Author Archives: Steve Haner

With Defeat in Connecticut, Will Virginia Drop TCI?

By Steve Haner

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

Why do Virginia’s leaders run away from the Transportation and Climate Initiative? Could it be because the first state legislature to consider it, in reliably Democratic Connecticut, just adjourned without even taking a vote on the proposed carbon tax compact, despite strong support from Democratic Governor Ned Lamont?

The Virginia Department of Environmental Quality has called a June 24 public meeting to discuss efforts to ramp down carbon dioxide emissions from transportation sources, but it made no mention of the pending TCI interstate compact. Instead it focused on the General Assembly’s approved 2045 goal of “net zero” emissions in all sectors of the economy, including transportation.

Reaching this target will help Virginia do its part to address the climate crisis, improve air quality and public health, and tackle inequities in our transportation network. The first step to these efforts will be public outreach and engagement by DEQ with support from our project facilitator AECOM. This project will inform an upcoming DEQ report that will investigate strategies to accelerate low-carbon transportation solutions and ultimately eliminate greenhouse gas pollution from the transportation sector,” DEQ wrote.

Is the stated goal of TCI, a 30% reduction in CO2 emissions by 2033 achieved by taxing and rationing gasoline and diesel, no longer considered sufficient by Virginia leaders seeking to avert to claimed catastrophe of climate change? Will some different “strategy” be proposed? Or are they just pretending to back away from the TCI approach for the time being? June 24 may finally bring the issue to light. Continue reading

State Revenue Up a Full Third in Northam Years

Departing Secretary of Finance Aubrey Layne

by Steve Haner

With one month to go in its fiscal year, Virginia has almost met its General Fund revenue target in the first eleven months, as the revenue bonanza described here before continues. Partly it is due to the strong economic recovery post-COVID, but it is also due to numerous increased tax rates or policy changes under Governor Ralph Northam.

With 11 months of the basic taxes now accounted for, the state has collected just a hair under $22 billion towards the $22.3 billion it estimated in the budget adopted last year and amended this winter. Compared to the same point four years ago, total GF revenue has grown a full one-third. With the deepest recession of the past century in between the comparison points.

The final numbers for June, which ends the fiscal year and may not be public until August, may change these trends, but only a bit: Sales and use tax collections are up 25% over four years, personal income tax collections are up 32% over four years, and corporate income taxes are up 91%.  The underlying inflation for that period is about 9%, so the real growth is tremendous.    Continue reading

Businesses Taxed For Somebody Else’s Layoffs?

Labor Force Participation Rates, March 2021. Source: VEC  Click for larger view. It represents the percentage of population of working age employed or seeking a job.

by Steve Haner

So many Virginia employers faltered or failed during 2020, the remaining companies may be charged a special tax of $95 on each of their own employees in 2022. It will cover the unemployment benefits paid to workers somebody else laid off, the highest so called “pool tax” ever imposed, more than double the amount collected following the previous recession in 2012.

The total unemployment insurance tax (average) may reach $360 per employee in 2022: A base tax of $249, the pool tax of $95 and a special “fund builder” tax of $16. That is more than 50% higher than the previous peak tax in 2012.

The figures emerged this morning as the Virginia Unemployment Commission staff briefed a legislative oversight panel on the financial health of the state’s beleaguered Unemployment Insurance program, swamped by a record number of claims in the COVID-19 recession and hampered by administrative failures in dealing with claims that needed extra attention.

For details, here is the UI Status Report presented today, following the usual format. VEC also provided more information on Virginia’s employment history over time, by region, industry, and locality.  Continue reading

Virginia Law Leaves Public Unions Unbound

by F. Vincent Vernuccio

First published this morning by the Thomas Jefferson Institute for Public Policy, where Vernuccio is Visiting Fellow. 

