Today’s column is in the form of a consumer advisory: how to avoid getting tricked in the marketplace.
Some of this should be simple.
If some guy shows up at your door, says he’s part of a road crew that has some leftover asphalt and he’ll patch your driveway for a cut rate, don’t believe it.
If you get a text purporting to be from your bank that says you need to send your account number to resolve a problem, don’t believe it.
And if a candidate for governor says they intend to do away with the car tax, don’t believe that, either.
We should know by now not to fall for the first two; Virginians may still need some warnings about the promise of a car tax repeal.
Both candidates for governor — Democrat Abigail Spanberger and Republican Winsome Earle-Sears — say they’d like to get rid of what they both call “the most hated tax” in the state (a phrase Gov. Glenn Youngkin has used, as well). It’s not that I doubt their sincerity. What I doubt are the politics and economics that would make that repeal possible. We should all be clear-eyed about that and not be swayed by campaign appeals that aren’t rooted in reality.
Here’s the essential thing to know about the “car tax,” more properly the personal property tax on vehicles: This isn’t a state tax. It’s a local tax. Any local government in Virginia could repeal that tax right now if it wanted to. The reason that hasn’t happened is that no local government, not even the most conservative ones, wanted to give up that revenue. Lynchburg, which has a 6-1 Republican majority on its city council, recently debated a proposal to eliminate the car tax — and didn’t. If Lynchburg can’t figure out how to do it, I’m skeptical any local government can.
Lynchburg appears to get $26 million a year from the car tax. For all the commotion over Lynchburg’s budget this year, the budget that was passed — while $3.1 million lower than what the city manager had proposed — was still $14 million higher than what it had been in the previous fiscal year. If figuring out how to cut $3.1 million causes such problems, how can we expect Lynchburg to cut another $26 million?
Statewide, the car tax is the second biggest revenue-generator for local governments, according to the state’s Auditor of Public Accounts: $3.9 billion. For context: That’s bigger than Virginia’s current state surplus.
Eliminating the car tax ultimately means either a) making politically unrealistic budget cuts or b) approving politically unrealistic increases in other taxes to make up the difference or c) some combination of the two. That’s why there’s no enthusiasm among local governments to eliminate the tax.
Virginia’s fixation with the car tax goes back to 1997, when Republican Jim Gilmore made that the centerpiece of his campaign for governor. “No Car Tax!” was the single most effective campaign slogan I’ve ever seen (with Henry Howell’s “Keep the Big Boy Honest” a far distant second). Politically speaking, Gilmore’s campaign was genius. The taxes were highest in Northern Virginia; the focus on the car tax helped him carry Fairfax County — against a Democrat from Northern Virginia. It was politically genius in another way; Gilmore’s plan seemed to involve no pain. He intended to use money from the state surplus to reimburse local governments what they wouldn’t collect from individual taxpayers. Car owners got a tax break, local governments were kept whole — and the state government had less money to spend. It was a Republican dream. Or, at least that was the plan.
Some of the car tax got phased out, but the economy sometimes goes up and sometimes goes down — and when it went down, those big surpluses weren’t there anymore. You can argue that the state still has plenty of money to complete the phase-out, but there are also those who argue that a) we need that money for other priorities and b) we shouldn’t commit so much state revenue to recurring expenses.
That’s the situation we’re in now.
Here’s why we should be skeptical that either a Governor Earle-Sears or a Governor Spanberger could do away with the car tax:
Neither has proposed a plan
In 1997, Gilmore had a plan. Whether it was a good plan or not is irrelevant to my point here. He had the details figured out, so when he won, he could rightly claim he had a mandate to carry out that plan.
Neither Earle-Sears nor Spanberger has produced a plan.
Earle-Sears, who rarely gives interviews outside the conservative news sphere, told a group of Fairfax County Republicans that “We are going to get rid of this daggone car tax once and for all” but hasn’t detailed how. Spanberger, in a gaggle with Roanoke journalists during a recent interview, didn’t have details, either. “I will work with anyone, Democrats, Republican, General Assembly members from any region across Virginia, if they are serious about getting rid of this much, much hated tax,” she said. “I look forward to working with anyone who is serious about actually doing it right once and for all.”
That’s a fine, collaborative sentiment, but the reference to being willing to work “with anyone who is serious” is a loophole the size of a stretch limo. I’m not convinced there are enough legislators serious about doing away with the car tax to put together a pick-up basketball game, so Spanberger’s willingness to work with them doesn’t get her anywhere close to a majority. That brings us to the other reason to be skeptical that either candidate will do away with the car tax.
