Category Archives: Taxes

Map of the Day: Fiscal Stress

Posted on August 14, 2022 by | 8 comments

The Commission on Local Government has published its 2022 update on the fiscal condition of Virginia localities. No surprises here — the same geographical patterns hold as in the past. The most stressed localities are uniformly cities, and the most stressed are small cities. The least stressed are counties in Northern Virginia and on the metropolitan fringe of Richmond. Two remarkable outliers, Bath and Highland counties, seem to be in great shape relatively speaking. View the report for details of your jurisdiction.

Of greatest interest is the change in revenue capacity between 2019 and 2020, the latest year covered. The biggest winner: Sussex County, with a gain of 14.5%. The biggest loser: Prince George County, with a loss of 4.o%. Continue reading →

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Turbocharged: Fairfax Car Tax Burden

Posted on August 12, 2022 by | 39 comments

A 2020 Rav4.

by Bill Tracy

Fairfax County just mailed out its 2022 Car Tax bills, and the tax increase is substantial.

The Board of Supervisors granted us a 15% discount off of the inflated 2022 Blue Book vehicle values. That’s nice, but it looks like the Board failed to mention that the car tax was increasing for a second reason: the “subsidy” was reduced for the first $20k value of the car.

Here are some car tax facts for my personal vehicle.

Base Case last year (2021):
Bill’s 2020 RAV4 Value 2021: $ 23,725
    Tax Before Relief: $1,084
    Tax Relief/Subsidy (under $20k Value): $525
    Net Car Tax Owed 2021: $558  Continue reading →

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Too Much Money for Roads?!?

Posted on August 8, 2022 by | 43 comments

by Dick Hall-Sizemore

Although gas prices have receded substantially from the levels that sent everyone into a tizzy earlier this  year, Governor Youngkin has not given up on his proposal to lower gas taxes.  Now, however, his rationale for the cut is different.

According to veteran reporter Dave Ress, in an article that appeared in the Richmond Times-Dispatch, the Governor told a group of supporters in Virginia Beach recently that the gas tax should be decreased because it brings in too much money for the state transportation fund. The governor said that some level of tax needed to be retained as a use fee.

If the governor really believes that the state brings in too much money for the transportation fund, it seems strange that he let go unchallenged the General Assembly’s budget proposals to use $554 million in general fund appropriation to fund highway and bridge construction projects as follows:

  • Widen I-64 between the Bottoms Bridge exit in New Kent to James City County–$539 million (Item 447.10, Chap. 1 (HB 29) and Items 452 and 485, Chap. 2 (HB 30))
  • Extend Nimmo Parkway, Virginia Beach–$10,000,000 (Item 447.10, Chap. 1 (HB 29))
  • Replacement of Robert O. Norris Bridge–$5,000,000 (Item 452, Chap. 2 (HB30))

Continue reading →

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Need a New Corset? You’re in Luck!

Posted on August 5, 2022 by | 7 comments

by Kerry Dougherty

Got a gangster in your family? How about a dominatrix? An altar boy?

Well, good news for all of them. Starting today and running through Sunday at midnight they can buy items they desperately need like bandanas, corsets and altar outfits. All without paying Virginia sales tax.

Yep, it’s the commonwealth’s annual Sales Tax Holiday weekend. Actually, it’s the “combined” sales tax holiday. A few years ago Richmond merged the spring “Hurricane Preparedness” tax break with August’s “Back to School” event, turning this into an extravagant weekend that allows you to shop anywhere from Home Depot to Victoria’s Secret. Tax free.