Twenty-eight years after Governor Doug Wilder signed it into law, the Virginia General Assembly lifted the ban on public sector collective bargaining. As of May 1, localities in Virginian could give government unions a monopoly to represent all employees at a particular worksite.

However, the law passed in Richmond is unique from other states as it sets virtually no guidelines on what government unions can bargain over and how they can be formed. Thankfully, it also does not mandate public sector collective bargaining, allowing localities to keep the status quo that the Commonwealth has had for decades.

First and foremost, it should be pointed out that localities can reject public sector collective bargaining. There is good reason to do so, as simply administering the process is expensive. In fact, localities that are considering allowing bargaining are estimating hundreds of thousands or even seven figures for ongoing costs for negotiations and compliance. This spending will not go for better wages or benefits for current public employees or better services for citizens —it is simply to hire more employees to administer the infrastructure of bargaining.

The costs alone could be a large reason that, while the state law allows public employees to petition their local elected officials to vote on allowing bargaining, those representatives will vote no and keep the process that has worked in the Commonwealth for generations. Continue reading

VA Employers Stuck in COVID Time Warp

By Steve Haner

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

Despite the stunning and rapid success of the vaccines in arresting the spread of COVID-19, if you enter a Virginia workplace you go back in time to the pre-vaccine era of doubt and fear.

Virginia acted in haste in adopting permanent workplace rules related to COVID 19. Now that the Centers for Disease Control has relaxed many of its requirements and conceded that others were not backed up by evidence, the state’s employers are in limbo. The workplace regulations are now badly out of step.

There was no allowance for vaccinations in the regulations, which became permanent in January just as the population was starting to get shots.

Governor Ralph Northam was warned this would happen if the temporary COVID-19 rules were made permanent but barreled ahead to the applause of organized labor. The regulations carry the weight of law and can be enforced with severe sanctions, whether or not they are in direct conflict with the latest CDC guidance. Continue reading

Clean Virginia Dissed Again, Dem Takes Dom Cash

An image of Hala Alaya’s answer to a question on Clean Virginia’s candidate questionnaire, released by it in response to her breaking of that pledge.

by Steve Haner

Prince William Democrat Hala Ayala, who had pledged not to accept campaign contributions from Dominion Energy Virginia and took money instead from its opponents, has now accepted $100,000 from the regulated monopoly. Heads are exploding.

Del. Haya Ayala, D-Prince William

The anti-Dominion activist group Clean Virginia had given her $25,000 in her bid for the Democratic nomination for lieutenant governor.  Now is has announced it will dump $125,000 into a last-ditch digital campaign to defeat her in the June 8 primary. Early voting in the primary has been underway for weeks, however. Early voters upset by this cannot call their ballots back.

Final pre-primary finance reports were released early in the week and word of the contribution quickly hit the Twitterverse, then sparked stories in today’s Richmond Times-Dispatch and Virginia Mercury. Continue reading

Democrats Fight Back as Boss Bills Cracks Whip

Michael Bills

by Steve Haner

Two Virginia Democrats who have been loyal soldiers in the army to turn Virginia green as well as blue are under attack in the June 8 primary for the sin of accepting campaign donations from Dominion Energy. It doesn’t matter to the attacker – our old friend Clean Virginia — that Dominion is moving in lockstep with the Democrats to undermine Virginia’s reliable generation mix and replace it with expensive and unreliable renewable power.

The House Democratic Caucus is responding by attacking the “dark money billionaires” who are going after their colleagues. Who? By that they would have to mean that same Clean Virginia, funded mainly by the personal fortune of hedge fund mogul Michael Bills and his wife. The same two people who did more than anybody to give Democrats that majority in the first place.

More proof, in case you needed it, that it is not your enemies you need to watch in politics but your friends. The Democrats started to lose their grip on this state 20-30 years ago because in their lust for power they fell out among themselves, and here we go again. Bring popcorn.

