No Need to Call the Budget Bluff
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21 responses to “No Need to Call the Budget Bluff”
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Good news.
In my opinion.
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“Based on press reports, it is difficult to say who won this battle. That’s the hallmark of a compromise.”
I believe the hallmark is that neither side is happy.
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I think sensible Virginians are happy. But then, maybe that just confirms sensible Virginians are on neither side.
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Good report! Thanks! Yes… looks like both sides took some hits as well as had some “wins”.
I expect Haner to share his viewpoint also!
But one thing I just don’t understand with regard to the naysayers never-ending rant that Virginia is not a business-friendly state and that we have no real economy, we just suck on the Feds teat.
Yet, at budget time, Youngkin and company say we have a LOT more tax revenues than “needs” and that we need a tax cut to make our economy “better” by “giving back” to taxpayers so they can spend as they see fit – and in the process – goose the economy.
Very confusing! 😉
At any rate, it appears that both the Gov and GA decided they would refrain from giving each other black eyes…
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Why does there need to be a winner and loser? The process produced a budget that spends the expected revenue on shared priorities. Looking back to the starting point, the Governor sought but failed to get a tax cut. But it was not something he had promised in the election and there was no sign of a strong coalition behind it. Nor did Democrats promise to raise taxes in their elections. They likewise had no crowd behind them begging to tax Netflix.
As I’m sure Dick would agree, Virginia has a long tradition of using the more conservative revenue projections, which means there is also a long tradition of cash on hand at the end of the fiscal year. They just decided to commit that surplus now rather than later. 🙂 I suspect we will soon learn that the concerns about refunds from the pass-thru tax rules were overblown.
Very curious if one of the people leaning on Democrats not to go to the mattresses over tax hikes was Abigail Spanberger. Isn’t it stunning how no reporter ever asks about her or asks for a comment from the putative Democrat nominee?
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I agree that Virginia has a history of using conservative revenue projections. However, in the past month or so, the governor has adjusted revenue projections upward at least twice and both the administration and legislature were anxiously waiting new projections following the state income tax filing deadline on May 1. I wonder if conservatism in revenue projecting has been thrown out the window in order to have enough to fund all the Democratic priorities without a tax increase. Also, a lot of the increased appropriations for the next fiscal year will be based on projected year-end balances for this fiscal year. Will the revenue stream that produced those balances be sufficient to sustain those increased 0n-going appropriations?
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I noticed that not much happened on compromise until May 1 had passed and there was real data available on tax collections.
The “projections” coming from Youngkin were apparently not totally believed or trusted.
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The issue about “one time” money is important when talking about budgets. Forecasts are too, especially longer term trends.
There are no underground vaults in Richmond where they keep
the “unneeded” excess tax revenues, it does get allocated and spent. That’s where the argument is.In terms of the philosophical views of taxing verses spending, GOP vs DEM… Should we look at things like Medicaid , mental health facilities, rural hospital closures, fentanyl, day care, medicaid waivers, etc to know the difference between the no-tax vs “needs” debates.
One way to think about it, in my mind, is – will increased spending for something, lead to higher productivity (as opposed to just giving money away to people)! 😉
The RGGI thing is said to be a tax. What would it be spent on?
If it is to be spend on upgrading the grid and upgrading flood-prone infrastructure – is that really a waste?The Skill games and hemp, both will lead to revenues for the
state – yet for some reason, we choose to not accept them.Why can’t we accept them and offset them? Open up more ways for Virginia’s to be productive, earn money, the state shares, and no need to increase other taxes?
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Larry I have written probably a dozen columns on how the RGGI money is split 50-50 between energy efficiency projects and flood mitigation projects. And in both cases, other revenue sources already exist so RGGI was additive. And in the decades I have spent fruitlessly discussing these things with you, there has never been a tax you didn’t want to raise. In Larry World, government is the highest and best use of money.
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Larry I have written probably a dozen columns on how the RGGI money is split 50-50 between energy efficiency projects and flood mitigation projects. And in both cases, other revenue sources already exist so RGGI was additive. And in the decades I have spent fruitlessly discussing these things with you, there has never been a tax you didn’t want to raise. In Larry World, government is the highest and best use of money.
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decades? geeze..
Nope. Tell me the other taxes for energy efficiency and flood mitigation please.
Linking the tax directly to what it is spent for – is a right way.
