Category Archives: General Assembly

Only Part of the Gas Tax Would Be Suspended

by Steve Haner

The gas tax in Virginia today is 33.8 cents per gallon and the diesel tax is 34.7 cents per gallon.  The fresh proposal from Governor Glenn Youngkin (R) for a 90-day suspension of those taxes does not eliminate Virginia’s full fuel tax bite.  The oft-ignored wholesale tax will remain while only the retail tax goes away.

Bacon’s Rebellion has plowed this ground before.  The Division of Motor Vehicles’ posted information on taxes remains intentionally misleading, listing the retail taxes in one place and mentioning the wholesale taxes somewhere else.   These taxes are also set up by different sections of the Code of Virginia.  Youngkin’s proposal would amend only one of those Code sections. Continue reading

The Continuing Transformation of Virginia Politics

by Dick Hall-Sizemore

Toscano, David.  Bellwether:  Virginia’s Political Transformation, 2006-2020.  Lanham:  Hamilton Books, 2022

In this book, David Toscano, whose prior work was Fighting Political Gridlock: How States Shape Our Nation and Our Lives (2021), turns his focus on Virginia.  The author is a former Democratic member of the Virginia House of Delegates (2006-2020) from Charlottesville and served as the House Minority Leader from 2011 to 2018.

The book can be viewed from several perspectives.  At the highest level, it is an analysis of the changes in Virginia’s demographics and corresponding changes in its electoral politics in the first two decades of this century.  On another level, it is partly a political memoir.  Finally, it is an insider’s account of the legislative personalities and process in Virginia.

It needs to be said up front that this is not a nonpartisan account.  Toscano is a liberal Democrat and he does not try to disguise that fact.  He revels in the expansion of Medicaid, Democrats taking control of the House, and the legislation enacted in the 2020 and 2021 Sessions.  However, he does not demonize Republicans.  His attitude is that Republicans’ positions are legitimate and sincerely held, but generally wrong-headed. Continue reading

You Just Paid More RGGI Tax, Virginians

Six RGGI auctions have reaped Virginia $378 million.

by Steve Haner

Last week Virginia collected another $76 million in carbon tax dollars through the ongoing Regional Greenhouse Gas Initiative allowance auction. That was the sixth such sale since Virginia joined RGGI, and the state’s total tax take is now $378 million in 18 months.

Do not for one minute allow yourself to be fooled into thinking this money is not coming out of the pockets of Virginia’s citizens or businesses. Do not fall for the ploy Dominion Energy Virginia is attempting by claiming it will charge it off to “base rates.” The pea is still under your walnut shell.  Continue reading

The Inner Circle Shrinks

Sen. Janet Howell (D-Fairfax), chair of Senate Finance and Del. Barry Knight (R-Virginia Beach), chair of House Appropriations. Photo credit: Richmond Times Dispatch

by Dick Hall-Sizemore

In recent years, 13 or 14 Virginia delegates and senators have held extraordinary power and have been the envy of their colleagues. (The total number and the size of the delegation from each house varied over the years.)

They were the conferees on the budget bill and they had the power to make the final decisions on what would be in the budget bill. Their budget report could not be amended on the floor. It was an up or down vote on the whole report. It was inconceivable that either house would reject a budget conference report.

This year was different. There were still 14 conferees, but, from all reports, most did not participate in developing the budget conference report. It seems that only three members were the architects: Del. Barry Knight (R-Virginia Beach), chair of the House Appropriations Committee; Sen. Janet Howell (D-Fairfax), chair of the Senate Finance Committee; and Sen. George Barker (D-Fairfax). Not mentioned in the press, but surely instrumental in putting the conference amendments together, were the staffs of the two committees. Continue reading

School Choice Tax Credits Reduced in New Budget

by Steve Haner

The famous phrase about no one’s life, liberty or property being safe while the legislature sits probably arose after somebody got burned by an out-of-control conference committee. It just happened again to Virginia’s private schools, who had a popular scholarship tax credit program chopped Wednesday.

The Education Improvement Scholarship Tax Credit (EISTC) is available for donations to support free or reduced tuition for the lowest income Virginia students, those who otherwise would never have a way into a private school. It dates back to Governor Bob McDonnell (R).  Continue reading

Youngkin Signs Bill to Limit His Own Power

by Kerry Dougherty

I was at dinner earlier this week with a cousin from out-of-state. We passed a pleasant night without talking politics, but he did want to know what I liked about Gov. Glenn Youngkin.

