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Sen. Houck: Bring back the car taxDate published: 11/23/2002
DANVILLE--Virginia is facing a $2 billion hole in the current two-year budget. Cutting the car tax by 70 percent will cost nearly half that-- $900 million--in the next two years. To Sen. Edd Houck, D-Spotsylvania, the cost of cutting the car tax suggests a fairly simple solution to part of the problem: Reinstate part or all of the car tax. "We really cannot afford to go forward with the car tax at 70 percent," Houck said here yesterday after a Senate Finance Committee budget retreat. Senators knew that the cost of phasing out the car tax--the state currently pays 70 percent of the tax, and vehicle owners pay the other 30 percent--would be about $128 million more than expected. Houck says he can't justify spending that much money for tax relief while the state is looking at deep cuts to services. "That money is not there, and it's competing with other core services," Houck said. Former Gov. Jim Gilmore was elected in 1997 on a promise to repeal the unpopular car tax. The General Assembly passed a law phasing out the tax over several years, but the law included a caveat: Certain revenue growth levels had to be met for the phase-out to move forward. During the 2001 session, a Senate majority was convinced that revenue growth requirement hadn't been met, and that the tax phase-out should be frozen at its then-level of 47.5 percent. Gilmore and the House of Delegates, however, disagreed, and the phase-out moved forward to 70 percent, where it was frozen last year because the state's revenues had bottomed out. Houck thinks the tax should either be rolled back to 47.5 percent, or reinstated altogether, with the money used to help balance the budget. He plans to introduce either a bill or budget amendments to that effect. Tax relief "needs to be brought in line with other budget reductions," Houck said. "Education, public safety, mental health, should not suffer further." Houck said he thinks scaling back the car tax cut would have a minimal impact on individuals. He uses himself as an example: He has calculated that rolling it back to 47.5 percent would cost him an additional 10 cents a day in tax on his 1995 Mercury.
Date published: 11/23/2002
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