By Tim Craig
Washington Post Staff Writer
Sunday, November 25, 2007
RICHMOND -- Former governor James S. Gilmore III wanted to create a Web site and video last week to announce his candidacy for the Republican nomination for the U.S. Senate, but he didn't have the money.
"We did it on credit," said Dick Leggitt, a Gilmore adviser. "We went ahead and ordered the stuff. The bills came in this week, and now that we've formed a [federal] committee, we will pay for it."
Gilmore's borrowing played right into the hands of Mark R. Warner, who succeeded him as governor and is the likely Democratic nominee. "That's how he financed state government the last two years of his term," quipped Kevin Hall, Warner's communications director.
If Gilmore wins the GOP nomination and Warner is the Democratic candidate, Virginians can expect similar jabs from both sides in next year's race to replace retiring Sen. John W. Warner (R).
Most Senate races next year will probably focus on the economy and the war in Iraq, but Virginia's adds another element: Who did a better job as governor? Warner or Gilmore?
Warner, who was governor from 2002 to 2006, has said he inherited a multiyear, $6 billion deficit because of Gilmore's reckless fiscal policies, including his push to eliminate the unpopular car tax.
Despite steep budget cuts early in his term, Warner has said he had to push through a $1.4 billion tax increase in 2004, even though during his campaign he pledged not to raise taxes.
"Virginians will have an opportunity to make a clear choice between two starkly different records," Warner said in a statement the day Gilmore announced his candidacy.
In a sign that Virginia voters could be in for a grueling year-long campaign, Gilmore is fighting back. Known for his combativeness and ability to deliver a punch in the heat of a political campaign, Gilmore plans to defend his fiscal record aggressively and poke holes in Warner's assertion that he had no choice but to raise taxes.
"We are going to meet him with the facts," Gilmore said Friday.
Under Virginia's constitution, the state budget must be balanced, Gilmore noted.
"My budgets were balanced. . . . He had his own spending decisions to make," Gilmore said. "We warned him the recession was creating revenues less than expected, which meant he would have a shortfall. But that doesn't mean you close it by increasing taxes, unless you are a liberal. We are fiscal conservatives."
Warner was unavailable to comment last week. But Sen. R. Edward Houck (D-Spotsylvania) called Gilmore's assertion "laughable."
"It simply will not hold water," Houck said. "The record is too clear."
Although he is prepared to battle it out with Warner over their respective records, Gilmore said his campaign will also focus on the need to fight terrorism and crack down on illegal immigration. "This is not a gubernatorial race," Gilmore said. "This is about the national security of the country."
But there is mounting concern within GOP ranks about whether Gilmore is the best Republican to face Warner. In recent days, some GOP leaders and activists have stepped up efforts to lure another candidate into the race. Republican Dels. Christopher B. Saxman (Staunton) and Robert G. Marshall (Prince William) are considering a run, and there is talk that a candidate with a more national profile could emerge.
"I think it would be good to have someone else in the race," said Jason Gray, chairman of the 4th District Republican Committee, which covers a region from part of Hampton Roads to the central part of the state. "In my opinion, [Gilmore] can't beat Warner as it stands right now."
Gilmore countered that he is "focused on Mark Warner," not on a potential nomination challenge.
Likewise, Warner is gearing up to face Gilmore in the general election. Democratic operatives already have begun digging into Gilmore's record as governor. And Warner has hired Will Payne, who had been an adviser to Sen. Kenneth W. Stolle (R-Virginia Beach), to head up an effort to win support from Republicans disenchanted with Gilmore.
Elected governor in 1997 on a simple platform -- that he would eliminate the tax local governments impose on personal vehicles -- Gilmore pushed the cut through the General Assembly during his first year in office.
Gilmore and legislative leaders agreed to phase out the tax over five years. To make sure the state could afford it, they agreed to suspend the plan if revenue growth fell below 5 percent.
In 2001, Senate Republicans said the economy had slowed enough that they could not enact the fourth phase of the tax cut. But Gilmore, whose efforts to cut taxes made him a rising star in the national Republican Party, pushed the program forward that year despite its $1 billion cost.
"What do you want to do in a recession?" asked John W. Forbes, who had been Gilmore's secretary of finance. "Do you want to increase taxes and programs, or do you want to give money back to the people who need it?"
By the end of 2001, as the state was dealing with the aftermath of the Sept. 11 terrorist attacks, state finances had continued to worsen.
In December, Gilmore told legislators that the incoming governor, -- Warner -- would face a shortfall of about $3 billion over three years.
Warner, who took office the next month, cut state spending by eliminating hundreds of positions, consolidating some agencies and scaling back social-service funding.
But some Republicans say Warner could have done more to control spending, including embracing the findings of a 2002 commission headed by another former governor, Democrat L. Douglas Wilder, that found $1.3 billion in potential savings.
"He showed no interest in dealing with those tough spending issues where we could have eliminated some unnecessary programs," said Patrick McSweeney, a former state Republican Party chairman.
In 2004, Warner won bipartisan support for a $1.4 billion tax increase over two years that allowed him to boost spending on education, health care and public safety.
Hall said the tax increase was needed to "meet basic commitments."
Republicans counter that Virginia's economy was already on the rebound, making the tax increase unnecessary. They point to a $1 billion budget surplus at the end of 2004.
"He raises taxes by $1 billion only to have everyone find out a few months later -- whoops, we have money," Forbes said. "I don't call that fiscal conservatism or good fiscal stewardship."
Hall replied that the GOP is shortsighted and that the tax increase was designed "to look beyond a two-year budget cycle."
In 2005, Governing Magazine said Virginia was the best managed state in the nation, and Warner's popularity soared.
When he left office in 2006, Warner's approval rating stood at 80 percent, thought to be a record for a Virginia governor.
Meanwhile, Gilmore's standing has worsened as Democrats and some Republicans have stepped up attacks on his record.
In a Washington Post poll last month, 40 percent of residents had a favorable impression of Gilmore, a 20-percentage-point decline since 1997. The same poll found that Warner would beat Gilmore by 30 points in a general election.
But Gilmore is banking that Warner's popularity will erode once he has to stake out positions on federal issues. Gilmore also plans to link Warner to Democratic presidential hopeful Hillary Rodham Clinton. Republicans say the New York senator is too liberal and polarizing for Virginia voters.
"Does Virginia really want to a send a senator to Washington who is going to support Clinton?" Gilmore asked.
Hall dismissed suggestions that Clinton would drag down Warner. "Who's to say who the Democratic presidential nominee will be?" he asked. "For that matter, it is not altogether clear who the GOP senatorial nominee will be."