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I have been keeping up with the recent Chichester blitz that has been going on in the Virginia press, most notably with the Free Lance-Star. After Chichester announced that the budget crisis was the fault of anti-tax Republicans and not the 50% increase in state expenditures over the past five year, the FLS printed an article that was a well-spoken (it was an adapted text) argument in favor of Chichester’s position. In today’s FLS, the editorial page took anti-taxers to task again:
Partly because of Virginia’s “pay as you go” tradition–a tradition, ironically, that the Republican Party, once known for its hard-headed business acumen, is sacrificing to anti-tax dogma–the commonwealth has enjoyed top marks from all three ratings agencies (Fitch Investors Service is the third) for decades. This is a proud achievement. At the moment, only six other states can boast across-the-board AAA ratings–Delaware, Georgia, Maryland, Missouri, South Carolina, and Utah. However, Moody’s latest report on Virginia carries the ominous footnote “negative outlook.”
Stafford County’s Mr. Chichester, the Senate Finance Committee chairman, argues that Virginia lawmakers and the governor must keep the state on sound financial footing by identifying abiding priorities and funding them adequately (see yesterday’s Viewpoints section). This does not necessarily mean putting government on steroids–some programs can be shrunk or even axed–but it does require honestly matching expenses to income and avoiding the kind of gimmicks employed by former Gov. Jim Gilmore when state finances began to sour. The ratings firms aren’t moralists or political philosophers; they merely want to see an ethic of budgetary integrity.
Again, a very passive and well-framed argument against the anti-tax conservatives.
But here is the problem, and it is indeed a philosophical issue rather than a policy one. For every tax increase, it is in every way shape and form a tax cut for working families who are impacted the hardest. Tax reform is desperately needed, we all agree. But we can’t fix an antiquated tax code with antiquated solutions. Taxing services is not the answer, nor will raising taxes to pay for – not adequate facilities as this is all taxpayers seem willing to afford – but for top-of-the-line facilites that are second to none.
Problem here is that it is a bottomless pit. Talk to any IT manager and technology is outdated in five years at best. Schools are much in the same light, as most schools begin to show stress at about 25 years. Any demands for a first-rate educational system will mean a first-rate tax hike on working families. There is simply no way around it.
How do we fix it? For starters, we do need to give the private sector the attention it deserves, namely by contracting out road improvements away from VDOT and abolishing the property tax as the primary method of tax revenue for localities. Secondly, solutions for the cost of education must be found at the local level, for while the Virginia Department of Education can provide basic designs for new schools, localities should be given the latitude to allow room for charter schools and vouchers for private and parochial education. Thirdly, the SOLs need to be dramatically overhauled into a proficiency test that is “sprung” on students rather than a benchmark that comes with the do-or-die connotation. While that may seem to have little to do with the cost-effectiveness of our schools, the results allow for a freer development of our students rather than a rigid adaptation to a standardized test. In the end, creativity in the schools replaces the high cost of bright and shiny computer technology – as it should be.
Any sort of tax reform that comes from Richmond has to be done in conjunction with a change in the way localities tax. If Virginia is to remain the “Silicon Dominion”, a tax on services will only drive IT companies such as AOL away. There is a right way and a wrong way to go about tax reform, but turning to the taxpayers and finding creative new ways to milk the family budget is definitely not a service to hardworking families.