming, saving the Commonwealth additional long-term funds.
Food, you are totally right. I stand corrected. Yes, the V in VDOT does stand for Virginia.
Food for thought, In Virginia cities (like Manassas and MP) have primary
responsibility for clearing roads and are allocated “lane mileage” dollars
by the Commonwealth. Counties, though, have snow removal by VDOT.
My thoughts and prayers are with Mr. McDonnell and his team as they try to weather this economic storm. Unlike those on the far right, who declared Barack Obama the scapegoat for the Bush Economic Crisis at this time last year (note: this was a month before Obama took office and thus, in the rational world, a tad premature), I am not looking to score political points by blaming current leadership for what past leadership has done.
It’s not easy to turn campaign rhetoric into strong fiscal policy. I wish our new Governor Godspeed.
@Mom
I like the term “…budget efficiencies…” in your article.
Speaking of whose ox is getting gored, PWCPD found out they were losing $1.8 million in state funding for FY11. They lost $900k for FY10. Thats a total of $2.7 Million for 2 years. Most of the funding lost is for non-salary items. You know, guns, technology, radar, tasers, bullets….that sort of stuff.
I wonder if the chairman will call this loss ‘a drop in the bucket?’
@Moon-howler
What’s the problem… let’s just ask people to be nicer to one another.
I bet any fool could spot 100 things government shouldn’t be doing (yes, even state government) and trim them right off. THAT’S what a conservative is supposed to do. Taxes should not increase one dime. Just stop doing what you’re not supposed to be doing….simple.
Snow removal is expensive, especially large amounts over a long time
with heavy wind (which means plows have to keep going over the main
roads and aren’t able to move into the residential areas). Overtime,
fuel, salt and other chemicals, etc. Another kick in the side of local
budgets, but it has to be done.
One happy group are the on call contractors – they get to clean up in
more ways than one.
@Moon-howler
I’m biting my tongue not to take advantage of that “any fool” and “what a conservative is” straight line (since, in fact, I agree with your basic premise but perhaps not your implied characterization of conservatives.)
@Slowpoke Rodriguez
What I said in my last post… only directed at Slowpoke (fat finger error… or following Slow’s logic, a conservative error).
That’s ok, you can blame me.
Is anyone horrified over the hit PWC just took today? I guess we should have been nicer to Tim Kaine. $2.7 million freaking dollars. Maybe we can get some of those Civil War dudes to make some bullets for our cops. We could also issue them sabers. Or go with Opinion’s idea, just tell everyone to be nicer to each other.
Now lets see, we had a near miss with a campus massacre, we have a serial rapist on the loose, and a 38-person drug raid.
Cops…just hiding in the bushes to catch people speeding. Maybe they can send up smoke signals since they wont be able to replace radar.
Does this mean no dash board cameras?
Slowpoke, that just sounds like rhetoric. Why box yourself in like that.
PR, I hope the city snow bunnies do a better job than county in the neighborhoods. They overkill certain streets and leave others unplowed. It is the water flowing down hill theory.
OOOOoooops….it looks like some of that $1.8 million might have to do some people slashing. Some of the loss will have to be applied against salaries.
This means fewer cops on the street. We have good cops but I doubt many of them want to work for free. I sure wouldn’t.
Also, we had better hope we don’t have any major crime events like Lexy Glover, NVCC, etc where lots of cops are on duty for long periods of time, drawing overtime. No presidential campaigns coming up either. We got hit twice on that one.
It doesn’t sound like there will be enough cops left to use the radar, shoot the bullets, or chase down ‘illegals.’
Virginia to cut General Assembly expenses
Now, these are the kind of cuts I like… not so big, but personal to those who govern us.
http://voices.washingtonpost.com/virginiapolitics/2009/12/general_assembly_legislates_on.html
In these troubled times (particularly considering the cut to cops, above), why do we give our Supervisors personal Discretionary funds (beyond what they need to run an office)? Many of the disbursements I see every other week look like charitable contributions… that perhaps should come from the private sector! Those funds could buy a few bullets. It’s an obvious opportunity for our Supervisors to “step up” and “chip in”.
You know, canceling the County (and perhaps State) Sesquicentennial Celebration completely and just letting the Veteran Groups conduct tasteful memorials would pay for a lot of cops and bullets.
It certainly would, Opinion. The cuts are just painful. I am glad the GA will have to suffer a little also. We also have to remember that this is Timmy’s proposal and he is making it with the notion of increasing state income tax by 1%. Think of the cuts if that doesn’t happen. What will be left?
Pisses me off knowing Stewart and Stirrup took our eyes off the prize with the anti-immigrant idiocy 2 years ago. Crime is going up while our police budget is getting slashed. That’s not why we hire you boys.
Justin, you bring up an interesting point about the crime. It does seem that we are getting more serious, more inner city type crimes since that all happened. Oddly enough, those kinds of crime stories don’t seem to have hispanic surnames mentioned.
Crime is crime regardless of who dunnit. Our police should never have been tasked with anything other than keeping people safe from harm. Now we see the consequences of taking our eyes off the prime directive for very cynical, THE most cynical, political purposes, and that is racial scapegoating. Despicable.
It won’t be a battle we will have to fight now because there isn’t enough money to do so. I can’t see the chairman having the chutzpah to say a mere million or so is a drop in the bucket.
Anyone on this blog watch BBC? the show “Keeping up appearances”? It’s a show about a nice but not very rich British family that “puts on airs” of perhaps being more than they are.
I sometimes think Prince William County as a place “putting on airs”. Perhaps this current budget crisis will be a good excuse to return to our rural roots and a simpler life. The reason we need revenue is because we significantly increased services to citizens. Have you all seen the beautiful expansion to the McCoart Complex? Have you been inside the Development Services Building? I understand there are a lot of vacant rooms now because of cutbacks (perhaps Supervisors who rent office space could move into a few of them to cut costs). Let’s start scaling back, live within our means, and realize we are more like Spotsylvania County and perhaps Fauquier than Fairfax and Loudoun.
Simply put, we don’t have a revenue problem because we don’t collect enough taxes, we have a revenue problem because we spend too much money. How much do we plan to spend on the Sesquicentennial again?
More than we can afford…apparently.
Opinion, since I have lived in Prince William (since dirt was forming on the earth and God was a child) PW has always seen Fairfax as competition. No it isn’t. It is the biggest baddest kid on the block. There is no competition. We need to define who we are rather than always be thinking we have to keep up with the Fairfaxes.
That was a long way of saying, I agree.
@Moon-howler
You know, anyone with the ability to answer a complex question with such eloquence mixed with ambiguity while neither agreeing nor disagreeing should run for Supervisor. It’s a gift (which a couple of our Supervisors have)!
I wouldn’t have that job for Dr. Walts’ rather substantial salary.