DATE: Saturday, September 6, 1997           TAG: 9709060407

SECTION: LOCAL                   PAGE: B1   EDITION: FINAL 

SOURCE: BY HOLLY A. HEYSER AND KAREN WEINTRAUB, staff writers 

DATELINE: WILLIAMSBURG                      LENGTH:   61 lines

CANDIDATES' TAX-CUT TALK LEAVES LOCAL LEADERS COLD.

Candidates for governor offer it as a gift to voters, but to Hampton Roads business and political leaders, their proposals to reduce or eliminate the personal property tax sound more like a threat.

Many just don't believe the government can cut taxes while improving schools and transportation, and that made Hampton Roads Partnership a bit of a tough audience for James S. Gilmore III and Donald S. Beyer when the candidates addressed the group at a planning retreat in Williamsburg on Friday.

Members of the regional partnership took Gilmore to task for proposing to cut the unpopular tax on vehicles while talking about his commitment to public education.

``If the state has money to replace the personal property tax,'' Franklin Mayor James Councill told the candidate, ``I personally would want to have your billion dollars on top of what I already have.''

Gilmore has promised to use growth and state revenue to eliminate taxes on cars and trucks valued under $20,000.

Virginia Beach Mayor Meyera E. Oberndorf told him she doesn't trust the state to replace the $74 million the Beach now gets from the personal property tax. Without that money, she said, the city's educational system would be jeopardized.

The audience was kinder to Beyer, who tailored his dinnertime remarks to the partnership's key concerns about education, transportation and regional cooperation. But it was no less skeptical about government's ability to cut taxes while increasing spending where it's needed.

``What you hear is a broad array of proposals and plans,'' said partnership member Douglas Juanarena, CEO of Pressure Systems Inc. in Hampton. ``But the question is, where does the money come from to pay for it? With all of (the candidates), where's the money coming from?''

Portsmouth Mayor James W. Holley III offered a metaphor: ``They're both attempting to get us out of the wilderness, but no one has shown us how to get to the promised land yet.''

Beyer had anticipated the group's concerns and responded to them in his speech. After pronouncing that Virginia must build a world-class transportation system, he acknowledged that he would be asked how much the state would invest in it.

``What is enough? Have we ever had enough?'' he asked. ``I don't think it's time for (another) round of significant transportation tax increases.''

When someone asked Beyer how he would reconcile his agenda for improving schools with cutting property taxes, he responded, ``All of political life is a balancing of competing needs.''

He said a limited program for personal-property-relief, targeting people who make less than $40,000 a year, is prudent. His proposal would grant income tax credits of up to $250 per family and $150 for individuals who pay the personal property tax.

``If you're going to do tax relief at all, it makes sense to give it to the people who need it most,'' he said. ``For someone whose only priority is education, that's not an acceptable answer.''

Answers didn't come easily to Juanarena - the Hampton CEO - either. ``I'm not sure the answer is taxing more,'' he said.

Between the candidates' speeches, Norfolk businessman Joshua P. Darden Jr. said, ``This is not the time to be cutting taxes. That makes for good politics, but bad policy.''

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