Category Archives: Business and Economy

RVA Meals Tax: Practically Poetic Injustice

Posted on March 1, 2024 by | 4 comments

by Jon Baliles

As noted, two weeks ago City Council approved the change to city code to make sure the city’s Finance Department only applies meals tax payments to the month for which the invoice is submitted. So, no more of the shady practice that had been applying a portion of say, May’s tax payment, to an outstanding balance from April’s bill. The reason that’s a bad idea is that the city could put any account in arrears but the business owner never knew because the city had a practice of not informing the business they were in arrears, which led to the crazy snowballing of interest and penalties that resulted in bills of $37,000, $50,000, and $68,000.

Samuel Veney, the owner of Philly Vegan, who was told by the city he owed $37,000 in penalties and interest, was eloquent and forceful at the City Council podium on February 12th. He implored Council not only to listen, but to hear what he way saying — he wanted to make sure they heard how he was missing time with his children and spending too much time dealing with the city’s screw-ups instead of working at his business. Said Veney:

What we are saying to y’all right now is to take the opportunity to make change happen. It shouldn’t have gotten this far and now that it has you actually have the opportunity to actually make change happen in a better way for our city. Continue reading →

4 Comments

Posted in Business and Economy, Economic development, Taxes

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A Veto-Proof Local Tax Hike Nearly Approved

Posted on February 24, 2024 by | 58 comments

Virginia sales tax rates: Light blue, 5.3%, green, 6%, dark blue, 6.3% and yellow 7%. All but the localities in dark blue would be allowed to add another 1% under this pending legislation. Click for larger view.

By Steve Haner

A bill likely to produce $1.6 billion or more in local sales tax increases is moving through the General Assembly with enough bipartisan votes to block any veto from the Governor, but differences remain between the House of Delegates and Senate versions. Continue reading →

58 Comments

Posted in Budgets, Business and Economy, Education (K-12), General Assembly, Taxes

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Democrats Lose Concerns About Taxing the Poor

Posted on February 20, 2024 by | 54 comments

Econ 101 Quiz. Virginia Democrats are poised to raise the sales tax 1% in most localities, add digital products to the taxed services, and create a new payroll tax. How will those changes impact that chart? Click for larger view.

By Steve Haner

A piece of Republican Governor Glenn Youngkin’s tax package has survived after all, but only the part that increases the sales tax base to collect about $1 billion or so more per year from citizens. Democrats who recently complained that sales tax increases were unfair to the poor are suddenly embracing them. 

On Sunday, both the Virginia Senate and the House of Delegates budget committees approved Youngkin’s budget language to impose the sales tax on a host of digital products and services, adding 6% or more to the prices of downloads, streaming services, and online data storage. The full range of newly taxed transactions is not yet clear. 

The Senate then increased the gain to the treasury by making sure the new taxes will also cover business-to-business transactions, something the governor sought to exempt and something which is just passed along in higher prices.  

The risk of including that tax policy initiative inside Youngkin’s introduced budget bill was obvious from the start, and General Assembly Democrats have now pounced on the opportunity to capture that revenue. The tax increase is now wrapped in with all the state spending for two years, a hard bill to vote against.   Continue reading →

54 Comments

Posted in Budgets, Business and Economy, General Assembly, Taxes, Uncategorized

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Four Major Progressive Goals Still Advancing

Posted on February 15, 2024 by | 47 comments

By Steve Haner

The aggressive progressive agenda working its way through the 2024 Virginia General Assembly has lost some steam at the halfway point, but at least four of the major Democratic goals discussed earlier are still advancing.   

The two bills which will have the greatest impact on the Virginia economy are the proposed minimum wage increase and a new state-managed employee benefit for workers taking time off under the Family and Medical Leave Act. The two other bills the Democratic majorities in both the Virginia Senate and House of Delegates have now approved are a major expansion of procurement preferences for minority vendors and allowing class actions in civil litigation.   Continue reading →

47 Comments

Posted in Business and Economy, Courts and law, General Assembly, Labor & workforce

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If Assembly Wants SMR Bill, Then Fix It

Posted on February 13, 2024 by | 79 comments

By Steve Haner

This is progress. Only twenty members of the Virginia Senate voted Tuesday to ignore a key tenet of utility ratemaking and put utility stockholders and profits ahead of consumer protection. Usually when the utilities persuade the General Assembly to do that to Virginia consumers, they get a bigger vote margin than 20-16.*

