DATE: Thursday, June 19, 1997               TAG: 9706180013

SECTION: LOCAL                   PAGE: B10  EDITION: FINAL 

TYPE: Editorial 

                                            LENGTH:   50 lines

STATE REVENUE INCREASE A CHOICE AHEAD

The good news from the Allen administration is that Virginia's fiscal year may end June 30 with a surplus of $200 million or more.

While economic news in an election year always merits a dose of skepticism, there's no reason to believe that the good tidings aren't valid and that the prosperity won't continue for a while.

What's happening in Virginia mirrors what's happening nationally.

One result of a growing economy is growing tax receipts - revenues are expanding at 8 percent annually, rather than the 5.4 percent on which the budget was built. That sets the stage for a serious debate on the merits of tax relief.

It appears that, at least technically, the state will be able to afford the reduction in the personal property tax proposed by Republican gubernatorial hopeful James S. Gilmore III. Democrat Donald S. Beyer Jr. has proposed less extensive tax relief.

The ``ability'' to cut taxes does not necessarily mean that that's the ``wise'' choice, however.

When former Gov. L. Douglas Wilder faced a recession earlier in the decade, he had the choice of raising taxes or squeezing savings out of departmental budgets. Unlike the executives of some other states, he chose parsimony.

Virginia's next chief executive, it appears, will have a choice between returning the growth in revenues to the public or investing the money in infrastructure and programs.

We believe there is a strong argument for investment. Virginia has whittled costs and postponed spending on schools, roads and mental health clinics for long enough. The tax burden in Virginia remains among the lowest nationally. But we are willing to listen to contrary arguments. Certainly, many Virginians believe too little of what they earn winds up in their take-home pay.

What the rosy economic forecast allows is a full airing of the competing cases. A gubernatorial campaign should be more than dueling soundbites. It should be a chance to seriously evaluate and chose between alternative directions.

There are complexities to the messages of both Gilmore and Beyer that voters need to understand. Gilmore has done a service by ordering his priorities - first, adding 4,000 new teachers; second, increasing college scholarships; third, cutting the personal property tax. Beyer - whose agenda includes raising teacher salaries, cutting college tuition for good students, and reducing corporate taxes - should consider ordering his as well. The prospect of real money on the table means that the choice between investment and tax relief is more than theoretical. Voters deserve and should demand a full airing on the benefits and consequences of competing fiscal policies.

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