The basics: Delegates Steve Heretick, D-Portsmouth and Candi Mundon King, D-Prince William, face primary challengers. The primary challengers have received major funding from something new called Commonwealth Forward PAC. But as The Virginia Star reported this morning, its money actually comes from Bills and Clean Virginia.  Continue reading

Protect Taxpaying Virginians From Coming Inflation

Time for a refresher course on the Weimar Republic?

by Steve Haner

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

One of big financial winners with the May 1 Virginia minimum wage increase is the state itself, because the entire raise is subject to a 5% state income tax. With its low standard deduction and personal exemption amounts, Virginia squeezes income tax out of even its lowest wage workers. Continue reading

Tech Prof Corrected WHO, CDC on COVID Spread

Linsey C. Marr, PhD.

by Steve Haner

Wired has chronicled a one-year struggle by a Virginia Tech teacher and researcher, working mainly with other non-physicians, to convince the Centers for Disease Control and World Health Organization they were dead wrong on COVID. The kind of dead wrong that made more people dead.

The battle was quietly won when on April 30 of this year the WHO changed its published stance and admitted that the virus causing COVID-19 was readily spreading airborne far beyond the three or six foot social distancing guidance. A few days later the CDC also changed its public stance, creating a minor media ripple rather than the wave it deserved.

One of those we can thank is Linsey Marr, the Charles P. Lunsford Professor in Virginia Tech’s department of civil and environmental engineering. Megan Molteni’s article, “The 60-year-old Scientific Screw-Up that Helped COVID Kill,” opens with Marr participating in an April 2020 virtual conference with COVID science poohbahs around the world.  They uniformly blew off what they heard from Marr and other experts on aerosols. WHO had stated as fact that the SARS-2 bug was not spreading aerosol. Continue reading

State Tax Harvest Under Northam Expands Again

by Steve Haner

With the release today of the April 2021 Virginia state revenue report, a correction in an earlier post becomes necessary. Overall general fund state tax collections are not up 26% so far compared to four years ago, they are up almost 30 percent. Corporate income tax collections are not up 68%, but 86% over the same period four years ago.

Your correspondent regrets the error and admits jumping the gun after the March report knowing things would become more dramatic soon. Since the essence of good communication is repetition, expect another update in a month. And as has been the case for a while now, expect Governor Ralph Northam to seek to distract the voters from what is really going on. Continue reading

Seven GOP House Primaries on June 8

by Steve Haner

Virginia Republicans in seven of the 100 House of Delegate districts still have House nominees to pick in the June 8 primary. The focus on last Saturday’s unassembled convention for statewide candidates has overshadowed these races.

They will also be overshadowed by the Democratic nomination contests on the same date. But some of these Republican contests are showing signs of being heated, and with strong candidates picked for November could be some of the seats which determine control of the House.

In the three western Virginia contests, Republican incumbents seeking new terms face internal challenges. Three other contests have more than one Republican seeking to challenge an incumbent Democrat. One seat, House District 51 in Prince William, will have no incumbent on the ballot (Democratic Del. Hala Ayala surrendered it to run statewide).

For those of you Republicans or Independents who consider yourselves done voting until November, peruse the list and watch your email or snail mail for signs you are in one of these contested districts. Democrats, you’re all getting pushed to show up anyway by your statewide races.  Continue reading

TCI Debate Rages in Comments on Proposed Rule

by Steve Haner

The political wannabes in both parties and the state’s media are continuing to ignore it, but the argument over the proposed motor fuel carbon tax called the Transportation and Climate Initiative rages in comments on the proposal flowing into its advocates.

The Thomas Jefferson Institute has also launched a short video (above), perhaps just the first, to alert the public through more populist means. It features owners of two regional fuel businesses, well known as major local employers and taxpayers. Without doubt, Virginia’s membership in TCI would shrink and perhaps severely damage those businesses.