Senate Bill 454 allows Virginia’s two monopoly electricity providers to spend undetermined millions of dollars on planning and developing small modular nuclear reactor projects and get it all paid by consumers, with a profit margin. But there is no guarantee any such plants will ever be built, and no other power plants built in Virginia have gotten this kind of up-front financial guarantee before the State Corporation Commission ruled them in the public interest. Continue reading →

79 Comments

Posted in Business and Economy, Consumer protection, Energy, General Assembly, Regulation, Utilities

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Analog Tax Policy is Harmful in a Digital World

Posted on February 12, 2024 by | 53 comments

By Chris Braunlich

To many, testifying before a government committee conjures visions of the drama surrounding the McCarthy, Watergate, or Zuckerberg hearings.

In Virginia, not so much.  Faced with processing more than 2,600 bills in 60 days, the legislature conducts hearings that are often more of a kabuki dance, while backstage choreographers figure out the next steps.  Speakers are frequently limited to one minute and sometimes committee chairs simply ask the roomful of citizen and professional lobbyists to stand in support or opposition to a bill.  It is rarely deep and incisive content.

But these hearings are ideal opportunities to test the waters, grab a headline, position your bill for the future, ask a question directly of a bill’s sponsor, or determine where your adversaries are coming from. Continue reading →

53 Comments

Posted in Business and Economy, General Assembly, Taxes

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The Case for an RVA Meals Tax Amnesty

Posted on February 9, 2024 by | 22 comments

Richmond City Hall

by Jon Baliles

Today we are posting a special edition featuring an email from former restaurateur Brad Hemp that he recently sent to City Council about the meals tax fiasco you have probably heard about as a result of seven years of neglect at City Hall. The Mayor raised the meals tax in 2018 to help build new schools and pledged in return he would also help the restaurants. He raised the tax, and three schools were built, but he forgot about helping the restaurants.

Now, here we are, years later, and the only thing coming from City Hall are vacillating and daily changes and pledges to fix the problem on a “case-by-case” basis (in a vain attempt to get the media stories to stop). As someone who lived and breathed the restaurant business (and could teach the Mayor and Council a few things about it), Hemp has some suggestions to fix the mess. The question is, will the Mayor and City Council finally listen and do something?

RVA 5×5 — PREFACE
The best government is almost always the one that listens. It makes it easier for people to enjoy their lives, better their neighborhoods, open or run a business, and have fun. The worst government is almost aways one that pretends to know everything and thus ignores listening to or helping the people by doing things like, just as an example, forcing through a second casino referendum right after the first one lost. Another way to demonstrate bad government is to find straw-man excuses for erroneous billing of residents for personal property, real estate and water, and misapplying payments of meals taxes for restaurants and never notifying anyone when a bill is late while interest and penalties skyrocket. The “leaders” at City Hall say it’s the fault of state code, or the postal service, or bad technology, or the current lunar cycle. Don’t look inward to see if it’s an internal problem, blame it on everyone and everything else. Continue reading →

22 Comments

Posted in Business and Economy, Economic development, Finance (government), Taxes

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Rare SCC Deadlock Sinks Dominion’s Energy Plan

Posted on February 4, 2024 by | 52 comments

By Steve Haner

The year long debate over Dominion Energy Virginia’s proposed integrated resource plan, which threw climate catastrophe activists into a frenzy because it added a new natural gas plant, is ending with no decision.  Two State Corporation Commission judges split on whether to approve it, basically a win for the anti-fossil fuel forces.

In December, a hearing officer assigned to study the case had ruled that Dominion’s plan should be rejected because it included the expansion of gas generation, when the anti-natural gas forces in the General Assembly had passed laws against that 2020 and 2021.  Those laws did include provisions for maintaining or adding fossil fuel generation on the basis of a threat to reliability, but only under limited circumstances. Continue reading →

52 Comments

Posted in Business and Economy, Energy, General Assembly, Regulation, Utilities

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The Aggressive Progressive Democratic Agenda

Posted on January 31, 2024 by | 34 comments

From tiny acorns grow the mighty oaks of government.

By Steve Haner

The Democrats now running Virginia’s General Assembly are not just more progressive, but far more ambitious than their predecessors. To fully understand how ambitious you must compile the entire list of progressive bills advancing in the 2024 session and consider their total impact on the cost of living and cost of doing business in the commonwealth. Individual news stories miss the big picture.  

