Tax Me: Is Virginia’s Anti-Tax Pledge Era Over?

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    by Paul Goldman

    Are we witnessing the end of an era? Is the anti-tax pledge, thought by many to be a prerequisite to becoming Virginia’s governor, relegated to folklore?

    Mark Warner, Tim Kaine and Bob McDonnell all made explicit promises not to raise taxes if elected governor. They made sure the voters got it. Once in office, Warner and McDonnell did in fact raise significant new taxes. Kaine tried but failed to raise taxes when the VA Supreme Court overruled the 2007 transportation tax deal. Technically, this tax deal delegated the power to increasing taxes to an unelected regional body, so it wasn’t legally the Governor/General Assembly doing it. This is why the Supreme Court shot it down as unconstitutional. Moreover, these were regional, not state taxes. But it is also fair to say that Kaine would have signed a statewide sales tax increase if the General Assembly would have sent him such a bill. This is hardly a revelation. The public got it once he took the oath of office.

    Thus, the 200-proof political question: Is the “Read My Lips, No New Taxes” era over in Virginia gubernatorial politics? Warner and Kaine are now U.S. Senators, while Bob McDonnell has a solid political image in the Commonwealth. Meaning: As best one can tell from the objective evidence, their decision to break explicit “No Tax” pledges have not hurt them with voters; Indeed, their decision to break the pledge in order to deal with an important issues – budget and transportation – may actually have helped each of them, some more than others of course.

    Now comes 2013. Presumptive Democratic gubernatorial nominee Terry McAuliffe has taken the Warner/Kaine/McDonnell experience to its logical next step, becoming the first gubernatorial candidate in history to publicly endorse, indeed push, a tax increase during an election year. Further point: prior to 1985, explicit No Tax pledges at the gubernatorial level were considered fiscally irresponsible by every single winning gubernatorial candidate in Virginia history. Indeed conservative business and political leaders in both parties were against such pledges and openly so.

     

    But in 1981, then Republican candidate Marshall Coleman, looking for a way to “get to the right” of Democratic candidate Chuck Robb, took the “No Tax” pledge. Robb called it fiscally irresponsible on the advice of those who knew a thing or two about how to get elected governor.  Did it play a big role in the campaign? My gut  answer is NO. No one in Virginia had reason to believe Robb would be a big tax-and-spend guy. Indeed, no such person has ever been elected with that image, then or now.

    Coleman faced a very tough fight to beat Robb, so the Republican had to try to find daylight where he could. Moreover, President Reagan had been recently elected a few months before, on a No Tax pledge (which he quickly preceded to break about $1 billion times).

    Then came 1985. Lt. Governor candidate Doug Wilder, the underdog Democrat, was seen as the most liberal guy ever to run for statewide office by even his own party’s liberals. He took a carefully crafted No Tax pledge aimed at the Sales Tax in particular, since there were rumors of this being raised. Wilder had a record of voting for gas tax increases, meaning he would be the only person ever running statewide as a Democratic nominee with a pro-tax record. Wilder pledged not to increase the sales tax, a levy that had been used in prior years to punish the poor, as the segregationists have acknowledged.

    By the Fall of that year, Democratic gubernatorial candidate Gerry Baliles decided to embrace a broad “No Tax Promise” as a clever campaign pledge. He knew it would cut the legs out from under his opponent, the polling very clear on that point. Baliles made the pledge: and his victory was assured. Once elected, he then proceeded to push for, and win an increase in the state sales tax, dedicating it to transportation. Wilder, having won an historic upset win, opposed him, citing his pledge.

    Four years later, Wilder had to make a gut call. He spent his years as Lt. Governor trying to redeem Democratic pledges to cut the food tax and the tax on non-prescription drugs. But due to his refusal to back the sales tax increase, his own party refused to give not merely a good policy win, but a good campaign plank as well. That’s the game: We accept it at 200-proof.

    So while Baliles got upset, Wilder pledged not to raise taxes: and said you could trust him, he wasn’t going to fool you again. This wasn’t aimed at Baliles: it was aimed at getting elected. Baliles had refused to vote for a gas tax while in the General Assembly because he didn’t want to run on a pro-tax platform.

    But all politics to guys wanting to be governor is personal: I get that too; you roll with it, keep your eye on the ball. Wilder’s second historic win was so close – the only governor’s race to require a recount – that his No Tax pledge seemed to be a reason for the victory. There is, of course, no way to ever know for sure.

