Tuesday night, in the Democrat response to President Bush’s State of the Union, we heard Gov. Tim Kaine talk about the great bipartisan collaboration in his state of Virginia. We were told that collaboration has served the people by focusing on delivering services, making record investments, and producing real results.
Those are the new code words for what is really going on in Virginia, where historic runaway government spending is being fueled by record tax increases. We are going to hear a lot in the next two years about this great Virginia bipartisan “miracle,” with former Gov. Mark Warner now running for president and, failing that, very possibly joining a ticket in the vice-presidential slot.
With this in mind, the truth about Virginia and the performance and character of former Gov. Warner need to be put on the record now.
I have observed the Virginia situation first hand, battling against the state’s spending-and-tax tsunami as the former head of the state’s Club for Growth chapter. When Mark Warner ran for governor in 2001, he insisted he would never even consider raising taxes. He famously said, “The old style of politics, of saying anything to get elected, is not what we need. Instead, as a businessman, I will clean up the budget mess in Richmond, restore accountability, and — no matter how many times my opponent may say otherwise — I will not raise your taxes.”
Indeed, Warner bitterly attacked his Republican opponent in ad after ad, claiming his opponent was a scurrilous politician for bringing up the completely phony claim that Warner would raise taxes if elected. Yet in 2004 Warner proposed the largest tax increase in the history of Virginia — $1.1 billion over just the first two years of implementation.
Virginia’s Republican house opposed any tax increase. But about a dozen overcooked senate Republicans, including the aging senate Republican leadership, insisted they would not pass any budget (effectively shutting down the state) unless an even bigger tax increase was passed.
Let’s review the story of state senate finance committee chairman John Chichester. Chichester had faced a serious primary challenge in 2003, in which he urged voters to “Join his campaign for lower taxes.” His literature also alleged that he was a “Leader in the fight for lower taxes.” In a campaign letter, Chichester said, “you can always count on me to support our shared Republican principles of smaller government [and] lower taxes.” He told the Richmond Times Dispatch in May 2003, “I’m certainly not going to favor raising taxes.”
When Chichester’s primary opponent Mike Rothfeld charged that Chichester was plotting a massive tax increase with Warner, Chichester said Rothfeld was “hallucinating.”
And what happened? Just a few months after winning that primary, Chichester lead 12 senate Republicans, who had similarly campaigned for lower taxes, to counter Warner’s proposal with a $3.9 billion tax increase over the first two years. The state house, fearing the media would pin the blame for any government shutdown on them, eventually went along with a $1.4 billion increase.
Why the hysteria to raise taxes? Warner and Chichester ran around the state claiming that because of the ill-considered car tax cut under former Republican governor Jim Gilmore, the state faced a massive budget deficit. Warner said he had already cut state spending by $6 billion, or 20 percent of the budget. As a result, there was no alternative but to raise taxes.
All of which was a complete fairy tale. The state ended the 2004 fiscal year with a surplus of over $400 million, before the tax increase took effect. That surplus eventually grew to $2 billion, proving that talk of a looming budget deficit was completely false.
Nor were there any spending cuts. The state budgeted $18.2 billion in spending for 1998. By 2004, the budget provided for $26 billion in spending, the highest in the history of Virginia up until then. In his last budget submitted in December 2005, just before leaving office, Warner proposed spending about $36 billion a year.
Virginia, in fact, had enough projected revenues in 2004 to increase the next two-year state budget by 11 percent over the previous budget. But that wasn’t enough for Warner and a few senate Republicans. They wanted the tax increase so they could increase state spending by 19 percent in the new budget.
That was what the tax-increase fight was all about — increasing taxes so spending could be increased even faster and to record levels. The only Virginia miracle was that Warner could get a badly confused Republican legislature to go along with that foolishness.
If Warner or any other Democrat is elected president in 2008, they will bring this big-government road show to Washington — which is, indeed, effectively what they are now telling us they plan to do. They will increase federal taxes right after the election, just as Bill Clinton did in 1993. And they will use that money to increase federal spending even faster.
–Peter Ferrara is a senior fellow with the Free Enterprise Fund and director of entitlement and budget policy reforms at the Institute for Policy Innovation.