first bank  

We’re supposed to vote for this guy?

Fear and Loathing on the Trail column by Chris Graham

A generous guy, that Jim Gilmore is.

I got my hands on a piece of literature from the Gilmore Senate campaign that the local GOP was distributing last night at the Augusta County Fair. Quite rich, this thing was. It went into great detail about how much money households in Augusta, Staunton and Waynesboro saved in fiscal-year 2007 because of the car-tax relief plan initated by Gilmore during his term as governor from 1998-2002.

According to the literature, entitled “Car Tax Facts,” the average resident of the Greater Augusta area saved $262.57 in 2007 due to the relief plan, which used one of the more roundabout approaches to providing tax relief that we could devise.

It’s been awhile since we’ve had to discuss the details, so here’s a quick refresher. Gilmore couldn’t really do away with the car tax as his campaign placards had promised in 1997, because the car tax is not a state tax, but rather a local tax. He could’ve gone the route, one can suppose, of having the tax abolished through constitutional amendment, but the amendment process can prove quite wieldy, and in any case would have taken the entirety of Gilmore’s single four-year term to provide any tax relief. So the plan was not to actual tax relief, but to have the state reimburse localities for what was supposed to be a phased-out car tax. You got to write a smaller check to the local treasurer, your local government got its money back from the state, and everybody was in happily-ever-after land from there on.

The flaws in this should be obvious. First, the state has done what states will do, namely, it has shifted the burden of paying for the car tax effectively on somebody else, in this case the localities that rely on personal-property taxes, or car taxes, if you want to use the vernacular, as a primary source of local revenues. That ends up costing you in the form of tax increases at the local level; after all, somebody has to pick up the trash and pay the police officers to keep the streets safe and the rest.

Second, and really, to me, this is the big one, the fundamental flaw in this scheme – and I will pose this in the form of a question, because I had some law school, and enjoy being Socratic when I can. Where does the state get the money to pay localities for the reimbursement?

Yep, you guessed it, from us. We’re the state government, and we’re the local government. So what is happening is we’re paying $950 million a year right now in state taxes to reimburse localities $950 million to give ourselves these car-tax breaks.

Except that we’re paying more here in Greater Augusta than we’re getting back. And it shouldn’t be a mystery why that would be the case. Our car-tax rates here are a lot lower than what localities in Northern Virginia, in particular, assess on their taxpayers.

So what this means is that the average Greater Augusta household is paying $350 in state taxes to get $262.57 in car-tax relief. In addition to taking on more of a burden at the local level to make up for the reduction in state revenues to the local governments here that is harder to quantify, but not hard to notice.

If I were a higher-up in the Gilmore campaign, I’d pull back from making this an issue anywhere outside of NoVa. It’s obvious that we here in the hinterlands are getting utterly screwed by Gilmore’s Car Tax Facts. And this is supposed to make it so that we elect him to the United States Senate?

augusta free press news
augusta free press news