NCPA - National Center for Policy Analysis


March 9, 2006

Virginia probably now suffers the most rapidly increasing taxes and spending in the nation, says Peter Ferrara, president of the Virginia Free Enterprise Fund and a senior fellow at the Institute for Policy Innovation.


  • In 2004, then Gov. Mark Warner argued that the state faced an intractable budget deficit, and proposed to fix it with a record tax increase of $1.1 billion in the first two years alone.
  • The Republican House of Delegates produced a balanced budget that increased state spending by over 10 percent without any tax increase.
  • But the Senate Republican leadership responded with a bill to raise taxes by an extremist $3.9 billion in just the first two years, and insisted they would shut down the government unless their tax increase was passed.

This ultimately led the legislature to adopt a tax increase generating $1.4 billion in a two-year budget that increased state spending by 19 percent. Even with that increase, the state has since reported a surplus of $2 billion. This proves all the talk of a deficit was an egregious falsehood, says Ferrara.

Now Democrat Gov. Tim Kaine has proposed a new budget for the next two years that would raise state spending another 16.6 percent, backed by a tax increase raising another billion a year. That would be a rise in state taxes and spending of 35.6 percent in four years. While the House of Delegates again opposes any tax increase, the badly confused Senate Republicans overwhelmingly support it, says Ferrara.

Source: Peter Ferrara, "Letter to the Editor," March 9, 2006.

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