Virginia, Eliminate Waste Before Raising Taxes
Monday, March 22, 2004
By: Tom Schatz

Commentary

Mr. Schatz is president of Citizens Against Government Waste.

Even though Virginia lawmakers are the ones who are missing the boat during this year's budget negotiations, it will be the taxpayers who drown.  When faced with a shortage of revenue, politicians usually resort to the most destructive answer for taxpayers and the economy: raising taxes.  If politicians truly cared about the best interests of Virginians, they would find innovative ways to solve the budget deficit -- rooting out and eliminating wasteful spending.

All three major plans to supposedly help eradicate the $1 billion deficit in Virginia's two-year $59 billion budget: the House Republican plan, Senate Finance Committee Chairman John Chichester's (R-Stafford) plan, and the Governor's plan, eliminate tax loopholes.  Sen. Chichester and the governor propose tax increases, including excise taxes.

None of the plans makes a serious effort to reduce wasteful spending.  Even House members, who have been most willing to hold the line on tax increases, have advocated an additional $8.1 billion in pork-barrel spending.  Requested projects include $2.4 million for the promotion of Virginia wine, $2 million for the Great Dismal Swamp Interpretive Center, and $117,500 to digitalize President Woodrow Wilson's historical papers.

There is other existing waste to be found in Virginia.  Each year, approximately $300,000 is appropriated to the Virginia Association of Counties, allowing a select few of Virginia's local government officials and employees to dine on gourmet food, play golf, and enjoy the spas at one of Virginia's outstanding resort destinations.  The group's 2003 annual conference was held at the Homestead Resort in southwest Virginia, a destination that that the overwhelming majority of Virginians wish they could afford for just one night.

Unfortunately for taxpayers, there is no serious effort being made to eliminate such wasteful spending in this year's budget.  Instead, taxes will be raised, undermining the ongoing economic recovery.

In particular, raising excise taxes on items such as gasoline, alcohol, and tobacco makes the products more expensive for everybody.  The poor can least afford the increase since they have less disposable income.  Increased excise taxes also discourage the legal purchase of those products, causing Virginians to flee to another state to purchase such goods, thereby sending money out of the state and hurting small businesses.

Most importantly, raising taxes will not solve the root problems associated with wasteful government spending.  Waste is waste, regardless of whether the state is operating in the red or the black.  Identifying and eliminating waste could solve the current budgetary problems and save taxpayers billions of dollars for years to come.

Faced with budget problems of his own in South Carolina, Gov. Mark Sanford (R) formed a commission that last fall reported $225 million in immediate savings, with further annual savings of $300 million.  This year, he proposed a budget without a tax increase.

Gov. Mark Warner (D) first needs to cut the obvious waste in Virginia's budget.  Then, he must establish a government waste commission, composed of business executives, community leaders, and volunteers who would weed out additional waste, fraud and abuse in the state's budget.  That commission's recommendations should be written into an omnibus, stand-alone legislative bill subject to up-or-down votes in the House and Senate.

Having a leaner, more efficient government will mean better services and lower taxes for Virginians.  Unfortunately, Gov. Warner and Senate leaders claim that the budget has already been cut as much as possible.  This is why objective outside leaders should review the budget.  Before, during and after such a commission conducts its business, it is imperative that the people of Virginia put pressure on their elected officials to act immediately to reduce waste, fraud, and abuse in the budget instead of raising taxes.