A Glimpse Inside the Process
Concealed handguns. Corporate economic development cash payments of $110 million. Confirming voter identities by checking Social Security numbers. A new tax subtraction for taxable gains on property taken by eminent domain.
Those are just some of the issues considered in the first hour of Wednesday’s meeting of the Senate Finance Committee, and it was a typical hour with a typical bill list in Virginia’s insanely short legislative calendar. There are only two weeks between the deadline for bill introduction and the deadline for most committees to clear their initial dockets.
Want to become a policy wonk? Want to wow your friends with inside knowledge of state government? Skip the public policy master’s degree – just come sit in Senate Finance for a few years and listen, read the fiscal impact statements, watch the show as bills vitally important to somebody get passed, killed, dissed, amended on the fly or left on the calendar and forgotten. Sometimes it goes so quickly if you blink you miss it.
Who knew that Virginia collects almost $4 million a year in sales taxes on various menstrual products? That’s the fiscal impact statement on new Senator Jennifer Boysko’s Senate Bill 1715, creating a tax exemption for “menstrual supplies, specifically pads, tampons, and menstrual cups.” The idea has been promoted for years by the Virginia Menstrual Equity Coalition.
The group brought a University of Richmond professor to opine that the sales tax exemption, if approved, would bring shoppers flowing from neighboring states into Virginia border area retailers (an economist always helps). The most important witness, however, was Secretary of Finance Aubrey Layne, there to tell the committee that Governor Ralph Northam thought so highly of this idea he had baked it into his budget, subtracting $4 million from his sales tax revenue projection to cover the impact. (Really, in a $100 billion budget, how can you tell?)
Sold! Boysko’s bill, a perennial loser in the House during her career as a delegate, then got an affirmative vote. To pass it had to take on two amendments – a delayed enactment to 2020 and something known to all Senate Finance fans as (cue the organ music) The Clause. The Clause states that passage of the bill is contingent on funds being available in the budget to cover it.
Sometimes The Clause, which goes back at least to the legendary Chairman Hunter Andrews, is just a way for the committee to send the patron away happy, only to dash their hopes when the budget is published. Perhaps the committee doubted the secretary Wednesday that the funds were all accounted for.
It’s the fact that so many bills do have or might have a fiscal impact that makes Senate Finance a legislative crossroads. Its duties in the House are divided between two panels, Finance and Appropriations (well, they once were, but that’s another story.) Letters from the chairman of Senate Finance pluck bills out of other committees and gather them to the sanctum.
Senator Amanda Chase’s Senate Bill 1018, dealing with providing GIS technology for mapping voting precincts, got the same treatment as Boysko‘s – The Clause and a delayed effective date. But it passed. Senator Mark Peake’s Senate Bill 1083 passed without The Clause, with a delayed effective date, but not before he complained about the $1 million cost estimate provided by the State Board of Elections.
A word about these fiscal impact statements. You may be shocked to learn that if Virginia’s version of the Deep State dislikes a bill, it commonly is met with a disturbingly high projected price tag. Peake was a bit skeptical it would really cost the state that much to look up newly-registered voters on the database used by employers to confirm Social Security numbers.
That bill got out 11-5, with five Democrats voting no. Democratic voters apparently cannot or will not be bothered with proof of identify.
There were no split votes (or debate) on the two economic developments deals. Senator Thomas Norment’s Senate Bill 1370 sets up $70 million in payments to Micron for its plans to expand in Prince William County, adding 1,100 more jobs and $3 billion in cap ex. Apparently, the company will post a cash surety for the full grant amount, which demonstrates cash flow was not the issue with Micron.
Senator Frank Wagner’s Senate Bill 1393 simply amended an earlier economic development grant program for Newport News Shipbuilding. A bill three years ago established a path to five $8 million grants over five years, starting in 2023. Wagner’s just bill accelerates the payout schedule to 2021.
The company’s expansion to deal with a major Navy submarine contract “is way ahead of schedule,” Wagner said. The shipyard’s lobbyist helpfully added that even with the acceleration, the cash won’t flow to the company in this current budget.
There was no fiscal impact estimate on the most interesting idea of the hour, Senator Frank Ruff’s Senate Bill 1256, allowing landowners being paid for their land through a condemnation procedure to avoid tax on any capital gains. “Unknown negative General Fund revenue impact” was the phrase used. As drafted the bill applies to all condemned land taken starting this year.
The committee held that one back for a thorough massage by staff. Should there be an annual cap on the amount of tax relief? A ten-year look-back? Is it individuals only or can businesses claim the exemption (and why not, pray tell?) The current pipeline disputes may have inspired the idea, but the bill has general impact.
It could force more condemnation actions. Who would sell voluntarily when a gain out of condemnation is tax free? Big idea, really big idea – we glimpsed it for a minute, and it slipped below the waves again, perhaps never to be seen again.
That’s enough – there were five or six other bills in that hour. From tampons to nuclear submarines, from voter registration to vaporized nicotine to the taxable gain from eminent domain. No hour in any classroom you could imagine would top that lesson in the deep opportunity for mischief or good residing with one small group of Virginia’s finest during these magic days at the Capitol.
