A Really Sweet Valentine

Photo Credit: WHSV

By Dick Hall-Sizemore

Governor Northam recently gave the budget conferees a $730 million Valentine.

Based on January’s revenue report and year-to-date collections, the Governor has revised the general fund forecast to include an additional $410 million in FY 2021 and $320 million in FY 2022.

The main factor leading to the increase was the unanticipated growth in sales tax revenues. Overall, the General Fund revenues through January grew by 6.0% over the same period a year ago. By comparison, the current budget is based on an estimated annual General Fund revenue growth of 1.2%.  The Governor’s letter to the money committees is here; a Power Point summation of the forecast increase is here; and the detailed January revenue report is here.

Del. Kirk Cox, R-Chesterfield, the former Speaker of the House and a candidate for the Republican gubernatorial nomination, called on the General Assembly to rebate the additional money to state residents in the form of $190 for individuals and $380 for families. He framed the proposal as a way of helping Virginia families struggling as a result of the pandemic.

The administration and the chairman of the House Appropriations Committee, on which Cox sits, were quick to dismiss Cox’s proposal as gubernatorial campaign rhetoric. Del. Luke Torian, D-Prince William, pointed out that, even with the increased forecast, the General Fund forecast is still below what it was a year ago before the pandemic began. He pointed out the additional revenue would go a long way in settling the differences between the House and Senate budget bills. (Translation: Both sides get largely what they want.)

My soapbox

There are certainly families struggling in the Commonwealth from economic hardship caused by shutdowns and business closings resulting from COVID-19.  However, not all families are struggling financially. The year-to-date revenue from nonwithholding sources in January was 28.5% higher than it was for a similar period a year ago. Recordation taxes from deeds, wills, and contracts was 37.5% higher. Both are indications of considerable financial activity going on at certain levels of the economy.

There are better ways to assist struggling families than sending $190 to every potential voter. According to the RTD, the Governor’s office has indicated that the $410 million increase for the current fiscal year should be used for one-time purposes. Directing that money to supplementary unemployment benefits, additional rent and mortgage relief, or grants to small businesses would be much better ways to help those that are really suffering.