Where to start?

I pointed out that the new governor of Virginia is serious about getting the commonwealth’s public schools back on track to excellence after his predecessor’s prolonged school closures left many kids hopelessly behind.

I added that Virginians no longer have to dread their governor’s Thursday press conferences, wondering which civil liberties would be yanked away at the whim of a little potentate in Richmond.

(Anyone else remember when Gov. Ralph Northam ordered everyone in their houses by 12 because his parents believed that “nothing good happen after midnight”? Bizarre as it seems, 8.5 million Virginians were forced for a time to live under Northam family rules like naughty teenagers.)

Now Youngkin’s done something Northam never would have done: He signed a bill limiting his own executive powers. Continue reading

Sales Tax On Groceries With Us Through Christmas

The food tax will still be with us for Thanksgiving and Christmas?

by Steve Haner

Everybody eats. With all the money sloshing around the Virginia treasury for the General Assembly to play with, it is hard to see the logic in continuing the state sales tax on groceries an additional six months, delaying that particular tax cut until January 1.

The inflation on everything at the grocery store means more tax revenue is coming in from that source than was expected when the initial budget was prepared last year. If they had allowed the tax cut effective July 1 rather than January 1, inflation on other items people buy (restaurant meals, furniture, electronics, clothing, non-food items) would protect the state’s spending in full (necessities and niceties.)  Continue reading

Home Price Volatility and Virginia Property Taxes

Case-Schiller Home Price Index – National

by James C. Sherlock

Housing prices have more than doubled since 2012, reflecting shortages of supply and the resulting speculation. The increasing slope of those curves above is not comforting.

Prices have soared over 20% in a year. Mortgage rates are up. What could possibly happen next? Most can figure that out.

But this article is about the effects on local government property taxes of what most predict will be extreme volatility in the housing market going forward.

How are Virginia real property taxes adjusted to mitigate the effects on both property owner tax bills and government receipts in this boom and very likely bust cycle?

We’ll look at the law. Continue reading

Progress: Standard Deduction Up 166% since 2018

by Steve Haner

First published today by the Thomas Jefferson Institute for Public Policy.

Do not be surprised if, by the time the next Virginia General Assembly elections roll around, the Democrats who are now complaining about the level of tax relief in the pending budget compromise switch positions, and campaign as champions of the deal.

The two key elements – a substantial increase in the standard deduction for income tax filers and a cut in sales and use tax on groceries for everybody – are ideas with long and bipartisan histories. Only the reluctance of previous governors and General Assemblies to part with the revenue stood in their way. Both are logical, populist reforms many Democrats had also championed in the past.

The Thomas Jefferson Institute has long been an advocate for a higher standard deduction, and the proposed 78% increase from $4,500 to $8,000 per person (up to $16,000 for a couple) falls just short of the recommended 100% increase.  Remember, as recently as tax year 2018 it was only $3,000 (or $6,000 per couple) and raising it in 2019 was also a major recommendation of ours that was adopted.

This new amount will apply to this tax year. So in two steps over three years, the standard deduction has risen by $10,000 for a working couple. That 166% increase saves most of them $575 per year. Continue reading

Who Needs the General Assembly? Let the Budget Conferees Do It.

Sen. Janet Howell (D-Fairfax), chair of Senate Finance and Del. Barry Knight (R-Virginia Beach), chair of House Appropriations. Photo credit: Richmond Times Dispatch

by Dick Hall-Sizemore

Although legislating through the budget, a practice that used to be frowned upon, is not new, this year’s budget conferees are taking the practice to a new dimension.

The amendments released by the budget conferees include the following new provisions in the “General Provisions” section. In most cases, the Code of Virginia is amended. The remaining cases involve just language in the Appropriation Act.

  1. Changes to the tax code. These have become a standard practice.  This year there are provisions to increase the standard deduction, eliminate the state portion of the sales tax on groceries, increase income tax credits for military benefits, and make significant changes to the statutory  language regarding housing opportunity credits.
  2. University housing. To the extent that institutions of higher education operate student housing during breaks, requires them to allow eligible foster students to stay in them free of charge.
  3. Casino referendum. Prevents the city of Richmond from having a second referendum on casinos until November 2023.
  4. Private school. Exempts a private school from licensing requirements.  (The school was previously exempted until repeal of the applicable statutory provision in 2020.)
  5. Games of skill. Changes the definition of games of skill.
  6. Marijuana and hemp. Establishes a criminal penalty for possession of four ounces to one pound of marijuana. Changes requirements for labeling of products including industrial hemp. This is the first time that I remember the budget bill being used to amend the criminal code and impose a new criminal penalty.

