Courtesy of Norm Leahy, who watched Governor Kaine's budget presentation a little while ago, this appears to be a clever move by Kaine. [UPDATE: Sen. Chap Petersen hates it; not a good sign for Kaine's proposal. At all.]More cuts are on the way, of course, for K-12 and higher education, for public safety, for VDOT, for health care, state employees ranks will be further culled and the survivors won't get raises until 2013 at the earliest (plus, they will have to pay a small amount toward their own pensions).In sum, Tim Kaine is proposing that Virginia completely eliminate the hated car tax, which of course would also eliminate the state's car-tax-related reimbursements to localities as well. According to Bob Lewis' AP story, the "car tax would be replaced with a $2 billion-a-year income tax increase under the new budget Gov. Timothy M. Kaine presented Friday." Of course, as Lewis writes, this would put the Kaine budget proposal "on an immediate collision course with incoming Republican Gov. Bob McDonnell, who has pledged to reject any general tax increase, and an anti-tax GOP House majority strengthened by last month's elections." Fun times on the way in Richmond, in other words! :)
But then there are the taxes and, yes, Kaine proposes to end the state reimbursement of the car tax to localities, which means you will see a much heftier bill. Maybe.
[...]
...Kaine's answer is to repeal the car tax -- entirely. But through the mechanism of allowing localities to impose a one percent income tax on residents to diversify their revenue streams.
Other than the car tax plan, Kaine is also proposing another $1.2 billion in spending cuts, including "funding for state-supported colleges, mental health services and public safety." Those are all going to be extremely painful, as tuition soars and as Virginians are less safe. It will be fascinating to see how Bob McDonnell deals with this situation, but my guess is that he won't be able to; that is, unless he shocks everyone by breaking with right-wing ideology.
UPDATE: Bob McDonnell responds, including the line, "It is bad economic policy to increase taxes on Virginians, especially as they continue to struggle with the worst economy in generations."
