No, Virginia, government isn't Santa Claus

Posted: Apr 07, 2004 12:00 AM

The state of Virginia, the home of presidents who believed in small government, low taxes and personal responsibility, may be about to join the big taxing and spending federal government with the help of the party that claims the heritage of some of the nation's Founders.

Gov. Mark Warner, a Democrat, is getting aid and comfort from 20 Republican members of the House of Delegates and others in the Virginia Senate in his effort to raise state taxes that will soak citizens for an additional $1.8 billion annually in order to cover a deficit of just $1 billion over two years. It is an undeniable truth that there are no temporary taxes, so if these increases pass and the deficit is eliminated, state spending will rise to, or exceed, the level of new taxes. Legislators will then be "forced" to contemplate even higher taxes rather than reduce spending.

Heaven forbid that the Virginia legislature should look to its own house before breaking and entering the houses of its citizens and taking more of the money they earn. Citizens Against Government Waste (CAGW) found one of many typical examples of the way governments misspend our money. It is an annual appropriation for the Virginia Association of Counties. Last year, that group dined on gourmet food, played golf and enjoyed the spas at the state's premier luxury resort, The Homestead. The little junket cost taxpayers $300,000, according to CAGW. That some Republicans are co-conspirators in this outs them as political cross-dressers.

Politicians who are serious about getting state fiscal houses in order should consult the American Legislative Exchange Council's (ALEC) publication "Crisis in State Spending," published in 2002. ALEC says there are several ways to close budget deficits. All are far superior to raising taxes.

First is cutting spending. "Private spending is on average more productive than public sector spending," says ALEC, "simply because the private sector is disciplined by market forces while the public sector is not." This will require leadership and appeals to patriotism, or some other high motive, to change the entitlement mentality and the expectations of some that they deserve to receive what others have earned. According to Steve Moore of the Club for Growth, whose members help elect candidates supporting limited government and lower taxes, Virginia increased its general fund expenditure 98 percent in the last decade. That was ninth among all states. Texas came in first, with a 283 percent spending hike during the 1990s. Alaska was last with an 8 percent reduction in spending.

ALEC's second proposal for closing budget gaps is asset sales (for example, selling surplus government property). Not only is money saved when the asset is sold, savings continue annually because the asset's disposal means government no longer subsidizes the asset.

Education spending is out of control and is unrelated to academic achievement (or there would be a huge increase in National Merit Scholars because we're spending on education at record levels). School choice is the answer, not only to education improvement but to lowering costs.

User taxes are a better way of raising revenue than income taxes, which reduce incentive and stifle investment. Low tax rates and a wide tax base not only distribute the tax burden fairly, but also free-up more capital, which produces jobs and, thus, more tax revenue for government because more workers pay more taxes. Class warfare continues to pit "the rich" against everyone else. Though the rich are the most productive and have the most money to invest and spend (creating jobs and a stronger economy), they are excessively taxed. This reduces capital for the job market and puts money in government.

Virginia should consider emulating South Carolina, where Gov. Mark Sanford created a commission last fall that identified waste. The commission saved state taxpayers $225 million. Immediately, with further annual savings estimated at $300 million, according to CAGW. This year, Sanford's budget contains no tax increases.

Those Virginia Republicans who want to raise taxes instead of first cutting waste, selling assets and in other ways reforming their government should stop calling themselves Republicans and change their name. "Democrat" would better represent how they are thinking and behaving.