Category Archives: Taxes

Taxing the Money That Saved Virginia Jobs

By Steve Haner

Concern that Virginia is seeking to tax federal pandemic relief grants to Virginia businesses – grants which kept Virginians employed — is putting a normally routine tax administration bill in jeopardy.

The House Finance Committee on Monday approved the annual bill to bring Virginia tax law into conformity with the Internal Revenue Code effective December 31, 2020. But eight of 22 committee members voted no, and a similar division in the full House would kill the bill. The bill needs to go into effect immediately to be reflected on tax returns now being prepared, but that requires an 80% super majority.

The Thomas Jefferson Institute for Public Policy, joined by the National Federation of Independent Business and the Virginia Society of Certified Public Accounts, opposed one section of the bill in committee testimony (watch with the link). While Congress told businesses with PPP loans that they can deduct the wages and salaries they maintained to earn forgiveness of the loans, Virginia wants to disallow those costs as a deduction.

That effectively taxes the forgiven loan. Consider the following simple example. Continue reading

Northam Again Targets Virginia Business Taxpayers

Finance Secretary Aubrey Layne. Photo credit: Daily News.

By Steve Haner

Washington giveth and Richmond taketh away. Once again, the Northam Administration wants Virginia to ignore business income tax changes made at the federal level because they would lower state revenue.

Governor Ralph Northam’s finance secretary was in front of the House Appropriations Committee Friday explaining the reasoning and complaining that new federal rules represent a double tax benefit for the affected businesses. “Not only is it expensive, it’s bad tax policy and it’s bad public policy,” Aubrey Layne, a certified public accountant, said at one point in the meeting.  Continue reading

Virginia’s COVID Federal Grants Now At $5.8 Billion

Click for larger view.

By Steve Haner

Having received and mostly spent $3.1 billion in federal COVID-19 “relief” funding already, Virginia’s state and local governments now will have another $2.7 billion in the fourth and latest (but likely not last) federal spending bill tied to the ongoing pandemic and unemployment crisis.

The word relief is in apostrophes because Virginia’s state budget, as previously reported, is surprisingly strong in this time of economic stress, strong enough to pour dollars back into the state’s reserve funds Other states are in much worse shape. But just as with the individual COVID payments, need is not a factor. The idea is to stimulate personal – and government – spending across the board.  Continue reading

CO2 Taxes, Gas Rationing Poll Badly With Voters

By Steve Haner

The Transportation and Climate Initiative plan to tax and ration motor fuels suffered a major setback just before Christmas, when eight of the eleven states considering it decided not to move forward in 2021. Less than two weeks earlier, advocates had released polling that claimed to show overwhelming popularity for the idea.

The well-funded supporters conducted a massive 60-question survey of 3,800 registered voters, including enough Virginians that a Virginia-only breakout had some credibility. Virginians contacted supported Virginia’s membership in the CO2 reduction scheme by three to one. Yet Virginia’s Governor Ralph Northam was one of those who did not sign on a few days later.

Perhaps he noticed how biased the key question was, including this: “Under TCI, states will cap carbon pollution from the transportation sector and require gasoline companies to pay for the carbon pollution produced by the fuel they sell by purchasing annual allowances.” Respondents were not told that the “gasoline companies” could be expected to pass those costs along to them.

When you tell voters a bit more about the proposal, including that they will have to pay, support rapidly disappears, although not completely.  Continue reading

Tufts Study Projects Major TCI Carbon Taxes

Abandoned Gas

An abandoned gasoline station in North Carolina that failed after that state raised its fuel taxes substantially higher than Virginia’s.

By Steve Haner

Monday the organizers of the Transportation and Climate Initiative, a carbon tax and rationing regime for Virginia motor fuels, will be announcing details of the underlying interstate compact, according to media reports.

The media in Virginia has been disinterested in the issue, but the debate is raging in New England. The Boston Globe set the stage with a story last week. While 12 states and the District of Columbia have been involved in the planning, there remains some suspense over which states will press forward. New Hampshire is already out, and some other governors have expressed concerns.  Continue reading

Northam Would Save Most of Virginia’s New Cash

Source: Virginia DPB. Well, $1.9B is 8% of one year’s general fund revenue, but a fairly small cushion in a $141B two-year total budget. The blue lines represent the official Revenue Stabilization “Rainy Day” Fund and the orange lines are a cash reserve that represents legislative spending discipline.  (Who picked UVA colors?)