Combining the two holidays was smart. As someone who’s lived in hurricane country since 1984, I can tell you that absolutely no one shops for batteries, generators or even toilet paper until they see Jim Cantore lashed to a telephone pole in front of their house. Continue reading →

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Blacks Don’t Always Think the Way White Cultural Elites Think They Do

Posted on July 27, 2022 by | 41 comments

by James A. Bacon

Governor Glenn Youngkin’s popularity in Virginia was the top-line story from a new Virginia Commonwealth University poll. The survey, published yesterday, found that 49% of Virginians polled approve of his job as governor compared to 38% who disapprove. It’s not surprising to see his popularity holding up so well. Virginians tend to be favorably disposed toward governors not caught up in scandal, and Youngkin is no exception.

The more interesting data from the poll was buried in the VCU press release. Two points stand out: attitudes of Blacks toward taxes, and attitudes of Whites toward Historically Black Colleges and Universities (HBCUs).

Leaving the plantation on taxes. Youngkin’s tax cut on gas is more popular among African-Americans than the electorate as a whole. The three-month elimination of the motor vehicles fuel tax garnered a 58% approval rating from all Virginians but 76% from Blacks. (Elimination of the state portion of the grocery tax was broadly popular across the partisan divide, with seven out of ten Virginians in favor. VCU did not break out the results for Blacks on that question.) Continue reading →

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Posted in Culture wars, Education (higher ed), Race and Race Relations, Taxes, Uncategorized

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Love that Budget Surplus! Use It to Bullet-Proof State Finances.

Posted on July 22, 2022 by | 16 comments

by James A. Bacon

There’s good news for Virginia on the fiscal front. We need to make the most of it.

The Old Dominion closed fiscal 2022 with a $1.94 billion General Fund revenue surplus, Governor Glenn Youngkin announced yesterday. Total revenue rose 16.3% from the previous fiscal year.

“Fiscal 2022 was an extraordinary year for revenues and finished strong,” Secretary of Finance Stephen Cummings said. While the state has yet to recover all the 133,000 jobs it lost during the pandemic, job growth has been strong this calendar year — 3.5%. And, while competitor states all exceed their pre-pandemic employment levels, Virginia has scored some economic-development coups — LEGO, Raytheon and Boeing most notably. Over the first four months of 2022, Virginia ranked 15th nationally among the states in employment growth. 

Youngkin makes a case for giving some of the revenue surplus back to taxpayers, who are getting clobbered by 9% inflation. I’m sympathetic. Taxpayers are getting the shaft. But I have bigger concerns.

In all likelihood, Virginia’s economic and budget surges are unsustainable. They are byproducts of economic recovery from the COVID-19 shutdowns and massive federal stimulus. The effects of COVID recovery are largely spent, and the federal stimulus is unsustainable. Washington’s political class may delude itself that it can continue ramping up deficit spending with economic impunity, but history suggests that it cannot. Continue reading →

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Posted in Government Finance, Taxes

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Taxation Through Misrepresentation

Posted on June 27, 2022 by | 15 comments

by Arthur G. Purves

Around June 28 Fairfax County homeowners will get their real estate tax bill, which is due July 28. The typical homeowner’s real estate tax bill will increase by $484, or 6.8%, from $7,159 to $7,643.

Around Sept. 5, Fairfax County car owners will get their personal property tax bill, which is due Oct. 5. The typical household’s personal property tax will increase by $151, or 36%, from $420 to $571.

Combining real estate and personal property tax increases, the typical household will have a $634, or 8.4% tax increase. This is the largest increase since Gerry Connolly’s 9.7% increase in 2006, at the end of the housing bubble. (When he was county chairman, Congressman Connolly increased taxes 15% in 2003, which makes him the record holder for the largest tax increase since 1982.)

However, if you read county chairman Jeff McKay’s April 26, 2022, newsletter about next year’s budget, you’d think your taxes are going down. Continue reading →

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Dropping? Nope, Gas Tax Now Rises July 1

Posted on June 22, 2022 by | 98 comments

by Steve Haner

Virginia’s gasoline and diesel taxes will rise 7% on July 1, about three more cents per gallon when all the elements of the tax are combined.  This is the inflation-driven cost of living adjustment which Governor Glenn Youngkin (R) and most legislative Republicans tried to short circuit, but which was preserved by a vote in the Virginia Senate last week.

