Category Archives: Taxes

Virginia’s “Runaway” Budget Negotiators

by Derrick A. Max

(This column was first published by the Thomas Jefferson Institute for Public Policy)

Fear of commitment is a common theme in Hollywood — where romantic comedies are replete with characters that sidestep long-term commitment primarily out of fear that someone better may come along. Think of Runaway Bride, where Maggie, played by Julia Roberts, keeps running away from her betrothed at the altar out of such fear.

The budget amendments passed last Wednesday with bipartisan support and praise from Governor Youngkin are replete with commitment issues. The approved tax cuts and new spending were written to have very little impact beyond the current budget cycle. Like Maggie, both Governor Youngkin and the Senate Democrats are clearly standing at the budget altar hoping for better options after the November elections. Continue reading

Youngkin’s Partial Tax Wins are Still Impressive

Virginia Gov. Glenn Youngkin (R)

By Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy.

Governor Glenn Youngkin (R) and the legislators of both parties who have given him at least some of the tax reforms he asked for need to stop being shy and take a real victory lap.  He has been in office less than two years and has diverted $5 billion from tax coffers back to Virginia’s citizens so far, with more to come in 2024 and beyond.

Most of that was approved by the 2022 General Assembly and is now in effect for a second full tax year, but the 2023 General Assembly just sweetened the pot.  The long-delayed budget compromise approved September 6 added more than $1 billion in single-shot refunds and long-term tax cuts. Continue reading

Which Virginia Taxes Have Grown and How Much

Click for larger view.

By Steve Haner

What a difference just four years has made in Virginia’s financial condition, with the state’s General Fund tax revenue having increased 31% during the period and its Commonwealth Transportation Fund revenue increasing by almost 36%. This is comparing the annual results for the fiscal years ending June 30, 2023, just released, and the same summary for the year ending June 30, 2019. Continue reading

Virginia’s Balance Sheet is Embarrassingly Strong

Virginia is floating on a sea of unspent cash, but tax relief fails again.

By Steve Haner

“Our balance sheet couldn’t be stronger…this is our moment to soar.”

So said Virginia Governor Glenn Youngkin Wednesday. Every year, our governors come to the legislature to report on the end of the fiscal year financial result, and often they say something like that. They always prefer to bring a happy message over one of caution or doom.

This time, however, it is true. Continue reading

Cruise Subsidy More Important Than Tax Relief?

What is this cruise ship doing in a story about Virginia’s budget and tax fight? Read and learn.

The Richmond Times-Dispatch has obtained and released the most recent negotiating offer from Democrats in the Senate as the standoff between the two political parties over the state budget continues.  It is contained in an on-line article that doesn’t appear to have made it into the print edition yet. Continue reading

Virginia’s New “The Stupid Party”

by Chris Braunlich

From the ‘50s to the mid-‘70s, the Republican Party was known as “the stupid party” – locked in the past, making foolish decisions, promoting unwise and counterproductive policies.

Today, in Virginia, “the stupid party” has returned. But it is no longer Republican.

The current battle over Virginia’s budget and the prospects for tax reduction and reform affirms the Left’s governing philosophy: what the government has belongs to the government and what the taxpayer has is negotiable.

With a $5.1 billion surplus exceeding the last fiscal year’s projections, Governor Glenn Youngkin proposes to return $1 billion — less than 20 percent — to the taxpayers from whom it came, in the form of permanent rate reform. He would spend the remainder on education, behavioral health, law enforcement and other projects. Senate Democrats, on the other hand, want to spend all of it, offering, at best, a one-time rebate giving them “first dibs” on future excessive tax revenue. Continue reading

Paid In Full, State Needs to Give Us Our Change

By Barbara Hollingsworth

Imagine a merchant refusing to hand over the change when a customer paid with a $20 bill for a $17.50 item. Virginians would be irate if a restaurant, bar, grocery store, or other private establishment decided to keep the change because the business might “need” the extra money in the future. Yet the Virginia General Assembly is attempting to do the same thing on a much larger scale.

The latest preliminary figures from the Virginia Department of Revenue put the current general fund budget surplus at more than $5.1 billion for fiscal year 2023, which ended June 30. This is more than double the $1.94 billion surplus the commonwealth posted in 2022. This huge surplus is money left over after every single item in the state budget was fully funded under the amended 2022 Appropriation Act, including education, health and welfare, transportation, public safety, and every department and program funded with state tax dollars.

This unprecedented revenue surplus was largely due to higher-than-expected payroll withholding of individual income taxes (which are still not indexed to inflation), as well as corporate and sales taxes.

