Embarrassed tax raisers get ugly

Just when I think it might be safe to move on to another topic, there are more ripples in the pond from Virginia’s recent record tax increases. But then perhaps this is not too surprising, because a $1.4 billion rock is bound to make a lot of ripples. The latest wrinkles come from a report from a public policy research institute, and a story from the Richmond Times Dispatch.

One of the rationales that Gov. Mark Warner and his pro-tax friends in Richmond gave for their tax increases was their purported desire to save Virginia from the fate of other states which, they insisted, were slipping rapidly into bankruptcy. This is simply not the case, according to the quarterly survey of the non-partisan Rockefeller Institute of Government, based in Albany, N.Y. During the first quarter of 2004, state revenues rose by over 8 percent. The last quarter to show such robust revenue growth was the second quarter of 2000, the last quarter of economic growth before the Clinton recession began.

Put differently, state revenues all around the country are growing at rates reminiscent of the 1990s boom times.

Even this good news is not stopping some state politicians from insisting that they need more money, and that the people must somehow get by with less. Virginians may take some scant comfort in the fact that New Yorkers were also the victims of governmental fraud. Their state revenues are rising almost as fast as Virginia’s, yet the governor and legislature just passed a large tax increase. In California, Gov. Arnold Schwarzenegger has refused to entertain tax increases, even though the budget gap was much, much larger and more threatening than Virginia’s.

Schwarzenegger did exactly what most Republicans in Virginia wished to do: he reduced the rate of spending growth and relied on low taxes to stimulate economic growth. Revenues in California rose by 11 percent during the first quarter as the state’s (and the nation’s) economy has come roaring back.

During the Virginia budget debate, political leaders of both parties called for a referendum before new taxes could be imposed. Warner, perhaps because he knew that the revenue figures would expose his tax increases as a fraud sometime before the referendum, refused. What is noteworthy is that he said at the time that he did not want Virginia to become “another California.” Given the Golden State’s robust economic comeback, Warner should have been working day and night to make this “another California.”

Here in Virginia, first quarter revenues rose by over 9 percent, and there is every indication that the second quarter revenue numbers will be almost as high. After all of Warner’s rhetoric about burden-sharing and how we are all in the same boat, how quickly will the Governor and his allies seek to give even one cent of the state’s surplus back to the people who created it?

Instead of thinking along these lines, some of Warner’s friends are seeking revenge against those who stood up for the taxpayers, especially in the Senate. According to the Richmond Times-Dispatch, Senate Rules Committee Chair Thomas Norment (R-James City) got his committee to deny the appointment of anti-tax Senators to important study commissions. Not only did Norment deny the Commonwealth the talents of some of his colleagues, but he also did so with rancor and ugliness.

One of the pro-taxpayer Senators who was punished was Steve Martin (R-Chesterfield). When Martin was removed from the Board of Veterans Service, Norment said that “Martin is a man of family values,” and this will give him more time to spend with his family. Such petty vindictiveness might be expected from the loser in a debate, but it is particularly unseemly from the victor. The only explanation for such childish behavior is embarrassment. Norment and the other tax-raisers know that the latest budget figures show them up as either complicit frauds or, at best, Chicken Littles who spent the winter and spring insisting that the fiscal sky was falling.

Besides showing disdain for his own family, Norment’s sarcasm also makes it plain that the pro-tax wing of the Senate Republican caucus, currently the dominant wing in that body, is declaring war on those who disagree with them. Such restraints as “comity,” and “Senatorial courtesy” no longer apply, according to Norment.

Fair enough. It is the privilege of the majority to make the rules, both the formal and informal ones. But the pro-tax majority in the Senate Republican caucus is not as secure as it seems. A retirement or two here, a primary victory or two there, and the anti-tax segment of the party will dominate.

And then, Norment’s sky really will be falling.