The new gasoline tax will be 28 cents retail, 8.2 cents wholesale plus another 0.6 cents per gallon to fund a program for removing old underground tanks safely.  That’s a combined tax of 36.8 cents per gallon. The taxes on diesel will be 28.9 cents retail, 8.3 cents wholesale plus the same tank fee, a total of 37.8 cents per gallon.  Continue reading →

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Posted in Business and Economy, Energy, General Assembly, Taxes, Transportation

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Only Part of the Gas Tax Would Be Suspended

Posted on June 16, 2022 by | 29 comments

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 →

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Posted in General Assembly, Government Finance, Taxes, Transportation

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Fuel Costs Explode on Dominion Bills in July

Posted on June 12, 2022 by | 75 comments

by Steve Haner

Are you enjoying paying more for gasoline? Have you noticed how that works its way through and inflates the price of just about everything else you buy? The other shoe drops in July when Dominion Energy Virginia increases its prices to reflect the rising cost of fuel. It will also spread more inflation virus throughout the economy.

The cost of fuel and purchased electricity is a separate charge, designated Rider A, on every monthly electric bill, residential and commercial. The annual fluctuations are usually small, and can go either way, but the increase this time will hit everybody hard and may hold for years. (Here is the case file.) Continue reading →

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Posted in Business and Economy, Energy, Regulations and Government Oversight, Taxes

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Reject the Cut, Help the Students

Posted on June 11, 2022 by | 18 comments

by Chris Braunlich

Cruise over to the website of Cristo Rey Richmond High School, and you’ll learn that all of the students there are from low-income families.

You’ll also read about scores of national and local partnerships, providing hundreds of work-study opportunities to teach students the art and science of working in an office environment and the soft skills of communications, customer service, office etiquette, and team building – the sort of skills employers highly value and that make young people highly employable.

What you won’t learn is that those positive programs – and the future of their scholars — may now be in severe jeopardy.

The school came to Virginia because of the Education Improvement Scholarship Tax Credit (EISTC), a program offering donors to qualified scholarship programs serving low and moderate income children a 65% state tax credit. Last year, more than $600,000 in scholarships helped Cristo Rey serve students who needed a better educational placement, and whose family incomes come in at less than $65,000 for a family of four. Continue reading →

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Posted in Education (K-12), Taxes

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You Just Paid More RGGI Tax, Virginians

Posted on June 5, 2022 by | 24 comments

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 →

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Posted in Energy, Environment, General Assembly, Government Finance, Regulations and Government Oversight, Taxes

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School Choice Tax Credits Reduced in New Budget

Posted on June 3, 2022 by | 28 comments

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 →

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Posted in Education (K-12), General Assembly, Government Finance, Taxes

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Sales Tax On Groceries With Us Through Christmas

Posted on June 3, 2022 by | 10 comments

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 →

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Posted in General Assembly, Government Finance, Taxes

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Details on Real Estate Assessments and the Property Tax

Posted on June 1, 2022 by | 32 comments

by Dick Hall-Sizemore

I am following up on James Sherlock’s article on local property taxes.

In Article X, sections 1 and 2, the state constitution requires that all property be taxed at fair market value. There are exceptions, but those are not relevant to this discussion. So, there you have it. Unless the constitution is amended, localities must tax property at fair market value.

State law recognizes the impracticality of assessments keeping up with fair market value on a continual basis.

One of the main reasons that assessments lag behind market value on a statewide basis is the varying frequency of reassessments by localities. State law requires cities to reassess every two years, except that cities with a population less than 30,000 can use a four-year reassessment cycle. For counties, the law allows them to go four years between reassessments, except for counties with a population under 50,000 , and the counties of Augusta and Bedford, which are allowed a five-year or six-year cycle. Continue reading →

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