    Republican George Allen picked up on it, and used it in his 1993 campaign. By 1997, GOP guv guy Jim Gilmore went everyone one further, proposing not merely “No Taxes” but in fact a huge tax cut with his “No More Car Tax” pledge. However, by 2001, everyone in Virginia who looked at the objective facts realized Gilmore’s pledge had been brilliant politics, but a disaster as fiscal policy.

    My gut: Gilmore’s disaster, which played a big role in Warner’s election (since it led to the anti-Gilmore Republicans creating a budget stalemate for the first time in VA history), has slowly turned the politics of the state on fiscal matters. Thus,while Warner ran on a No Tax pledge, he also left the door open a tad, and in addition made it clear he was willing to back regional tax increases if there was clear evidence the public didn’t oppose such levies.

    By 2004, Warner proposed a big package of tax increases and deductions, hoping to get a net $1 billion a year or so. He settled for less, but the sales tax was raised statewide despite a campaign promise to the contrary. His popularity soared: and I believe Tim Kaine, and now Bob McDonnell, took notice.

    In that regard, what has now happened in 2013 is surely, as indicated above, a logical extension of the 2004 experience. McDonnell spent the last three years trying every scheme in the book to raise large amounts of new revenue without violating his No Tax pledge. Finally, he gave in.

    That Cuccinelli remains strongly anti-tax, and McAuliffe publicly supportive of the new state and regional transportation taxes, is likewise a logical extension of the politics from 1985. Cuccinelli represents the new conservative approach of the Virginia GOP. They consider anything less than a full No Tax position to be fiscally irresponsible. This was not the view of the old conservative approach. In that regard, we can expect to see the 2013 Republican ticket be three folks all against the McDonnell tax deal. McDonnell has always been more political, and less conservative, than Cuccinelli on these kinds of issues.

    On the Democratic side, the party leaders were never comfortable with Wilder’s No Tax position. But they took it. By 2009, Democratic gubernatorial candidate Creigh Deeds became the first ever to indicate he would raise taxes – for transportation – if elected. He hedged it as best he could for the longest time but in the end, he was forced to make his pro-tax position clear. Candidate McDonnell blasted him on it. Thus the Cuccinelli v McAuliffe 2013 campaign – on the issue of taxes – could signal the formal end to the No Tax pledge era.

    As of right now, there is no evidence – once again – that being pro-tax is a big liability to McAuliffe. Indeed, depending on the politics of transportation come November, it could be a big plus, we just don’t know.  My gut: It all depends on how Cuccinelli plays the tax issue, which has historically always been the best one for the GOP. Terry’s position is clear: and he has a new transportation plan to point to the result. By and large, people know there is no free lunch. Moreover, since the new taxes were passed on a bipartisan basis, this might – or might not I can’t quite decide – be a significant plus on the pro-tax side of the debate.

    Terry’s bottom line: Here is my position, here is why I did it, you decide whether it was a good choice. This is basically what any candidate wants, a clear choice for voters when he or she believes in a policy.

    What will Cuccinelli do? He seems conflicted, even though he doesn’t believe he is conflicted based on news reports. In that regard, he isn’t like Wilder in 1989: Wilder opposed the transportation tax of his own party’s governor and never apologized, never pretended otherwise, never did anything of the sort.

    The 2013 point being: Cuccinelli, a foe of abortion, should of all people be aware that even a male politician can’t be half-pregnant. McDonnell backed the taxes, he needed those taxes – a lot of taxes – to get his “historic” transportation plan. There is no getting around this fact. Thus, Cuccinelli can’t be both anti-tax and pro-McDonnell transportation plan. He has to choose.

    When the anti-tax guy isn’t sure of this own issue, then 200-proof politics has to take notice: and wonder why. 200-proof doesn’t judge, we just analyze. Cuccinelli’s actions catch us by surprise. In this regard, he has refused to make an explicit pledge to Mr. Norquist, the No Tax pledge GOP guru.  This might be just a smart way to avoid having to deal with all the crazy pledges candidates sometime are forced to make to various groups. So you just draw the line early and say: I ain’t playing that game. This was my initial reaction. It is a smart play.

    But then again: Could it be further proof that the anti-tax pledge era is over in Virginia in terms of it being a pre-requisite to being elected governor?

    There there is a corrolary here: What about having an anti-tax image, this also no longer a big thing in VA politics?

    Perhaps it is just AG Cuccinelli blurring things for GUV candidate Cuccinelli?

    200 proof would have expected Cuccinelli to handling the anti-tax issue differently based on how Republicans see Virginia politics.

    So what gives we ask?

    We should know shortly.