In other words, Virginia taxpayers were overcharged $5.1 billion over the past two years and $3 billion more than the commonwealth’s own 2023 revenue forecast. And yet some members of the General Assembly, all of whom are up for re-election in November, don’t want to give any of it back. Continue reading

Restoring Sales Tax Holiday is Not Tax Relief

by Steve Haner

Virginia’s Democratic legislators are convinced that citizens are happy to pay taxes for state services and will rebel at the polls if taxes are cut when there are “unmet vital needs.”  That is why they have so far resisted any and all proposals from Governor Glenn Youngkin and Republican legislators to split the state’s fat cash surplus between tax relief and more spending.

So, why are those same Democrats not applauding the 2023 General Assembly’s failure to extend the state’s previous pre-school sales tax holiday? Shouldn’t the voters be happy to pay more for school supplies and clothes since the schools need the money? Instead they are joining the scramble to reinstate that tax break, open to all taxpayers, rich and poor.

The good news is the Assembly’s incompetence (or was it an accident?) in letting the sales tax holiday lapse is providing another prod to keep Democrats at the table for tax policy discussions. Frankly, from a tax policy purist point of view, these tax holidays are not good policy, but they are wildly popular.

That is because the sales and use tax is one people can see at the checkout counter. If you are saving $6-$7 on a Target run or Amazon bill, you notice. The other tax cuts under discussion – a higher standard deduction, a tweak to the income level that triggers the top income tax rate – only come up at tax-filing time, and if you use a computer program or outside accountant to file, you may never notice.

The bad news is that now the General Assembly can come together and fix this oversight (if it was an oversight) and claim a victory for taxpayers. They will claim a bipartisan victory over something that leaves those taxpayers exactly where they were a year ago, no better off at all. From the beginning, the claim that nobody had put the sales tax holiday on the Assembly’s radar during the session has lacked credibility. If so, retailers need new lobbyists. Continue reading

Senators Cry “Voodoo Estimating” In Tax Fight

By Steve Haner

First published this morning by the Thomas Jefferson Institue for Public Policy.

Not only are the leading Virginia Senate budget negotiators adamantly opposed to providing Virginians with additional tax relief in this election year, but they are now hinting at partial roll back of one of the major individual tax reforms approved just last year.

When the 2022 General Assembly approved a major increase in the standard deduction used by most Virginia taxpayers, it applied a condition — that the underlying General Fund revenue had to continue to grow at least 5% in both fiscal years 2022 and 2023. If it did not, the standard deduction for that year would be reduced again. The revenue growth would be adjusted for the tax cuts, so the target was 5% growth before the revenue reductions those caused.

Meeting that trigger target for FY 2022 was easy in that year’s overheated economy. Last week Governor Glenn Youngkin’s administration certified that the second target was also met, meaning the full standard deduction also applies for this tax year. The goal was barely met, with growth of 5.1%, leading Democrats to accuse the Department of Taxation of “voodoo estimating.”

The accusation against the usually-trusted tax staff was reported in a Richmond Times-Dispatch article. It failed to address whether the Democrats plan to act on their suspicions, but why complain otherwise? If they fight to certify the target was missed, and win, the standard deduction for a married couple filing jointly will drop by $1,000 and their tax bill will rise $58. A key Democrat dismissed it as “less than $30,” but that is for an individual. Continue reading

Virginians Overtaxed as Youngkin Urges Budget Deal

by Shaun Kenney

With state revenue projections north of $5 billion, Virginia Gov. Glenn Youngkin (R) renewed his call for a budget deal with Senate Democrats as negotiators with the Virginia General Assembly met for the first time since June.

“Virginians remain overtaxed. Last year we provided $4 billion of tax relief for individuals, families, and veterans. What this year’s preliminary numbers tell us is that even after that historic tax package, the Commonwealth ended fiscal year 2023 with $5.1 billion in excess resources, far more than forecasted,” said Gov. Youngkin.

“There is plenty of money in the system to fund our shared priorities of education, behavioral health, and law enforcement while returning more of Virginians hard-earned dollars back to their wallets. Just as we did last year, I am calling on the General Assembly to reject the partisan, business-as-usual approach in Richmond, and agree on a deal that lowers the cost of living and cost of doing business in Virginia while investing in our shared priorities. This is not about Republicans and Democrats. It’s not about the Senate or the House. It’s about delivering for Virginians.”

Already, Virginia is returning some $1 billion to small businesses, with Secretary of Finance Steve Cummings confirming Friday that the state expects to return “something more than a billion” dollars to taxpayers who had taken advantage of a new tax benefit for pass-through entities, such as limited liabilities and other unincorporated businesses, that allows them to avoid a $10,000 cap on federal income tax deductions for state and local taxes.
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Governor, GOP Not Selling Their Tax Reforms

Time’s A-Wasting.

by Steve Haner

The following paragraph was written five months ago. It is reproduced now with some emphasis added.

