by Dick Hall-Sizemore
In a break from the practices of previous governors, Gov. Glenn Youngkin appointed an outsider totally unfamiliar with state government in general and Virginia in particular to be his Secretary of Finance. Before his appointment, Steve Cummings had held several high-level positions in investment banking. After two and a half years on the job, Cummings still has a lot to learn.
The governor recently met with the General Assembly money committees in the annual meeting to report on the year-end financial status of the Commonwealth. As is customary, Cummings spoke to the committees after the governor and provided additional details on the year-end financial report.
As reported by the Washington Post, one of his slides had a footnote noting “a backlog of corporate refunds [that] had accumulated from prior years.” Lt. Gov. Winsome Earle-Sears, who was in the audience asked about it. (Earle-Sears is not a member of any of the committees and, ordinarily, the committees do not take questions from the audience at this meeting. However, the chair of the committee, due to her position, extended her the courtesy of asking for an explanation.)
Cummings explained that staff were moved in the fall of 2022 and 2023 to focus on processing tax rebate checks to individuals and that the corporate tax refunds were put on the back burner as a result. “In the time when rebates were being processed, which was crunch time, resources were moved to really focus on that, and a team actually was taking focus off of corporate refunds. And it happened more than once in more than one cycle …” Cummings said. “It was, frankly, just pushed aside.”
Earle-Sears was not happy about that answer. “If I’m a corporation and I’m waiting for my taxes to be refunded to me, it’s going to impact my bottom line,” she said. “If I wanted to buy another truck, that’s a problem, because I had the money, but I didn’t have the money because the government still held on to my refund.”
The administration refused to reveal the total amount involved, but it was obviously hundreds of millions of dollars.
Apparently, the implication that the governor was shorting businesses in order to get individual tax rebates distributed before Election Day did not sit well with the governor’s office. Thursday, Cummings took it all back. The process of individual tax refunds had nothing to do with the delay in refunding tax payments to businesses, he said. There is a perfectly good other explanation.
The Richmond Times-Dispatch reported that Cummings sent a letter to House Speaker Don Scott setting two explanations for the delay in corporate refunds. First, more corporate tax returns have required intensive review in recent years and, two, “nine of the top tax department experts who handle complicated corporate filings left state government.” He assured the Speaker that, after checking further into the matter, none of the staff working on corporate tax returns was shifted to help out with the individual tax returns.
Cummings broke a cardinal rule of making presentations to the General Assembly: You do not put anything on a Power-point slide or handout that you do not understand. He also demonstrated extreme tone-deafness regarding politics by implying that the administration was employing an all-hands-on-deck approach to getting tax rebates out to individuals before Election Day.
His most recent explanation raises even more questions. Nine senior tax specialists leaving in a short time span? That seems like a lot of turnover. Where did they go? Why did they go? Did their departures coincide with the sudden retirement of long-time popular Tax Commissioner Craig Burns and Youngkin passing over senior deputies with long experience and replacing him with a tax lawyer from outside Virginia with no experience in managing a state agency? Cummings informed the Speaker that the Tax Department has “recently” trained new employees who have been assigned to handle corporate tax returns. Supposedly, some of these vacancies date back to 2020. Why are replacements for those vacancies only now being implemented?
Sometimes it is good to bring in outsiders with fresh perspectives, but only when those outsiders are competent in the field into which they are being brought.
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