By Dick Hall-Sizemore
Jim Bacon mentioned in an earlier post that the state’s revenues for April were $700 million less than in April of last year. I was surprised that there were no cries of outrage from readers and dire warnings of the state running a budget deficit. I was also surprised that I did not detect any signs of panic on the part of the administration.
After I dug into the details and thought about them for a while, I realized that, for reasons to be set out later, the state is in position to finish this fiscal year in the black. It is next year that has the administration worried.
Total general fund revenues for April 2020 were 26% lower than those for April 2019, leading to the $700 million decrease. Although total General Fund (GF) revenue year-to-date was higher (1.4%) than the comparable period in FY 2019, 3.1% growth for the year is needed to meet the forecast. In summary, the state revenue growth rate through April was less than half what was needed to meet the forecast. Continue reading
The green areas are regional transportation districts where additional fuel taxes are already being collected, 7.6 cents per gallon on gasoline and 7.7 cents per gallon on diesel. Effective July 1 those regional fuel taxes will be imposed in all the other Virginia localities. In combination with the 5 cent per gallon increase in the statewide gasoline tax, the total tax on fuel goes to 28.8 cents on gasoline and 27.9 cents on diesel.
By Steve Haner
First published this morning by the Thomas Jefferson Institute for Public Policy.
The 2020 General Assembly, with its new progressive Democratic majority, passed a host of changes in Virginia tax laws that will begin to hit individuals and businesses in a few weeks on July 1. Because of the COVID-19 economic shutdown, a few amendments were made to the implementation schedule during the reconvened session on April 22, but no tax increase was repealed.
This is a follow up on an earlier report on the sixteen tax bills that passed the regular session. Most are taxes will be buried almost invisibly in various transactions, and their phased imposition will also keep many taxpayers from noticing them.
July 1, 2020
The statewide tax on gasoline increases from 16.2 cents per gallon to 21.2 cents per gallon (a 31% increase) and is no longer tied going forward to the rise or fall of wholesale cost. Continue reading
By Steve Haner
The latest complaint against the Northam Administration’s response to the COVID-19 pandemic is failing to provide adequate state tax relief. The complaint comes from the Tax Foundation and surfaced in a news report in Wednesday’s Fredericksburg Free Lance-Star. The Richmond Times-Dispatch has now chimed in with an editorial.
Apparently most other states have matched the new (and temporary) federal income tax filing deadline of July 15 rather than April 15. Virginia has delayed the deadline for paying any taxes still owed for 2019 from May 1 to June 1. But the 2019 income tax returns are still due on May 1, and the common complaint is that since Virginia taxes are based on your federal adjusted gross income, you need to know your federal AGI figure to file.
“Virginia has done the least to help taxpayers with delayed filings or delayed payments than any other state,” said Jared Walczak, director of state tax policy with the Tax Foundation.
Walczak said although Virginia requires that state tax returns be filed by May 1, the payment deadline has been extended until June 1. But even with an extension on tax payments, Walczak said interest starts to accrue on the amount you owe.
“Virginia is the only state in the nation that is doing that,” said Walczak. “Everywhere else, there is at least some relief on both filing and payment deadlines.”
Statue of Gov. Harry F. Byrd on the state capitol grounds.
By Peter Galuszka
Right-wingers in Virginia have been apoplectic for months that Democrats finally captured the General Assembly after years of Republican control.
They also were enraged that the legislature this winter passed a number of reforms that would draw Virginia into the 21st Century such raising the minimum wage, boosting collective bargaining, tightening rules on carbon pollution and raising taxes for cigarettes, a deadly product.
Now such conservatives are using the COVID-19 pandemic as an excuse to throttle or delay such needed reforms. They have banded into groups such as the Coalition fort a Strong Virginia Economy. They have used the Virginia Municipal League’s complaints against the reforms, claiming they cost too much, as a way to derail new measures.
According to the left-leaning blog site Blue Virginia, one of the more extreme advocates for scrambling changes is Dave LaRock, a far-right Republican delegate from Loudoun County. A pronounced gay-basher, LaRock wants to squelch all of the reforms made by the more progressive General Assembly. Continue reading
Posted in Blogs and blog administration, Budgets, Business and Economy, Commentary, Consumer protection, Culture wars, Demographics, Economic development, Energy, Entitlements, Environment, Federal, Finance (government), General Assembly, Governance, Government Oversight, Gun rights, Health Care, Individual rights, Infrastructure, Labor & workforce, Media, Money in politics, News, Taxes, Transparency
Tagged Peter Galuszka
John Maynard Keynes
By Peter Galuszka
John Maynard Keynes, the British economist, advocated government spending and monetary intervention as suitable for modern economies.
When I was a student at a liberal college in New England in the early 1970s, we were taught that Keynes very much had the right idea. As evidence, we had the Great Society programs of Lyndon B. Johnson and, strangely, the Vietnam War. They all relied on vast amounts of deficit public spending.
Since then, free-market types came into favorable light and it all became the magic of the market, little regulation and other panaceas.
According to whom you read, pro-capitalism economist Milton Friedman admitted the necessity of Keynes’ thinking by stating, “We’re all Keynesians now.” President Richard Nixon, a Republican, is also credited with the quote when he took the U.S. off the gold standard.