By Steve Haner

Other states are in trouble these days, but Virginia suddenly has about $1.5 billion in free cash flow to use over the next 18 months, Governor Ralph Northam announced Wednesday. About half of it ($750 million) will be placed into reserves or used to improve the financial health of the Virginia Retirement System.

The COVID-19 recession has certainly had an impact, reducing state spending, and adding unanticipated expenses. But the economic restrictions imposed here have not equaled those in other states, and the federal government has continued its spending on services and contracts in Virginia.

A series of pre-pandemic tax increases have also cushioned the blow, along with $3.3 billion sent to the state for COVID-related expenses.  Continue reading

EPA: PM 2.5 At Current Levels is No Threat

Source: EPA Website.  Click to expand.

By Steve Haner

“Everything is a poison, nothing is a poison. It is the dose that makes the poison” – Paracelsus (1493-1541 AD)

A micron is a tiny thing. A grain of beach sand is about 90 microns, and a human hair 50 to 70 microns in diameter. In the coming session of the General Assembly, you are about to hear that micron-sized particles are sickening and killing you. Do not believe it.    Continue reading

Does a $9 Billion Carbon Tax Get Your Attention?

by Steve Haner

The 2021 General Assembly is now six weeks away, with the holidays in between.  We know no more about the coming Northam Administration proposal to impose a carbon tax and rationing scheme on our motor fuels than we did months ago. Keeping you uninformed may be part of the plan.

All we have is the Transportation and Climate Initiative organization’s own data and modeling, which are quite extensive.

The initial added tax per gallon of gasoline in Virginia could range from 17.5 cents to 28 cents per gallon, depending on which of the 25% reduction scenarios the still-unseen TCI memorandum of understanding uses. By 2032 the tax could range between 36 cents and 57 cents per gallon, TCI projects.  Continue reading

Carbon Tax Advocates Who Lost in November

From the Collins-Gideon contest in Maine this year, won by Senator Susan Collins.

Editor’s Note:  A cautionary tale as the 2021 Virginia General Assembly prepares to debate another major carbon tax? 

By Paul D. Craney

One of the most overlooked stories on Election Day was the defeat of pro-carbon tax politicians across the nation and here in New England.

The most notable carbon tax proponent to seek office in New England was Sara Gideon, the speaker of the Maine House who was challenging moderate incumbent Republican U.S. Sen. Susan Collins. As speaker, Gideon in 2019 supported the imposition of a carbon tax that’s end effect on fuel prices bore a striking similarity to the Transportation and Climate Initiative, or TCI, a regional effort to place a price on the carbon in vehicle fuels. The carbon tax proposal went nowhere in Maine and Gideon did not embrace it during her run for U.S. Senate.  Continue reading

Medicaid Enrollment Reaches 1.5 Million Virginians

Annual year-over-year growth of Virginia Medicaid spending and enrollment. Eligibility expanded and provider reimbursements increased at the end of 2018. Source: Senate Finance Committee presentation. Click to view. 

By Steve Haner

Just under two years into Virginia’s Medicaid expansion, and less than one year into a pandemic-sparked economic crisis, enrollment in the program is now about 1.5 million Virginians. Enrollment has grown more than 25% in less than two years and spending more than 30%.

The financial impact on state taxpayers has been blunted by a COVID-19 related boost in the federal share of the program costs, which is expected to continue well into 2021. But the federal legislation providing the money also prohibited the state from removing recipients from the program unless they actually moved away.  Continue reading

TCI: Taxing the Poor to Benefit the Rich

New Jersey environmental justice advocate Maria Lopez-Nunez, lower left, speaks with organizers of the Transportation and Climate Initiative on September 29. Hear her here.

By Steve Haner

“I think TCI is just taxing poor people so that we can subsidize rich people’s electric cars.” 

So said New Jersey’s Maria Lopez-Nuñez, Deputy Director, Organizing and Advocacy for the Ironbound Community Corporation. She was speaking during an online seminar September 29 organized by Transportation and Climate Initiative advocates.

