Independent's day?
Russell Potts' votes could be decisive in a tight gubernatorial race

by Garry Kranz
for Virginia Business
October 2005

Don't look now but Virginia's race for governor finally is getting interesting. For months it's been shaping up as a ho-hum affair pitting former Attorney General Jerry W. Kilgore against Lt. Gov. Timothy M. Kaine. Now, state Sen. H. Russell Potts Jr. of Winchester, a maverick Republican running as an independent, is bluntly telling voters something they don't want to hear: He would raise taxes and tolls by $2.5 billion to rescue Virginia's overburdened transportation system. That promise might not get him elected, but if Potts grabs enough votes, his quixotic campaign could decide the election.

The 44-year-old Kilgore is a soft-spoken Republican who relies on a base of anti-tax, pro-business conservatives. Kaine, a-47-year-old Democrat, is banking on help from two high-profile politicians. The first is his father-in-law, former Republican Gov. Linwood Holton. Kaine also hopes to ride the coattails of popular Democratic Gov. Mark R. Warner, a possible presidential candidate who parlayed strong backing from the business community into a 2001 victory.

Kilgore, a former prosecutor, grew up in Gate City and earned a law degree from William & Mary. The Missouri-born Kaine is a Harvard Law School graduate who once worked as a missionary in a vocational school in Honduras. Both men come across as nice guys, likable if a tad too scripted at times. Occasionally they'll sling a little mud, as when Kaine tries to link Kilgore to illegal taping of Democratic conference calls by a former GOP executive. Or when Kilgore associates a series of corruption scandals in Richmond's city government with Kaine's tenure as a councilman and mayor. Yet neither seems willing to risk polarizing the centrists who may turn the tide in this election. On policy issues their positions are carefully nuanced and, well ... rather bland.

Doing his best to spice things up is Potts, who broke ranks with his party to declare himself an independent candidate. Unlike his younger counterparts, the 66-year-old Potts doesn't much care for nuance. He enters a room with the subtlety of a bulldog ready for a fight. Potts' decision to run infuriated state GOP leaders who tried to drum him out of the party. He remains unapologetic. Underdog Potts scarcely conceals his distaste for the "formidable, well-organized far-right lobby" that composes Kilgore's base.

Voters in Virginia's conservative 27th District have elected Potts to the state senate four times, including his current term. He chairs the Senate's Education and Health Committee and sits on the powerful Finance Committee. He refers to himself as a Republican "in the mold of Eisenhower and Reagan." Potts also is a seasoned campaigner who roundly dismisses Kilgore and Kaine as "childish kids who aren't talking straight with the people" on how they'll fund their numerous programs. "I have twice as much experience as both combined and I have won twice as many elections as both of them combined," Potts says in explaining why he chose to run.

Experience aside, the odds are stacked against him. The next few weeks leading up to the Nov. 8 elections are crucial to all three candidates, but especially so for Potts. Kaine and Kilgore polled almost neck and neck through the summer before Kilgore gained a 4 percentage point lead in a Washington Post poll in early September. Both are well financed. Kilgore had a war chest of more than $14 million at the end of August, while Kaine had raised more than $13 million. Potts, by contrast, had raised only $1 million, although half of that was accumulated during the summer. In addition, history does not favor Potts. The last independent to win a statewide race was Henry E. Howell Jr., elected lieutenant governor in 1971.

Trailing badly in the polls — he hovered in single digits all summer — Potts also desperately needs exposure. A televised debate on Oct. 9 would help if not for an intriguing subplot. Kilgore is scheduled to face Kaine, but he refuses to engage Potts in debate. Potts boasts of being the "best debater" of the three men, but Virginians may never get to find out. He won't be allowed to participate in the debate unless his support reaches 15 percent in two verifiable polls. That is the same cutoff used in presidential debates. Potts' support stood at only 5 percent in the Washington Post poll after garnering 9 percent in an earlier poll. (Kaine debated Potts separately in Fairfax County in September after a scheduled debate with Kilgore.)

Speculation goes that Kilgore is worried about Potts siphoning off moderate Republican votes. Clearly, Kilgore would prefer Potts simply go away. "I've said all along that debates ought to be between candidates with a chance of winning," he says with a trace of weariness.