Take storm water management
or even water/sewer fees… or similar.taxes for roads – symmetry..
tolls for roads – the best kind of pure “user” tax.I hate taxes but I see them as necessary and again I ask… if a tax leads to greater productivity – why would we still oppose it?
And where did you support skill games and hemp with no taxes? 😉
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Maybe it just seems like decades…
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This is the oldest Bacons Rebellion post I can find, from 2002.
https://www.baconsrebellion.com/archive/issues/01/11-25-02/Whats_next.htm
I think I found the first column I wrote for Bacon’s Rebellion back when I used the pen name “Groveton”, almost exactly 14 years ago.
https://www.baconsrebellion.com/story-from-mr-groveton-err-west-potomac/
Back then, I’d send the story to Jim Bacon who would post it with his ID and with his name attached.
Somewhere along the way, the comments to the sold stories were deleted.
However, I”m sure that LarrytheG posted some comments on my story.
Interestingly, Larry used to post with his real name back then. He went anonymous and I did the opposite.
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Steve, you are wasting time in trying to reason with Larry. He likes higher taxes and expensive but wasteful environmental regulations.
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not true that I never met a tax that I didn’t like and more likely that Haner never met a tax he liked! 😉
I also prefer fee-based services as much as possible.
Such as water/sewer – where the users pay the fees, not taxpayers.
And when not possible – dedicated funding that cannot be used for other purposes, only the services they are intended to pay for like the fuel tax or the part of the fuel tax that goes to pay for removing old underground fuel
tanks.As far as I know, DMV is self funded from fees.
Then I’d ask, for instance, if we, the taxpayers pay for child care and health care that enables Mom to work to be able to pay for her family needs – rather than relying on entitlements AND she pays taxes herself – then is such a tax expenditure paying for itself?
And yes, I like the fact that all kids get “free” education and we do have 911 and law enforcement, EMS, landfill, parks and rec.. , libraries, etc…
The more cogent argument is are we getting our money’s worth and that is a valid argument, I agree but I don’t want to see the Sheriff laying off deputies or the fire dept with such a bad response time that my homeowners insurance goes up.
Mindless anti-tax sentiment is just that “mindless” IMO.
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“There are no underground vaults in Richmond where they keep the “unneeded” excess tax revenues …”
What is the Rainy Day Fund?
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All Commonwealth funds that are not needed immediately are invested or deposited into interest-bearing accounts. The state Dept. of the Treasury is responsible for managing the cash-flow needs of state agencies and the investment of state funds. https://trs.virginia.gov/Cash-Management-Investments
The Rainy Day Fund, or officially, the Revenue Stabilization Fund, is one of many funds or pots of money managed this way. The state constitution provides that interest earned by money in the Fund be retained in the Fund.
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Is there any semblance any more of a rainy day fund?
Didn’t we used to have that discipline?
We need less “needs” met by government. Government creates the obstacles and incentives that increase “needs,” then wants more money to address the problems they helped exacerbate.-
There are, in fact, two rainy day funds. The primary one is that required by the state constitution. When revenues exceed the forecast, there is a formula that requires that a certain percentage be deposited into the Revenue Stabilization Fund. Withdrawals can occur only when revenue is forecasted to fall short of projections. The other reserve fund was established several years ago by the GA. There is no required deposit and no limits on withdrawals. I don’t have the latest numbers, but two years ago, the Youngkin administration projected the total deposits in the two funds at the end of FY 2023 would be $3.8 billion and increase to $4.2 billion by the end of FY 2024. https://rga.lis.virginia.gov/Published/2022/RD415/PDF
In light of revenue exceeding projections last year and this fiscal year, I think it is same to assume that that the total in the rainy day fund will increase.
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There are, in fact, two rainy day funds. The primary one is that required by the state constitution. When revenues exceed the forecast, there is a formula that requires that a certain percentage be deposited into the Revenue Stabilization Fund. Withdrawals can occur only when revenue is forecasted to fall short of projections. The other reserve fund was established several years ago by the GA. There is no required deposit and no limits on withdrawals. I don’t have the latest numbers, but two years ago, the Youngkin administration projected the total deposits in the two funds at the end of FY 2023 would be $3.8 billion and increase to $4.2 billion by the end of FY 2024. https://rga.lis.virginia.gov/Published/2022/RD415/PDF
In light of revenue exceeding projections last year and this fiscal year, I think it is same to assume that that the total in the rainy day fund will increase.
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Thank you. We haven’t reached DC level insanity…yet!
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