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Battleground Moves From Garage to the House

By Michael D. Shear
Washington Post Staff Writer
Thursday, March 31, 2005; Page VA04

Until this month, May 8, 1997, was arguably the most important day in recent Virginia politics.

That was the day when Republican gubernatorial candidate James S. Gilmore III promised to eliminate most of the hated car tax within five years. At a barbecue in Fairfax County, he insisted that "we can pay this dividend to the families and we can make this wise investment in our children's economic future."

Years later, long after Gilmore was elected to a four-year term on the popularity of a single campaign pledge, state politics are still consumed by efforts to fulfill that promise and the fiscal consequences of doing so.

Two General Assembly sessions have failed to reach budget deals, as lawmakers struggled to balance budgets while paying nearly $1 billion a year in car tax relief. Gov. Mark R. Warner (D) was elected after campaigning to fix Virginia's finances. The Virginia Republican Party was torn asunder as the state Senate and the House of Delegates grappled with different visions of how the car tax promise affects the state's other commitments.

These three words in Gilmore's 1997 campaign, "No car tax," set the stage for just about everything that followed.

Until now.

This month, the two leading candidates for governor, former attorney general Jerry W. Kilgore (R) and Lt. Gov. Timothy M. Kaine (D), unveiled different versions of what might become the next gargantuan promise to Virginia's voters -- cutting homeowners' real estate taxes.

Kilgore wants to cap the increases on home assessments at 5 percent per year, forcing local governments to raise tax rates or contend with a 5 percent increase in revenue. Kaine wants to make the first 20 percent of every house tax free, if local officials deem it necessary. He assumes they will.

It doesn't matter that the Kilgore and Kaine plans differ in approach and detail. The fact is, the candidates have made the promise. Whoever is elected, voters will expect follow-through.

By November 1997, voters entered the polling booths convinced that they were voting to end the car tax. When they vote this year, they will be even more certain they are casting ballots to cut their real estate taxes.

And then the fun will begin.

Neither Kilgore nor Kaine can snap his fingers and make the tax relief happen, any more than Gilmore could make good on the car tax cut without reaching a compromise with the General Assembly. Both candidates' plans require passage of a constitutional amendment, a three-year process that involves legislative action and a vote by the people.

No matter what happens this year, it seems certain the main agenda during the 2006 General Assembly session will be passing a homeowner tax bill.

But the legislative process in Richmond is never simple. Whoever wins, his plan will be subjected to intense scrutiny by powerful interest groups, local officials and lawmakers eager to score points with voters.

Take Kaine's plan, for instance. As described by him, it would lower the tax burden on homeowners while leaving assessments on businesses alone. Business groups have already begun plotting how to get a piece of that action. As one business lobbyist said, "The price of admission will be giving the exemption to everyone. What's fair is fair."

That could doom the plan, of course, or simply make it wildly unaffordable. (Hmmm, where have we heard that before?)

Kilgore's plan could run into similar trouble. He wants to force local governments to raise the tax rate if they want more money. But raising the tax rate would also affect businesses. And, unlike Kaine's plan, which would give local governments an option, Kilgore's would be mandatory -- practically a code word in Virginia that has come to mean "costly to local governments."

Of course, lawmakers could change either plan. Senators concerned about the state's fiscal future could amend Kilgore's plan to make it voluntary. Or delegates who want to one-up Kaine could make his plan mandatory. But it is hard to see how the legislature could ignore the issue.

No, it's a dead certainty that lawmakers will pass a homeowner tax relief bill in 2006.

And it's just as certain that Virginians will be feeling the effects of their actions for years.


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