The push to radically regulate Virginia’s energy future discussed earlier is being mimicked with equally aggressive legislation throughout the rest of our economy. None of the ideas below are new, and most are already in law in places like California, New York or other more liberal states. What has changed is that when proposed in the past, they usually were rejected in Virginia on a bipartisan basis. Democrats now march in lockstep.  

The Assembly is still in its first phase and adjournment is set for early March. Which of the following will pass remains to be seen, and in many cases, amendments are already appearing. Most may also face gubernatorial veto or amendment, but that just underscores that Virginia is only one election of one official away from total transformation.   

In the case of the bills to increase the minimum wage (here and here), Democrats are simply building upon what they did during their last period of control. But if they succeed in setting future wage increases to automatically grow with inflation, the impact just builds and builds. Classes of employees reasonably exempted from the law currently, such as farm workers, may now be covered, as well.   

Likewise, the previous Democratic majority also took the first steps toward collective bargaining for limited groups of local employees, but only after elected local officials gave a green light to negotiate a contract. This year’s bill expands the right to bargain to almost all local and now most state employees, with no vote needed by a school board or city council. It was revealed that the most recent version does conveniently exempt employees of the General Assembly, however. Continue reading →

34 Comments

Posted in Business and Economy, Courts and law, Economic development, Energy, Environment, General Assembly, Public employee unions, Regulation

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Rent Control Legislation Passes House Committee

Posted on January 29, 2024 by | 13 comments

from Liberty Unyielding 

Legislation to allow rent control ordinances has passed a committee in Virginia’s House of Delegates. On a party-line, 11-to-9 vote. The Committee on Counties, Cities and Towns passed HB 721, which defines rent gouging to include raising rent to keep up with inflation, if inflation exceeds 7 percent.

This vote reflects the leftward movement of the Democratic Party. Rent control has historically been prohibited not merely in Republican states, but even in many Democratic states. Massachusetts, for example, banned rent control in a 1994 referendum, even as it was electing Democrats to nearly fourth-fifths of the seats in its state legislature, and even as it elected Democrats to eight of its ten seats in the U.S. House of Representatives. When Georgia still had a Democratic-controlled legislature and a Democratic governor, it banned rent control in 1984.

Yet, all Democrats on the committee voted for HB 721.

The legislation states that once a local government has adopted “anti-rent gouging provisions,” it “shall prohibit any rent increase … of more than the locality’s annual anti-rent gouging allowance,” defined as the “percentage increase in the Consumer Price Index...or seven percent, whichever is less.” So if inflation is 9% — as it was from March 2021 to March 2022 —  the landlord can only raise rent by 7%, at most. And the landlord might not be allowed any inflation adjustment at all, because under the legislation, a local government “may” — not must — “allow rent increases” to compensate for inflation.

So landlords will become poorer and poorer due to inflation under these “anti-rent gouging” ordinances. Continue reading →

13 Comments

Posted in Business and Economy, Economic development, General Assembly

Two Excellent Nominees Emerge for SCC

Posted on January 23, 2024 by | 12 comments

Kelsey A. Bagot, now nominated for the Virginia State Corporation Commission.

By Steve Haner

The new Democratic majority in the Virginia General Assembly is moving rapidly to fill the two State Corporation Commission vacancies with excellent, qualified choices. One is well known in Virginia and the second is new to our hallowed Capitol, but with a decade of energy law experience on the federal level.

Former Virginia Deputy Attorney General Samuel T. Towell has degrees from Massachusetts Institute of Technology (engineering) and the University of Virginia (law).  Kelsey A. Bagot just got her Harvard Law degree a decade ago, but she had the opportunity at the Federal Energy Regulatory Commission to work for former SCC Chairman Mark Christie.

Former Deputy Attorney General Sam Towell, also nominated today.

Both appeared this afternoon before a brief, perfunctory really, joint meeting of the relevant House and Senate committees. Within a couple of minutes, with only one question asked, both were unanimously certified as qualified. Which they are.

It will be up to the full House and Senate to formally elect them at some point in the next few days. The two seats they will fill have been vacant for a long time and they will start with desks piled high. Members of the SCC are actually judges, subject to Virginia judicial canons. The pending state budget sets the salaries as of next July 1 at $214,000 for the chair and $212,000 for the other two members. Continue reading →

12 Comments

Posted in Business and Economy, Consumer protection, General Assembly, Regulation, Utilities

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Virginia Legislation Would Define Raising Rent to Keep Pace with Inflation as ‘Rent Gouging’

Posted on January 22, 2024 by | 25 comments

from the Liberty Unyielding blog

Raising rent to keep up with inflation isn’t what most people would consider “rent gouging,” even when the landlord has to increase rent by more than 7%. For example, Washington, DC’s rent control board allowed landlords to raise rents on most tenants 8.9% in 2023, to compensate for the 6.9% inflation in Washington, DC that occurred in the previous year. But pending bills in Virginia’s legislature would allow local governments to adopt “anti-rent gouging” ordinances, that would define raising rent by more than the lesser of 7%, or inflation, as illegal “rent gouging.”

