Category Archives: Budgets

DOE Response to Average Teacher Salary Issues

Posted on September 28, 2023 by | 15 comments

by Dick Hall-Sizemore

My article on average teacher salaries must have struck a nerve. This morning I received an answer to my inquiry from the Department of Education (DOE).

In short, DOE disavows any responsibility for the accuracy of the data in the report it submitted to the General Assembly.

The Office of Communications declares, “All data in the teacher salary survey report is based on data certified by school division superintendents. VDOE staff tries to identify as many of the variances as possible and obtain corrections from school divisions within the time-frame available each fall.” Continue reading →

15 Comments

Posted in Budgets, Education (K-12), General Assembly

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A Case Against Further Tax Cuts

Posted on September 24, 2023 by | 172 comments

by Dick Hall-Sizemore

After more than a decade of state budget revenue shortfalls and concomitant budget cuts, one would think there would be smiles all round at the news of revenues coming in substantially above the projections, resulting in a healthy general fund surplus. Incongruously, that was not the case.

Republicans seemed to be outraged that the state brought in so much more money than was projected. There were calls to give it back to the taxpayers. It is somewhat curious that these are the folks who often demand that government be run like a business, yet there are no demands that large companies, such as big oil companies, for example, give refunds to their customers when they bring in record profits.

Governor Youngkin, not satisfied with large tax cuts in 2022, wants taxes cut even further. In July, citing the expectation of revenues exceeding the forecast (which was admittedly on the low side), he declared, “There’s no reason why we shouldn’t be able to have a substantial tax reduction.” In his address to the money committees in August, after citing the advances his administration had accomplished with the increased revenues and the challenges still ahead, he announced, “This is our moment to soar.” But, not too high, it would appear, because “we must provide substantial tax relief.” Continue reading →

172 Comments

Posted in Budgets, General Assembly, Taxes

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Transparency? Hah!

Posted on September 21, 2023 by | 27 comments

by Dick Hall-Sizemore

Maybe it was the weirdness of amending the biennial budget after Year 2 of the biennium had started.  Maybe all the money they had to spend made them dizzy. Maybe they were in a hurry because many of them were in the middle of re-election campaigns. Whatever the reason, the General Assembly decided in its special session to adopt the budget to sacrifice transparency in favor of efficiency.

A quick review of the normal procedure will serve to clarify how different this year was. Normally, after both houses have considered the budget bill and rejected each other’s version, the bill is sent to a conference committee comprised of members from both houses. In a largely shrouded process, the conference committee eventually produces a report consisting of all the changes to the introduced budget bill that its members have agreed upon. (Comparisons to the Vatican College of Cardinals electing a new Pope are apt.) Continue reading →

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Posted in Budgets, General Assembly

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Virginia’s “Runaway” Budget Negotiators

Posted on September 14, 2023 by | 4 comments

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 →

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Posted in Budgets, Business and Economy, Economic development, Elections, Finance (government), General Assembly, Politics, Taxes

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How They Spent That Money

Posted on September 9, 2023 by | 108 comments

By Dick Hall-Sizemore

Steve Haner and I unofficially tag-team on the state budget. Fittingly, he covers the revenues (taxes) and I cover the spending.

Regarding the revenues available for spending, it is notable what was missing from the presentations by the Governor and Secretary of Finance in their appearances before the money committees last month. There was no mention of the $5.1 billion balance tirelessly touted by the Governor in his public calls for more tax reductions.

In the presentations and charts presented, it was difficult to discern what that unencumbered balance actually was. Using the data in the staff presentation to the Senate Finance and Appropriations Committee, one is able to tease out the $5.1 billion being touted by the Governor. First, there was $2.1 billion. This is hard to follow, but basically it was a balance designated in 2022 for “Additional Taxpayer Relief” and subsequently rolled into the unrestricted general fund balance. However, both the administration and the money committees were carrying it on their spreadsheets as an amount reserved for taxpayer relief and that is how the Comptroller identified it in her annual report to the Governor.  To that $2.1 billion the Governor added the additional $3.0 billion in general fund revenue projected over the official estimate.

That was a valid projection of the general fund balance at the end of FY 2023. However, as both Steve and I have pointed out several times on this blog, that was a gross amount. After deducting for the required deposits to the Rainy Day Fund and the Water Quality Improvement Fund, the appropriation in the “skinny” budget bill enacted last spring, and the amount required to fund the Pass Through Equity Tax previously enacted, the net general fund balance available at the end of FY 2023 was approximately $2.4 billion. Continue reading →

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Posted in Budgets, General Assembly

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Youngkin’s Partial Tax Wins are Still Impressive

Posted on September 7, 2023 by | 22 comments

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 →

22 Comments

Posted in Budgets, Business and Economy, General Assembly, Taxes

The Virginia State Budget and the Rising Costs of Registered Nurses

Posted on September 4, 2023 by | 7 comments

by James C. Sherlock

I was asked yesterday by a reader about the relationship between nursing homes, rising registered nurse salaries and the new Virginia budget agreement.

Good questions. Virginia’s workforce includes nearly 70,000 registered nurses.