Kaine, however, also must keep an eye on Potts, who could lure disaffected Blue Democrats to his side. "Potts is a threat to both sides, and it's difficult to say this early which candidate he'll hurt the most," says Larry Sabato, a nationally known political analyst who heads the Center for Politics at the University of Virginia.

If nothing else, Potts adds drama to the proceedings. Virginia is one of only two states, New Jersey being the other, to choose a governor this year. That would seem to make this a much-discussed showdown. Yet compared with Virginia's previous gubernatorial races, this one utterly lacks pizzazz — or at least memorable catchphrases that resonate with voters. No single issue has captured the public's imagination like the "no car tax" pledge that carried Republican Jim Gilmore into the Executive Mansion in 1997.

This year's hopefuls? They're stuck trying to galvanize voters around the state's transportation crisis, a yawner even if it is easily the most pressing concern. Indeed, monumental transportation challenges await the eventual winner. Hundreds of billions of transportation dollars are needed here, with nowhere near enough money in state coffers. Adding to this anxiety is lawmakers' failure to address transportation in the current biennial budget. Talking about Virginia's transportation problems is like talking about Social Security or the federal deficit. After awhile, many people tune out.

Not businesspeople, however. To them, transportation is the hot button of this campaign. "The limitations of our transportation network affect companies' ability to receive raw materials, ship finished product and recruit personnel," says Hugh Keogh, president of the Virginia Chamber of Commerce.

Not surprisingly Kilgore, Kaine and Potts are using the political hustings to pitch their differing schemes for propping up Virginia's sagging infrastructure. Most of their ideas, however, are maddeningly short on financial specifics. Kilgore's blueprint, for instance, contains plans to widen Interstate 66 inside the Capital Beltway, to collaborate with Maryland officials on another Potomac River crossing, and to erect a long overdue third crossing for Hampton Roads. "If we don't deal with transportation, we're not going to have the business climate that we are growing accustomed to in the commonwealth," says Kilgore.

Few would disagree. The question remains how to find enough money to bankroll those plans and other high-dollar projects. Tax increases almost certainly won't be part of Kilgore's solution. His anti-tax stance extends to Virginia's 17.5-cent levy on gasoline sales, which is among the lowest in the nation and was last adjusted in 1986. Kilgore even proposes the extraordinary step of adding an amendment to the Virginia Constitution requiring approval by voters before sales, income or gas taxes could be raised. "I just think before the government comes in and takes money out of your pocket, it ought to ask you," says Kilgore, taking a swipe at the Warner Administration's $1.4 billion tax package enacted into law a year ago.

Instead Kilgore asserts that a growing budget surplus of more than $1 billion — stemming in part from the same Warner-led tax package he opposed — should be used to underwrite new construction. He wants to dip into the general fund to replenish the Commonwealth Transportation Trust Fund, nearly depleted after being raided numerous times by legislators. Kilgore won't expressly say how much money should go to restoring the account but promises to veto future withdrawals.

Besides the surplus, Kilgore wants lawmakers to pass an abusive-driver bill carrying stiff penalties for habitual offenders, which he estimates could yield $100 million. He also plans to create several regional transportation authorities that would be empowered to set transportation priorities, explore alternative funding options and exert local control over how the money gets spent. As envisioned, these quasi-governmental bodies would be composed of local and state elected officials who could float bonds, impose tolls, privatize road-building or even conduct special referenda for sales and other taxes.

Among non-transportation topics, Kilgore talks about using the general fund to capitalize an Education Investment Trust Fund. The money would provide parents of school-age children with a $500 tax credit for non-tuition expenses "when times are good" and the treasury runs a significant surplus. Tax credits also are at the core of Kilgore's goal to attract more companies to conduct product research at Virginia's colleges and universities.

For his part, Kaine scoffs at Kilgore's intention to let regional transportation authorities conduct referenda. "I supported the regional referenda [proposed to raise transportation funds for Northern Virginia and Hampton Roads] and he opposed them. Now he's making regional referenda the centerpiece of his transportation proposal?" says Kaine.

