Virginia's Newest Bad Tax
Virginia's political establishment wants to tax the rich northern part of the state so citizens will pay for new highways, instead of the state.
11:30 AM, Nov 4, 2002 • By MICHELLE STEFFEN
LAWMAKERS IN VIRGINIA have come up with a sly new way to raise taxes. Most of the state's political establishment is pushing citizens in northern Virginia to vote tomorrow for an increase in their sales tax (from 4.5 to 5 percent) to pay for new roads in their traffic-congested region. Northern Virginians already pay a disproportionate share of state taxes, but never mind. Now they're being asked to pay for something--road building--that the state itself has traditionally funded. The bipartisan coalition behind the tax hike includes the big names: Democratic governor Mark Warner, Republican senator John Warner, GOP House campaign chief Tom Davis, the business community, and that's just for starters (Senator George Allen is an honorable exception). The region's dominant newspaper, the Washington Post, has given the drive to raise the sales tax fawningly favorable coverage.
The referendum has prompted a classic elitist-versus-populist clash. Business leaders have funded a $2.3 million campaign promoting the tax referendum that features TV ads and mailings to the one million voters in northern Virginia. A turnout of no more than 30 percent is expected. Opponents have raised only $100,000. But the referendum has led to an unusual union of conservatives and environmentalists. The conservatives object to the tax boost, the environmentalists to building more roads.
The region's economy is booming, but roads have not kept up with the business or population growth. The major north-south artery on the East Coast, I-95, runs through northern Virginia, and it and other roads are clogged. Planners in the 1960s outlined a transportation scheme for the region with a subway system, Metro, and more highways and bridges. But while Metro was built and is thriving, the roads and bridges were not.
But the projected revenue from the sales tax increase--$5 billion over 20 years--won't go entirely to roads. In fact, how many new lanes of asphalt will be constructed is unclear. Proponents of the tax hike are talking about creating "smart highways," a euphemism for tinkering with existing roads but not building more. Also, plans call for financing mass transit projects, including $100 million for the Virginia Railway Express, which takes commuters from the suburbs into Washington D.C. Overall, supporters say, the new money will be divided with 60 percent for roads, 40 percent for mass transit. But those figures aren't, shall we say, set in concrete.
Wealthy northern Virginia bears the brunt of the tax burden but receives relatively little in state projects, especially roads. "They build beautiful wide roads around Richmond," contends James Parmelee, president of Republicans United for Tax Relief. State representative Robert Marshall, a Republican, says that for every dollar sent to Richmond, the state capital, northern Virginians see less than 50 percent of that in programs and funding. "We carry the weight of the state here," he says.
Parmalee insists the tax boost is both a "bait and switch scam" and a Robin Hood scheme that would "rob from the rich and give to the poor." He argues taxpayers would see only "some minor improvements on a few roads." And other areas of the state will benefit more than northern Virginia. They'll continue to get state money to pay for roads, while northern Virginians have to raise their own.
The tax referendum has hardly reached the status of Proposition 13, the property tax rollback that was passed overwhelmingly by referendum in California in 1978 and touched off a national tax revolt. The leader of that effort, Howard Jarvis, once said that with the state's political leaders, bankers, developers, and other establishment figures united against Prop 13, he knew "there was no way possible he could be wrong." Opponents of the tax increase in northern Virginia feel the same way.
Prior to tomorrow's vote, there have been two tests of the strength of the referendum. In a state delegate's race last summer in Fairfax County, Republican Ken Cuccinelli made opposition to raising the sales tax the centerpiece of his campaign. He won. More recently, a poll of voters in the two inner suburbs of Arlington and Alexandria found 2-to-1 backing for the tax increase.
Michelle Steffen is a former intern for the Weekly Standard.