There seems little interest in the General Assembly
Youngkin had a car tax proposal earlier this year. It died quietly. I didn’t hear many Republicans express enthusiasm for it. If Republicans aren’t going to champion a tax cut, who will? Let’s look at the most likely electoral outcomes:
- Spanberger wins, while Democrats retain a majority in the House to go along with the Democratic majority in the Senate (which isn’t on the ballot this year). That Democratic House will have many priorities. I haven’t exactly seen a lot of Democratic candidates say car tax repeal is a priority.
- Earle-Sears wins and brings in a Republican majority in the House. If she made car tax repeal a priority, perhaps she could get that through the House, but she’d still face a Democratic majority in the Senate. Does she really think that Senate Finance chair Louise Lucas, D-Portsmouth, who single-handedly killed Youngkin’s plan for a sports arena in Alexandria, is going to let that out of her committee? Regardless of who the governor is, Lucas is the most powerful political figure in state government.
To truly eliminate the car tax, Republicans would need to win this year, then win again in two years to take a Senate majority — and then have a plan that won’t cause financial pain for lots of Republican-run rural localities across the state. Even if the former two scenarios are possible, the third may be the hardest to overcome.
I have a hard time seeing a path to get a car tax repeal through the legislature — even if someone can figure out how to make up for the $3.9 billion that local governments are currently collecting. As a taxpayer, I’d love to be wrong about this, but as a political analyst, I’m pretty confident I need to make sure I have enough money in the bank to keep paying that tax. But wait, there’s more …
Virginia’s political landscape has changed in ways that make it harder to repeal the tax
They say the devil’s in the details. If that’s so, the car tax is practically satanic. The concept of having the state reimburse local governments for not imposing a car tax sounds simple but isn’t — localities have wildly different tax rates. A 2024 study by the Virginia Department of Taxation found that Pittsylvania County had the highest personal property tax rate in the state ($9 per $100 of assessed value) while Bath County had the lowest (55 cents).
Pittsylvania’s an outlier. In general, the highest tax rates are in Northern Virginia. That 2024 study by the Virginia Department of Taxation found the rate was $4.15 in Loudoun County, $4.57 in Fairfax County, $5 in Arlington County. The lowest rates are in rural Virginia: $1.95 in Buchanan County, $1.85 in Dickenson County, $1.71 in Patrick County, $1.70 in Washington County, $1.65 in Scott County and Wise County, $1.55 in Henry County — and then that bargain rate of 55 cents in Bath County.
One argument against the state reimbursing localities is that it involves sending the most money to the most affluent counties in the state. The counterargument is, well, that’s what those localities are charging. Rural localities would get more if they had higher tax rates, but they don’t.
That argument against sending tax money to affluent localities didn’t hold much sway in the late 1990s, but here’s what’s changed since: our political geography. Northern Virginia in the 1990s was still swing territory. Gilmore carried Fairfax narrowly; he won Loudoun and Prince William by a landslide. Today, all those are solidly Democratic. In that 1997 election, Gilmore’s Democratic opponent (Don Beyer, now a congressman from the 8th District) won many of the coal counties. That sure doesn’t happen today. Rural Virginia, especially Southwest Virginia, has become the most Republican part of Virginia.
That means the party with the most interest in doing away with the tax (I’m going to assume that’s Republicans) now represents the least affluent parts of Virginia. While their rural constituents may not like the tax (who does?), how much are those rural Republican legislators going to push for repeal if it means sending more state dollars to not just the most affluent parts of the state, but also the most Democratic? I can already picture some primary challenge in a rural district: Incumbent So-and-So voted for a billion-dollar bailout of Democrats!
Or …
Incumbent So-and-So could have voted to help fund our schools. Instead, he voted to send it to Northern Virginia to bail out electric car owners!
(If you’re going this route, you may as well go all the way. If I were designing the ad for that Republican primary challenger, I’d start by showing some worn-out school in rural Virginia with outdated maps and other supplies, then cut to some suburbanites charging their electric car and sneering pretentiously at the camera. “Thanks for my tax cut, Bubba! Sorry about your schools. Maybe you should have learned to code.”)
There are certainly ways to frame a car tax repeal in more positive terms, but this is politics. My point is that the political landscape has changed dramatically since 1997 — and changed in ways that may make a car tax repeal more difficult. Instead, we’re going to elect a governor who, regardless of who it is, may want to repeal the tax but won’t have a mandate for a specific plan — and will face a legislature that may just not be very interested.
This fall, vote for whoever you want to see as the next governor. Just don’t count on that car tax cut.
Want to see where the statewide candidates stand? We’ve sent questionnaires to all of them and posted the responses from the ones who have replied in our Voter Guide. We’ve also sent questionnaires to all the House of Delegates candidates across the state, as well as to local candidates in Southwest and Southside. We’ll be posting those responses in August after we build out more parts of the Voter Guide.
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