The legislation states that once a local government has adopted “anti-rent gouging provisions,” it “shall prohibit any rent increase … of more than the locality’s annual anti-rent gouging allowance,” defined as the “percentage increase in the Consumer Price Index...or seven percent, whichever is less.” So if inflation is 8% — as it was nationally in 2022 — the landlord can only raise rent by 7%, at most. And the landlord might not be allowed any inflation adjustment at all, because under the legislation, a local government “may” — not must — “allow rent increases” to compensate for inflation.

So landlords will become poorer and poorer due to inflation under the ordinances authorized by the legislation.

This seems unfair. Why shouldn’t landlords be able to raise rent to keep pace with inflation? Most tenants get pay raises or cost-of-living increases to compensate for inflation. American workers’ wages grew faster than inflation in most of the past decade, and over the cumulative ten-year period. Federal workers commonly get pay raises to offset inflation. Retirees get annual increases in their social security payments based on cost-of-living adjustments. With their increased wages, tenants should be able to pay rent that rises with inflation. But under the legislation, they could avoid doing so, and pay less than the market rate.

Effectively, this legislation would allow local governments to adopt very harsh rent control. Currently, Virginia does not have any rent control laws, either at the local government level, or at the state level. Like most states, Virginia has viewed rent control as a bad idea. Thirty-three states preempt local governments from adopting rent regulation laws.

But this legislation — which is pending in both houses of Virginia’s legislature as HB 721 and SB 366 — would for the first time give local governments in Virginia the power to impose rent control. Continue reading →

25 Comments

Posted in Business and Economy, General Assembly

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Serious Tax Reform Addressing a Serious Problem

Posted on January 22, 2024 by | 49 comments

Chris Braunlich

By Chris Braunlich

The American linguist Yogi Berra once said of a New York City restaurant: “Nobody goes there anymore.  It’s too crowded.”

Overcrowding, however, isn’t what motivates a move to a state (or from a state).  Those decisions are inspired by robust economic activity, jobs for residents, and a pathway for each generation to do better than their parents did.  People move for a job, for higher pay, for lower cost of living, or for a better education. Continue reading →

49 Comments

Posted in Budgets, Business and Economy, General Assembly, Taxes

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Index Minimum Wage? Do the Tax Code, Too.

Posted on January 19, 2024 by | 110 comments

By Steve Haner

One bill that certainly is heading for Governor Glenn Youngkin’s desk is the increase in the state’s minimum wage to $15 an hour as of two years from now. Both versions, House Bill 1 and Senate Bill 1, raise it to $13.50 for next year, with the $15 level kicking in a year later. Both bills are now out of their first committees.

It was a campaign promise. The Democrats in both chambers coordinated to make it their first bill of the year on both sides. Smart marketing. Soon the Republican governor must decide whether it becomes his first veto, with Republican legislators then having to vote to sustain it or not. Continue reading →

110 Comments

Posted in Business and Economy, General Assembly, Taxes, Unions

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U.S. Constitution Calling Jason Miyares . . .

Posted on January 15, 2024 by | 79 comments

by Jock Yellott

Affirmative action is unconstitutional, said the U .S. Supreme Court last June.

But we’ll keep doing it until somebody tells us not to, says Virginia’s Department of Transportation. In some quarters, it seems we’re seeing Massive Resistance to the Supreme Court’s ruling.

An especially absurd, and ongoing, affirmative action boondoggle called the Disadvantaged Business Enterprise program magnifies the cost of Virginia roadbuilding … and causes minority lay-offs. Yes: it’s hurting the minorities it is supposed to help.

Recently, a Charlottesville small business won a city contract to build a bike path. But the Virginia Department of Transportation told the City: deny them the contract. Not enough “good faith effort” to go find minority subcontractors, they opined.

Losing the contract means laying off the small business’s employees. Nearly half of whom are minorities. Continue reading →

79 Comments

Posted in Business and Economy, Civil Rights

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