The 2023 Virginia General Assembly tax debate is just another revival of an old political show. Last year it ended well for new Governor Glenn Youngkin (R) and for those hoping to pay less in state taxes.  This year is not guaranteed to see the same outcome, not unless there is a late push to engage public attention as the House and Senate seek compromise.

Continue reading

RGGI Reg Repealed, But RGGI Tax Returns to Bills

The states currently in the Regional Greenhouse Gas Initiative tax compact.  Put an X through Virginia as of January 2024? Pennsylvania remains covered with a question mark.

by Steve Haner

Virginia’s Air Pollution Control Board voted Wednesday to remove Virginia from the Regional Greenhouse Gas Initiative, keeping Republican Governor Glenn Youngkin’s promise to eliminate the related carbon tax that has been imposed on electricity ratepayers under RGGI since January 2021.

The bad news is the tax itself won’t disappear until at the earliest September 2024.  Collection from customers has been delayed.  A separate bill surcharge to collect the tax, imposed and then removed by Dominion Energy Virginia, is likely to be imposed again as of September 1 of this year.  A State Corporation Commission hearing examiner has recommended approval of Dominion’s petition to collect another $350 million or so from its customers.

The surcharge is still being calculated, as there remains some dispute over what the full costs are.  The warmer than normal winter reduced electricity demand and required fewer RGGI credits.  The surcharge should settle somewhere above $4 per 1,000 kilowatt hours of usage.  In effect, as the hearing examiner notes, Dominion is seeking to collect 17 months of RGGI allowance costs in just 12 months. Continue reading

Without Full $1B Tax Cut, Let July 1 Deadline Pass

by Steve Haner

Because the federal government cannot operate without constantly borrowing money, members of Congress in both parties recently held their noses and voted for a compromise budget and borrowing deal. That need not and should not happen now in Virginia.

There is no similar pressure in Virginia, even though the June 30 end of the state fiscal year approaches. Virginia has a viable, fully balanced budget that runs through June 30, 2024. The stalemate underway involves only unadopted second-year amendments.

Governor Glenn Youngkin and the House of Delegates should insist that any amendments to that new fiscal year budget include every dollar of tax relief they approved earlier this year. None of the spending increases approved by either the House or the Virginia Senate should be included unless the full amount of tax relief accompanies them.

If the July deadline passes with no action, with no agreement to couple tax cuts with spending increases, Virginia’s Republican legislators will have accomplished what their colleagues in Washington failed to do (and in fairness couldn’t do). They will have stood firm until the taxpayers received the same level of consideration as those who consume those taxes.

The real decision deadline is Election Day in November. Continuing the stalemate would give the voters a clear choice between the House vision of tax relief coupled with reasonable spending growth, or the Senate vision of mainly higher spending and zero tax relief. Continue reading

Read It and Weep – DEI at UVa

Navy helicopter overflies UVa Disharoon Park as team stands at attention for national anthem. Photos By Sanjay Suchak, sanjay@virginia.edu

by James C. Sherlock

Kerry Daugherty’s column this morning was heart-wrenching for anyone who cares at all about kids’ educations.  The Norfolk School Board voted 6-1…

to begin teaching gender ideology, masturbation, sexual identity, homosexuality, abortion and lesbianism in middle and high schools.

To kids who cannot read or perform mathematics at grade level.

Now we get a look at what awaits any kid who escapes Norfolk public schools with sufficient skills and diversity credits to get accepted into the University of Virginia (UVa).

They will be welcomed by a Diversity, Equity and Inclusion (DEI) bureaucracy so large, powerful and widely distributed that a DEI factotum will:

  • review and grade their application in the recruitment process;
  • exercise authority over the curriculum and faculty;
  • monitor their progress; and
  • interview each candidate for graduate school and meet with each annually to assess political views.

If I just told you how this works as above, you would think I was making it up.

So I will quote from UVa’s website. Continue reading

As U.S. Teeters On the Brink of Recession, Virginia Beach Hikes Taxes

Clouds gather over Va Beach. (Bob Rayner)

by Kerry Dougherty

Do you mind if I’m brutally honest for a minute? Good. Because there’s no stopping me today.

Any member of the Virginia Beach City Council majority who voted Tuesday to approve an obscene $2.5 billion budget as the country teeters on the edge of a recession is a liar if they try to tell you they didn’t raise taxes.

I mean it. Join me in calling them LIARS.

While it’s true these politicians left the tax RATE alone, assessments jumped an average of 9%, with some of us seeing much sharper increases.

That means almost every homeowner in Virginia Beach just got a big fat tax hike. Combine that with an inflation rate of about 5%and the average working family trying to stay above water in the resort city is drowning.
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