The state pays its workers, but it also pays its Medicaid share for private sector nurses. Pay for private sector workers is based upon market conditions. The market wage for registered nurses nationwide increased dramatically during COVID.

Perhaps the only good thing to come out of that mess was that registered nurses, of whom Virginia has 11% fewer than demand calculated by the federal Health Resources and Services Administration, got very large pay and bonus raises, and the new wage points appear to have stuck.

If the laws of economics work here, that will over time increase the number of nurses if we can educate and train them in the required numbers.

The latest figures from the Bureau of Labor Statistics for all states show that the median wage for an RN in Virginia was $79,700 a year. In Northern Virginia portion of the D.C. metro area, the median was $92,800.  The underlying data are a couple of years old.

Wages and bonuses can vary a lot among Virginia hospitals, nursing homes, home health agencies, nursing school staff and government employees, and are higher or lower depending on specialty. The private sector offers $10,000 to  $20,000 signing bonuses paid out after the first year.

Employers of course must pay payroll taxes and other expenses related to employees, and thus their costs will generally exceed $100,000 per RN.

Virginia RNs are still underpaid compared to national figures. The mean annual wage for America’s 3 million registered nurses in May was $89,010 compared to Virginia’s $79,900.

The federal Centers for Medicare/Medicaid Services, aware of some of the questionable business models of bad actors in the nursing home industry, published last week a proposed rule to both increase the minimum number of RNs in nursing facilities and to require all nursing facilities to reveal every year how much of the Medicare and Medicaid payouts go to salaries and related expenses.

So, Medicare and Medicaid costs will go up yet again. Continue reading →

7 Comments

Posted in Budgets, Change Management, Federal, Finance (government), General Assembly, Governance, Government Oversight, Government workers and pensions, Health Care, Labor & workforce, Long Term Care and Nursing Homes, Medicaid, Regulation

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Which Virginia Taxes Have Grown and How Much

Posted on August 25, 2023 by | 39 comments

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 →

39 Comments

Posted in Budgets, Business and Economy, General Assembly, Taxes

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Virginia’s Balance Sheet is Embarrassingly Strong

Posted on August 24, 2023 by | 34 comments

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 →

34 Comments

Posted in Budgets, General Assembly, Taxes

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Virginia’s Schools Really Do Need More Money

Posted on August 22, 2023 by | 38 comments

by Suzanne Munson

Recent General Assembly debates about state budgets open a cornucopia of questions about the future of education in Virginia — charter schools, lab schools, vouchers, funding for religious schools? Now might be a good time to examine some background about public education in Virginia.

Thomas Jefferson proposed the state’s first legislation in support of universal education, for rich and poor alike, in 1779. He viewed pubic education as necessary for an informed, successful democratic republic: “If a nation expects to be ignorant and free, it expects what never was and never will be.”

As school funding involved tax dollars, well-to-do Virginia legislators ignored Jefferson’s appeal for decades. Meanwhile, our neighbors to the north were educating their populace. It would take a Civil War and its aftermath for this state to develop a nascent system of public education.

Today, Virginia’s school divisions across the board receive 14% less funding from the state than the 50-state average, equal to about $1,900 less per student. This is neither admirable nor sensible, if we are to have a successful economy, students trained for challenging work, and an informed electorate.
Continue reading →

38 Comments

Posted in Budgets, Business and Economy, Education (K-12), General Assembly

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Cruise Subsidy More Important Than Tax Relief?

Posted on August 20, 2023 by | 32 comments

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 →

32 Comments

Posted in Budgets, Business and Economy, General Assembly, Taxes

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Virginia’s New “The Stupid Party”

Posted on August 19, 2023 by | 44 comments

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 →

44 Comments

Posted in Budgets, Business and Economy, Elections, General Assembly, Politics, Taxes

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JLARC Report: More Than Just “Mo’ Money”

Posted on August 13, 2023 by | 48 comments

Photo credit: Va. Dept of Education

by Dick Hall-Sizemore

The Joint Legislative Audit and Review Commission (JLARC) released a major report last month on the Commonwealth’s K-12 funding formula. The responses were predictable.

On Bacon’s Rebellion, Jim Bacon dismissed the report as a cry for “mo’ money.” Democrats in the General Assembly seized upon the report and its findings as more ammunition in their fight against Governor Youngkin’s effort to cut taxes further.

It is true that the report concludes that the state needs to provide more funding for K-12. However, the report is much more than that. In the report, JLARC documents serious deficiencies in the formula that is used to calculate funding for K-12. It then proposes some significant changes that could be made that would improve the funding system. The report deserves a deeper look on this blog than it has received. Continue reading →

48 Comments

Posted in Budgets, Education (K-12), Uncategorized

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Paid In Full, State Needs to Give Us Our Change

Posted on August 9, 2023 by | 14 comments

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 →

14 Comments

Posted in Budgets, General Assembly, Taxes

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Restoring Sales Tax Holiday is Not Tax Relief

Posted on August 4, 2023 by | 36 comments

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 →

36 Comments

Posted in Budgets, Business and Economy, General Assembly, Taxes

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