That particular comment can be heard at about 3:10 into this recording of her speech. The full meeting is recorded here, and her remarks start at about 1hour and 43 minutes in. Listen to her whole speech if you can. Listen to those that follow and you will learn she was not alone.

Lopez-Nunez is dead on correct that TCI imposes a major and very regressive tax to deliver minor reductions in CO2 emissions, and that moving people into electric cars merely moves the source of CO2 emissions from the roads to the power plants.

Run the projected CO2 emissions savings from TCI through the climate change models at the heart of this whole worldwide debate and the result is infinitesimal changes in the feared future temperature increases. Selling this as saving the planet is not credible, so the push is on to find a new rationale. The effort to make that “environmental justice” by targeting the tax money to their causes is not being well received.

Continue reading

One Governor Blinks on Carbon Tax. Will Northam?

By Steve Haner

The governor of Massachusetts stated yesterday that he and other unnamed governors in Transportation and Climate Initiative states are reconsidering the new carbon tax. Is our Governor Ralph Northam among them? He has a news conference this afternoon and somebody should ask.

From a post late yesterday at the Boston Herald:

“Gov. Charlie Baker said governors are re-evaluating support of a controversial carbon tax designed to limit greenhouse gas emissions as advocates renew calls for its passage.

“We’re living at a point in time right now that’s dramatically different than the point in time we were living in when people’s expectations about miles traveled and all the rest were a lot different,” Baker said Tuesday during a press conference at the State House.

Continue reading

RGGI Carbon Tax Hits Dominion Bills Next Summer

By Steve Haner

Beginning August 1 of next year, Dominion Energy Virginia proposes to begin to collect the Regional Greenhouse Gas Initiative carbon tax from its customers, collecting $168 million during the first year through yet another of those proliferating rate adjustment clauses (or “RACs”).

It will get it by charging a flat $.002388 per kilowatt hour, or $2.39 on every 1,000 kWh. The same charge will be imposed on residential, business, industrial and even non-profit customers. The full case file is here.

Is the universal flat rate a break for residential customers or a break for the largest users? Usually, there are complicated differences in their tariffs. Look for example at the RAC charge for other environmental projects at the utility, Rider E. Residential customers pay $1.68 per 1,000 kWh for that, while large industrial accounts pay from $1.25 (GS-1) down to around 70 cents (Schedule 10).  Continue reading

The University of Virginia Eastern Virginia Medical School

by James C. Sherlock

With additional information and thoughts generated by responses to my original posts on this matter, I offer this post as a final proposal before the November 15 release of the Sentara-funded “study” of what I call the Sentara Plan for Eastern Virginia Medical school.

The nation is short of doctors and shorter yet of good doctors. The nation has to produce more of both or the situation projects to worsen.

There is an opportunity here in Virginia to deal with both objectives.

But the Sentara Plan is not it.

Continue reading

Northam’s Tax Hikes Keeping Virginia Budget Afloat

This column was published originally in the Thomas Jefferson Institute for Public Policy newsletter. Steve normally re-publishes it on Bacon’s Rebellion himself, but he is volunteering at the polls today, so I am posting for him. — JAB

by Steve Haner

One quarter into the new fiscal year, despite the ongoing COVID-19 recession, Virginia state government is blowing the roof off its revenue estimates. Thank tax increases Governor Ralph Northam has signed.

Secretary of Finance Aubrey Layne recently reviewed the July through September 2020 results with state legislators, offering his standard slide presentation. Compared to the year before – before COVID — the state’s total General Fund revenue was up 9.9%, sales tax revenue was up 7.5%, corporate income tax receipts up 36% and estimated individual tax payments (those not withheld from paychecks) up 59%.

Now more tax increases are being proposed for the 2021 General Assembly. The Transportation and Climate Initiative in particular is a new carbon tax on gasoline and diesel. The proposal to restore a state inheritance tax on large estates is back. Virginia’s leading progressive group is actually hiring a “revenue campaign manager” to lead the 2021 and 2022 fight “to secure expanded progressive revenue options.” The tax changes already in place will see our revenue “progress” quickly. Continue reading