The video was actually ready to use had the 2021 General Assembly taken up the issue, but Governor Ralph Northam did not ask for legislative permission to join the interstate compact involved. The state remains involved in the planning for the cap and tax and ration scheme, now set for 2023 in the states who agree to the compact.

If put in place, all fuel Virginia wholesalers would need to buy government-issued allowances to sell gasoline or diesel, in effect a carbon tax. The amount of allowances will be frozen to prevent the any growth in fuel sales, and then decline annually to force down consumption, in effect rationing.  Continue reading

Virginia Taxes New Firms Higher, NC the Opposite

The overall effective tax rate on various kinds of businesses in Virginia, and how they rank against the other 50 states. (Lowest = #1) Click for larger view. Source: Tax Foundation and KPMG LLC

 

by Steve Haner

Virginia is far more tax friendly to established businesses than it is to new ones.  That’s one major conclusion of a major state-by-state business tax comparison released today (here) by the Tax Foundation and KPMG LLC.

In neighboring North Carolina, on the other hand, the tax structure encourages new investment with more attractive rates for incoming businesses of several types. It has been a conscious strategy for that state’s political leaders for some time.

Instead of seeking to put an overall ranking on the state’s business tax climate, as has been done in the past or in other studies, the Tax Foundation devised eight imaginary firms in different industries and then calculated their effective tax rate in each of the fifty states. It used tax laws and incentives as they were in force January 1 of this year.

One of the principal authors is a former General Assembly legislative aide well known around our capital, Jared Walczak, now a vice president at Tax Foundation. This approach of comparing how the various states would tax a set of reasonably typical firms is a big step up from previous methods.  Continue reading

End the Emergency Orders. Now. Every One.

Governor Ralph Northam Signals His Virtue

by Steve Haner

There is no more COVID emergency. Every single emergency order issued by Virginia’s Governor Ralph Northam should be lifted immediately. Not relaxed or revised, ended.

For the millions of Virginians now vaccinated, this is all just virtue signaling, “pandemic theater.” For the millions of Virginians who have made conscious decisions not to get the vaccine, my level of concern for them has evaporated. They, their families, and their health care providers are on their own, and, frankly, most will be fine until winter stimulates the virus again.

More Virtue Signaling

By then, more of them will have come to their senses and gotten the shots.

The rules in place are really starting to look stupid.  President Joe Biden, Governor Northam and all the others holding onto and consciously modeling needless restrictions are the real anti-vaxxers now. They are the ones clearly rejecting all the scientific evidence of vaccine effectiveness.  Continue reading

Corporate Tax Already Exploding in Virginia

by Steve Haner

First published this morning in The Roanoke Times.

With Virginia’s fiscal year now three-quarters complete, and basically one year since the depths of the COVID-19 recession, state tax revenues are soaring. Despite reports that the boom results from the economic rebound, it remains clear that changes in tax policy under Governor Ralph Northam are the major driver.

Usually, the state financial reports compare results year over year. Instead, compare the recent data to four years ago. Four years ago it was Governor Terry McAuliffe coming to the end of his term as President Donald Trump began work on what would be his legacy tax bill, the Tax Cuts and Jobs Act of 2017.

In the four years since the March 2017 report, the state’s overall general fund collections to date are up 26%, almost three times the basic inflation rate for the same period (under 9%.) That is an extra $3.35 billion compared to four years ago at the same point. That is just the General Fund, ignoring all the other ways the state taxes us, such as last year’s gasoline tax increases.

About half of the added General Fund revenue came from individual income tax withholding, up 17% or more than $1.5 billion. It is the largest revenue category, so you would expect that to lead the pack. But it leads only in dollars, not in percentage growth.

Corporate income taxes grew 68 % over four years ago. The revenue category that includes the state’s tax on real estate transactions recorded at courthouses was up 72%. State policy didn’t spark the real estate price boom behind soaring recordation taxes. But intentional state policy has increased the corporate income tax harvest by two-thirds, to $315 million more than four years ago.  Continue reading