The phrase is taking on increasing relevance with the COVID-19 pandemic. Virginia is no exception. Continue reading
By Dick Hall-Sizemore
As a diversion from the coronavirus story, as well as an effort to give you a little more variety, the following is my previously promised summary of the General Assembly’s changes to the capital budget. (It was only a little over two weeks ago that the legislature adjourned, but it seems much longer.)
The actions of the General Assembly were both surprising and not surprising. The surprise was that, for the first time in many years, maybe ever, the legislature ended up authorizing fewer capital projects and less debt than the Governor had recommended. The non-surprise was the winners and losers. Continue reading
In answer to some calls on this blog for immediate adjustments to the state budget, my response was: Don’t panic. There is a process already in place to deal with such a situation. Now, there is even less reason to panic. It is reported that the Commonwealth will receive at least $1.5 billion from the federal rescue package that will soon be enacted.
Just as the Obama stimulus package (along with shortchanging the state pension system) helped Bob McDonnell balance the budget in the middle of the financial crisis without a tax increase, this new rescue or stimulus package should help Governor Northam weather the economic storm caused by the coronavirus. Continue reading
My first post in two weeks. What the heck, I should join the parade and give a bunch of advice to our beleaguered Governor which he is likely to ignore. This first appeared today in the Fredericksburg Free Lance-Star. It has one of those annoying “take a survey” paywalls, but in this case asks a question we should all answer. Try it.
By Steve Haner
The assumptions underlying the most contentious debates of the 2020 General Assembly session are gone. Sixty days ago, activists were arguing that this was a rising economy and state government should mandate raising workers to a higher level.
This is a now sinking economy, and the General Assembly’s actions have piled bricks on the life rafts that workers in the commonwealth will need to survive.
The priority now is containing the spread of this respiratory virus, but soon it becomes reviving an economy that has come to a near stop. Nobody knows when or where unemployment will peak, but this is starting to look more like 1929 than 2009.
Gov. Ralph Northam’s lasting legacy will not be his response to the virus, but the speed of the following recovery. Continue reading
By DJ Rippert
And then there were two. Today, Elizabeth Warren announced that she will withdraw from the presidential race. That leaves Joe Biden, Bernie Sanders and Tulsi Gabbard (yes, she’s still running) as the remaining candidates for the Democratic nomination. Given that Tulsi Gabbard has exactly one delegate (from American Samoa where she was born), the odds of her prevailing are so low that the race can safely be considered a two- man contest. Two weeks ago Joe Biden’s campaign seemed deader than disco. Then came Super Tuesday. Now he’s the front runner.
It seems worthwhile, then, to consider how Biden’s announced policies would affect Virginia if he were elected president this November. Politico keeps an updated list of the candidates’ positions on the issues which you can see here. Politico records the candidates’ positions using fifteen categories. This blog post examines the first five categories — criminal justice, economy (excluding taxes which is a separate category), education, elections and energy (including the environment and climate change). The remaining ten categories will be examined in future articles.
Posted in Business and Economy, Commentary, Courts and law, Crime and corrections, Education (K-12), Elections, Federal, Finance (government), Money in politics, Politics, Taxes
Tagged DJ Rippert, Don Rippert, Joe Biden
Feel-good story of the day. Musical superstar Pharrell Williams, a Virginia Beach native, is collaborating with the city’s Convention & Visitors Bureau to create two 60-second commercials, featuring his soon-to-be-released song “Virginia,” promoting Virginia Beach as a city open to tourists. Pharrell contacted city officials after the mass-shooting last year, asking how he could help his home town. One of the commercials, reports the Virginian-Pilot, will show the work that takes place in early-morning hours to prepare for visitors: a man cleaning kayaks to rent, a chef chopping vegetables, city workers grooming sand on the beach, hotel staff fluffing pillows. Williams composed the hit song, “Happy,” which went wildly viral as hundreds of groups shot videos of themselves lip syncing to the song.
Good news from Petersburg. After digging itself out of the worst fiscal meltown in modern Virginia history, the City of Petersburg is reporting its first positive fund balance in four years. The city’s “unassigned fund balance,” not earmarked for a specific portion of the General Fund, came in at $2.8 million in Fiscal 2018, reports the Progress-Index. The city has set a goal of increasing the unassigned balance to $7.6 million. Petersburg was no more reckless than any number of other cities across the United States, but Virginia is less forgiving of fiscal incompetence. As a consequence, the poor, largely African-American municipality was forced to make hard choices and enact brutal spending cuts. Now it is emerging more financially disciplined than before. If Petersburg can straighten itself out, so can other deadbeat states and municipalities. If Virginians demanded that Petersburg make sacrifices, we should expect the same of others, too. Puerto Rico, I’m talking to you! Chicago, I’m talking to you!
When “multicultural” means “nonwhite-cultural”… Last week video surfaced of a black female student delivering a “public service announcement” at UVa’s new “Multicultural Student Center.” Apparently, the “multi” part did not include white culture. There were “just too many white people,” the young woman informed the unwelcome visitors. The center, she said, was “a space for people of color.” To its credit, the University administration issued a statement affirming that the center is “open to all members of the University community.” But it appears that a lot of students (including many white students) agree with the young woman. In interviews published on The College Fix, many students agreed with the proposition that minorities need a “safe space” free from whites.