Ken Plum: A Gordian knot
Column by Ken Plum
According to an ancient Greek legend, oracles told the people of Phrygia that the next person who came into town riding in an ox cart would be their king. When a poor peasant named Gordius arrived with his wife in an ox cart, the lucky man was named king.
To show his gratitude, Gordius dedicated his ox cart to Zeus and tied the cart to a post in the acropolis with an intricate knot that became known as a Gordian Knot. Oracles declared that whoever could untie the knot would rule all of Asia. Many tried and failed.
I believe that tax policy is a Gordian Knot for Gov. McDonnell and the Republicans in the General Assembly. With revenues at their slowest growth since the Great Depression, with an increasing number of children and adults to be educated in public schools and colleges, and with a crumbling transportation infrastructure, the state’s political leadership has tied themselves in knots by refusing to address the revenue side of the budget. No reasonable person expects any proposals for a general tax increase during a recession to ever be proposed or considered. More than a fourth of the members of the House of Delegates have signed pledges of no tax increases. Gov. McDonnell pledged that he would not sign any tax bills. But there are reasonable ways to enhance revenue.
The knot tightened when the Republicans declared that any fee increases would also be considered a tax. Taken literally, that means that a person receiving a unique service from government would not need to pay a fee sufficient to cover the cost of that service. The practical result is that when a bill that passed the Senate to raise fees for permits for solid waste disposal to cover the cost of issuing the permits, a committee of the House of Delegates killed the bill because they called it a tax. As a result, Virginia taxpayers continue to subsidize the cost of out-of-state waste haulers by at least four million dollars a year. The Senate budget contained about a half-billion dollars in fee increases with two-thirds of those rejected by the House because they were considered taxes even though they were charged only to a person receiving a direct service of government.
The Gordian Knot of transportation for Gov. McDonnell is that any reputable commission he appoints to make recommendations will dismiss his campaign promises of ABC store sales and offshore oil as being what The Washington Post called “pixie dust.” Any such commission is going to point out the billions of dollars needed for any serious transportation plan. Certainly there will be a reluctance to call the solution a tax, but there will be a need for a serious revenue enhancement by whatever name. It remains to be seen if the Governor has the political courage to name a transportation commission to study the transportation problem.
In 333 B.C. Alexander the Great attempted to untie the Gordian Knot. He was unsuccessful as all others before him had been until he took out his sword and cut the knot. Alexander went on to conquer Asia. Gov. McDonnell must be bold if he is to undo the Gordian Knot of being unable to address government revenues. Failure to act may well doom his governorship.