by John Forbes

I understand that at least one Virginia business leader quoted in your "Car Tax Blues" article is upset with your representation of his views, and I suspect many others are puzzled by the article’s assertion that this administration has ignored their concerns.

Business confidence in Gov. Jim Gilmore’s leadership is best measured by corporate investment in Virginia. This administration has overseen more than 1,450 new economic development announcements that have been accompanied by more than $13 billion in investment and are creating over 151,000 jobs. Site Selection magazine ranked Virginia No. 1 for the highest per capita job creation in the United States. This is reflected in Virginia’s incredibly low unemployment rate, which this year dipped to a 40-year low and was one-half that of the nation. This record business investment speaks volumes and is in stark contrast to the bleak picture painted in your July issue.

Unfortunately, your article may have created considerable confusion among those less familiar with the facts. Your assertion that the car tax is being abolished at the expense of transportation, higher education, cultural attractions and raises to state employees was, frankly, incorrect.

Both Gov. Gilmore and the House of Delegates put forward budget plans this year that contained hundreds of millions of new dollars for college capital projects, state employee salary increases, and museums and cultural organizations, all while phasing out the car tax as scheduled. These plans were discarded by the State Senate.

In the wake of the legislative impasse, Virginia’s constitution required the governor to balance the state budget. In so doing, Gov. Gilmore was able to exempt fully all direct aid to K-12 education, operating budgets at all colleges and universities, all health and human services programs and all transportation funding. He also avoided any state employee layoffs.

The governor’s impressive leadership assured everyone from Wall Street to Main Street that, unlike other states faced with similar circumstances, Virginia would continue conducting business as usual.

Further, I believe we must be honest and put the car tax cut in its true financial context. A few facts about state spending over the past several years might illuminate: Since 1997, operating funds for higher education have increased 53 percent, or $500 million. Funding for K-12 education has increased over 35 percent, or $1.1 billion. With a record 47 percent increase in spending on transportation since Gov. Gilmore took office, Virginia is building more roads faster and more economically than ever before.

Finally, I would note the curious absence from your article of the voices of millions of appreciative Virginians to whom three or four hundred dollars in tax relief every year makes a significant difference. Also absent was the voice of small business owners across Virginia who, given the opportunity, would have been quick to point out that putting money in a consumer’s pocket positively affects their sales.

A word on your article comparing higher education spending in Virginia to that in North Carolina. While this comparison could be of interest, it is not accurate. The chart erroneously compares seven years of funding authorizations by North Carolina with just one year of state funding by Virginia. This error was compounded by your ignoring several key sources of funding in Virginia. As presented, the comparison with North Carolina incorrectly portrays Virginia in a poor light when, in fact, just the opposite is true.

Moreover, North Carolina has admitted that the capital needs of its institutions of higher education have been ignored for a decade. The $3.0 billion bond is mainly "catch-up" funding. It includes numerous infrastructure repair projects that Virginia routinely pays for through its maintenance reserve program.

Forbes is Secretary of Finance for the Commonwealth of Virginia

Editor’s note: Our July cover package reported that Gov. Jim Gilmore was responsible for many accomplishments in the state’s economic development, including low unemployment. Mr. Forbes is correct that a table published with our story on higher education funding did compare seven years of capital outlays for North Carolina public colleges compared with one year of Virginia’s. Our table explained this in a footnote. However, Virginia Business acknowledges that we could have presented the information more clearly. We regret any confusion that we may have caused.