Virginia and US employment fluctuations since 2004, showing the dip in 2009-10 and plummet in the last four months. Source VEC. Click for larger view.
By Steve Haner
By the end of this amazing year, almost 1.5 million Virginians may have filed claims for unemployment insurance payments, leaving the state’s once-record unemployment trust fund balance of $1.5 billion reduced to $750 million in the red, legislators were told this morning.
That $2.25 billion swing is due to $2.6 billion spent out of the state fund, to cover basic unemployment benefits. To date, the federal government has supplemented that with another $6.3 billion paid to Virginian under special COVID-19 related benefits, which do not come out of the state trust account. Continue reading
By Peter Galuszka
FYI, here’s a piece I did for Style Weekly about Richmond’s new p0lice chief, the third in about a month, and his interpretation on the problems of law enforcement in this period of defunding.
Posted in Budgets, Courts and law, Crime , corrections and law enforcement, Finance (government), Governance, Government Oversight, Individual rights, Politics, Public safety & health, Race and race relations
By Dick Hall-Sizemore
The state’s May revenue report has been released today. As one would have expected, the May 2020 general fund (GF) revenues were down significantly from May 2019 and the year-to-date GF revenues are running behind the annual forecast.
However, on the somewhat bright side, the administration is now saying that it expects the decline in GF revenue for the fiscal year to be less than previously predicted. In last month’s report, Secretary of Finance Aubrey Layne predicted that the shortfall in FY 2020 GF revenue would be $1 billion. Now, he anticipates that “fiscal year 2020 revenue collections will be less than $ 1 billion below the official forecast.” Layne told the Richmond Times-Dispatch that total GF revenues for the year were down about $800 million and he expected that the state would make some of that up in June. He summarized by saying, “We’re going to end the fiscal year in a better position than being $1 billion down. I don’t know how much it’s going to be, but the good news is what we have projected and told people — we’re going to be well within that.” Continue reading
By DJ Rippert
Unintended consequences. Newspapers, websites and Bacon’s Rebellion have been full of articles describing and debating the COVID-19 pandemic and the police killing of George Floyd with the attendant protests. First-order consequences of these events have been widely discussed. However, as we enter into the “new normal” a number of secondary and tertiary questions arise. One such question pertains to the legalization of recreational marijuana in Virginia. My opinion is that both the COVID-19 pandemic’s economic fallout and the new sense of urgency around racial justice should compel our state government to accelerate the legalization of adult use marijuana.
The COVID19 lockdown recession. The sudden stop to Virginia’s economy has resulted in predictable fiscal turmoil. While one can debate whether the lockdown was too restrictive, not sufficiently restrictive, too long or too short there can be no debate that closing large parts of the economy has caused deep financial issues. The US economy is in recession. Some will say that Virginia will be insulated from the worst of that recession by the flow of federal dollars through the state. To that I’d reply – “don’t be naive, Nancy” … stories of the impact on small businesses are being reported across the state. It should be obvious to everybody that Virginia faces a fiscal winter even if there is no second wave of Coronavirus this actual winter. Continue reading
Robert Bobb, of the Robert Bobb Group, functioned as Petersburg’s de facto CFO for a year or more. He was tough, but he got the city’s books straightened out.
by James A. Bacon
Two weeks ago, the U.S. House of Representatives passed a $3 trillion coronavirus-relief bill that would direct nearly $1 trillion to state, local and tribal governments. This massive bail-out would come on top of massive assistance to states and localities in previous legislation: $150 for a Coronavirus Relief Fund, $30 billion for an Education Stabilization Fund, $45 billion for the disaster Relief Fund, $25 billion for public transit systems, an increase in the federal government share of Medicaid spending, and billions more for miscellaneous programs. Also the Federal Reserve Bank has set up a $500 billion program to facilitate short-term state and local borrowing.
The ball is now in the U.S. Senate’s court. What, if anything, will the Senate propose in the way of a second wave of fiscal assistance? Judging from their press releases, Virginia Senators Mark Warner and Tim Kaine have so far refrained from committing themselves to a Pelosi-style bail-out of the states. Their statements have focused on narrow-bore initiatives for water improvement projects, National Guard benefits, and a restaurant meals program for Americans struggling with food security.
Sooner or later, however, they may be called upon to either support or oppose a second-wave bailout. They will receive intense pressure from their Democratic Party colleagues representing the states — Illinois, New Jersey, New York, Connecticut — in most desperate need of fiscal rescue. When they do so, I hope that that the two former governors will remember the hard choices they made to keep Virginia’s fiscal house in order, and, similarly, how the McAuliffe administration forced the City of Petersburg, when faced with fiscal collapse, to make hard, hard choices to put its finances in order. Continue reading
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, 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, 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