Continue reading

A Gun Owner’s Suggestion for Virginia Gun Laws

By James C. Sherlock

I was a career military man.

I am a conservative and a gun owner. As a younger man, I won competitive awards for marksmanship with both rifle and pistol.

I own a semi-automatic Glock for home protection.  I train regularly and at almost 77 can still hit what I aim at.

With that introduction, I have a couple of suggestions for gun legislation in Virginia that I hope will draw condemnation from both the left and the right so that I know I have it roughly right.

I have four criteria for firearms legislation:

  • changes that can matter to the safety of children and law enforcement officers;
  • changes that can deter criminals from use of a firearm in the commission of a crime;
  • changes that do not disadvantage the average citizen’s possession and use of firearms; and
  • changes that can pass Second Amendment review in federal court.

Those are, as a group, difficult needles to thread simultaneously.  They should be.

This article involves semi-automatic long guns – rifles and shotguns.

Continue reading

Medicaid, Public Health and Chronic Disease Management

UVa Hospital

by James C. Sherlock

From the CDC:

Chronic diseases have significant health and economic costs in the United States. Preventing chronic diseases, or managing symptoms when prevention is not possible, can reduce these costs.

Virginia pays a great deal of money every year to contractors who manage the care of its Medicaid population.

It is a hard job, but even though the challenges are tough, it has appeared to me for a long time that we are not getting our money’s worth from $18 billion annually in Medicaid payments for the populations managed by these contractors.

A white paper, “Prevent Costly Chronic Disease Through Member Engagement” caught my eye as the basis for a follow up to my earlier report on public health and Medicaid managed care in Petersburg.

This is that update. Continue reading

Fix One Thing — School Physical and Electronic Security

by James C. Sherlock

I offer an apolitical suggestion. We know how to begin to fix school security.

Do it.

Step 1. Every school division has a security instruction. How many of them monitor whether that guidance is being followed? I will let them answer that.

Step 2. The more complete solution is deployment of integrated combinations of physical and electronic security systems. System integrators who specialize in school security can help with requirements definition for any facility and tailor expandable solutions to budgets. That is their business and they are good at it.

As an example of what is possible, see ADT’s integrated intrusion security and fire detection and alarm system offerings for K-12 schools.

When people say “do something”, this is the kind of solution on which all of us can agree. Do it. Continue reading

A Budget Deal Emerges

Sen. Janet Howell (D-Fairfax), chair of Senate Finance and Del. Barry Knight (R-Virginia Beach), chair of House Appropriations. Photo credit: Richmond Times Dispatch

by Dick Hall-Sizemore

The Richmond Times-Dispatch reports there is an agreement on the state budget. There have been hints in the news about it all week, with the General Assembly announcing that it would come back to Richmond June 1 to take up various measures. All the details will not be available until late Sunday or Monday, but the chairs of the two money committees have released the highlights.

I will defer to our tax expert, Steve Haner, to discuss the revenue aspects of the deal. It looks to be the compromise that he has said was on the table all along—some increase in the standard deduction (but not entirely what the Governor proposed) along with a refundable tax credit.

I want to focus on one surprise in the package that represents two major changes in state policy. The proposed deal includes $320 million in general fund appropriations this year and an additional $150 million in the future, contingent on revenue, to help fund the expansion of the “I-64 gap” between Bottoms Bridge near the Henrico/New Kent border and James City County. This is the project I wrote about earlier and, surprisingly to me, engendered a lot of comments. Continue reading

What the Wind Project Costs You and Who Pays

The annual revenue required from Virginia customers to finance Dominion Energy Virginia’s offshore wind installation. It peaks at about $800 million in 2027, driving the amount to be collected on monthly bills. Source: SCC Testimony. Click for larger view.

by Steve Haner

If the project goes as planned, the consumer cost for Dominion Energy Virginia’s offshore wind installation will rapidly rise to a peak in 2027 and then descend annually over the following 20 years. If it produces power for 30 years, in the final phase the revenue related to the project will exceed the remaining capital costs.

What is this going to cost Dominion’s captive ratepayers?  There is also a related but often ignored question: which of those customers did the Virginia General Assembly exempt from those costs, effectively bumping up the price to those not exempt? Continue reading