At the same time, Kaine is trying to secure moderates by painting himself as a tax-cutter, pointing to a rollback of real-estate taxes during his term as Richmond's mayor — a time when rising property values caused city assessments to skyrocket. Kaine has proposed a plan to keep rising assessments from hiking property taxes. If elected, he would push for a constitutional amendment that would permit cities and counties to exempt up to 20 percent of the assessed value of a home or farm.

Like Kilgore, Kaine speaks only vaguely about where revenue will originate for his ambitious proposals. They include tax credits of roughly $300 million annually to help small businesses buy health insurance, and a prekindergarten program costing at least another $300 million per year. To fund transportation, Kaine advocates using an unspecified amount of the budget surplus, along with $160 million collected annually from taxes on automobile insurance premiums. "Transportation is a great use of surplus dollars because you're putting it in the ground. People can use [the transportation improvements] for a generation. Plus, it enables you to draw down more federal dollars" for highways and similar road projects, says Kaine.

Meanwhile, Kaine vows to "lock up" the transportation trust fund via a constitutional amendment — a four-year process that would not take effect until after the gubernatorial term concludes — and he pledges to block General Assembly requests for new spending until he gets it. "I just don't think you can honestly look people in the face and ask them for more [money] if the legislature is going to pull it out and use it for something else," says Kaine.

Yet he quickly adds: "I won't take any issues off the table" — a hedge that leaves him room to maneuver on the politically sensitive topic of raising gas taxes. It is a political football that gets kicked around seemingly every legislative session.

Kaine's position on taxes is ceaselessly under siege. Says Kilgore: "My goodness. He supported the largest tax increase in [Virginia] history. He ran in 2001 saying he did not favor tax increases, yet in 2003 and 2004, all of a sudden he favored tax increases. Now in 2005, when he's facing the voters again, he's saying, 'Vote for me, I'm going to reduce your property tax.'"

Potts doesn't like the sound of either big-party candidate. He derides Kilgore's regional transportation authority proposal as a "cockamamie plan." He blasts Kilgore and Kaine as irresponsible for telling voters the general fund can help solve funding shortages for transportation. "If you pay for it out of the general fund, the question [you] have to ask logically is, 'What are you going to cut out?' Higher education, and if so by how much? Public education? If so and by how much?" says Potts.

Potts wants to create a "Transportation Future Fund" to fix the state's infrastructure. Potential revenue sources include: $840 million collected by raising the state sales tax from 5 to 6 percent; $580 million from boosting the tax on a pack of cigarettes from 30 cents to $1; $180 million from a 1 percentage point increase in the motor vehicle sales tax; and $1 billion in tolls on major interstate highways.

He calls such drastic measures necessary investments in Virginia's future. "I hate taxes, but I love Virginia more. And there's not a successful business out there that has not invested in its future."

True enough. Then again shepherding additional taxes through both state houses seems like a Herculean task, particularly on the heels of last year's bruising budget battle. Of course, that's assuming Potts overcomes the numerous hurdles he faces to do the unthinkable: win a three-way race by getting at least 34 percent of the vote.

Given Virginia's traditionally conservative tendencies, Sabato says Kilgore could have a slight historical edge, especially if voter turnout is low. "Kilgore has to define himself as the only conservative candidate running against two liberals. If he is identified too much with the far right, he will not win," Sabato says.

Kaine's key to victory: capitalize on Mark Warner's popularity. But, with presidential aspirations in 2008, Warner may have to be cautious about becoming too involved in Kaine's candidacy. He could suffer a party backlash if he is unable to deliver victory in November. "If he can't get his own lieutenant elected, [Democratic Party leaders] will ask, 'Why should we bet the South on him?'" says Sabato.

Bubbling below the surface is conjecture that Potts ultimately will drop out of the race and throw his support to Kaine. Potts sniffs at such a suggestion. With characteristic brashness he predicts: "We are going to pull off the biggest upset in the history of Virginia politics." Potts still seems like a very long shot to win. Even so, he could influence the outcome by attracting just enough moderates to split the vote. The man who would be governor may have settle for being Virginia's new kingmaker.