Complex Digital Sales Tax Worthy of Veto

By Steve Haner

Pick any member of the General Assembly at random, stop them in the grocery store for a chat, and quiz them about the digital sales tax they approved a week ago Saturday.  It will quickly become clear that most had no idea what they were voting for when they approved it.

What will the tax add to the cost of your Amazon Prime or Netflix? (For most, 6-7%.) Will the tax be collected on both the monthly fee and on anything extra you download (Yes) Will it add to the cost of preparing your tax to file online, your annual lease for Microsoft programs on your laptop or your security system program? (Yes, most digitally-based services will all be taxable to individuals, and many of them will be taxable to businesses. If you are doing something on a computer or phone that costs money, it is likely to become taxable.) 

Even for a business, if some software package its employees use includes a combination of online services, will it owe tax on the entire package? (Yes, unless the vendor is willing to break apart the bill, which many may refuse to do. That is because of the new language about taxing bundled services.)  If an out of state vendor does not add tax to the invoice, taxpayers will be required to calculate and pay it as a use tax, with auditors ready to pounce if they don’t.   

Think of engineering, law, banking, or medicine.  So many of their processes are now controlled by expensive software, most of which is about to be 6-7% more expensive.  At the shipyard in Newport News, paper blueprints and printed job instructions were replaced with tablets and digital design programs years ago.   Continue reading

Jeanine’s Memes

From The Bull Elephant

Can the Governor Veto RGGI?

by Dick Hall-Sizemore

One of Gov. Glenn Youngkin’s top priorities has been to extricate the Commonwealth from participation in the Regional Greenhouse Gas Initiative (RGGI). One of the top priorities of the Democrat-controlled General Assembly has been ensuring that the Commonwealth participates in RGGI.

For those readers unfamiliar with the purposes of RGGI and how it functions, along with the pros and cons of membership, those topics have been covered extensively in this blog. See here, here, and here.  This article will focus on the constitutional struggle between the governor and the legislature.

Brief legislature history

In 2020, the General Assembly authorized the director of the Dept. of Environmental Quality (DEQ) to establish a market-based energy allowances trading program and the Governor to include the Commonwealth in RGGI. The Air Pollution Control Board (“the Board”) and the Governor exercised their authority to act, and Virginia became a RGGI participant on Jan.1, 2021.

When he took office in 2022, among the first executive orders issued by Gov. Younkin was one directing the DEQ director and the Board to begin taking steps to end Virginia’s participation in RGGI. The Board adopted the final repeal of the RGGI regulations in July 2023, to be effective at the end of the year. Environmental groups sued and those suits are still pending in court.

The next stage of this saga came as the new Democratic majority in the 2024 General Assembly adopted language in the budget bill prohibiting the use of state funds to “impede” the state from rejoining the RGGI and directing all relevant agencies to take steps to immediately rejoin the RGGI and continue participation. Although some Democrat legislators and environmentalists believe the language is vulnerable to a gubernatorial veto, court precedents and recent actions would augur a more favorable outlook on their account. Continue reading

Bacon Meme of the Week

Prison Population Down, Crime Up in 2022. Coincidence?

The population of Virginia’s state and federal prisons posted a 10.5% decline between 2021 and 2022 — the largest drop of any state, according to new Department of Justice data. Oregon saw the second largest decline at 5.2%. Many states saw increases in their prison populations, as reported by WRIC news.

The total prison population for Virginia in 2022 was 27,162. The numbers do not include inmates of local jails.

The fall-off in prison population was especially marked among females — 18%. The DOJ report did not break down state-by-state prison populations by race.

With the exception of drug offenses, which declined, the crime rate per 100,000 population increased in almost all categories in 2022, according to the Virginia State Police “2022 Crime in Virginia” report.

— JAB

Jefferson Institute Lists Bills Youngkin Should Veto

By Derrick Max

We have reached sine die of the 2024 General Assembly legislative session. During this session, over a thousand individual bills and a nearly 500-page biennial budget were sent to the Governor. All of this must be reviewed and acted upon by Governor Glenn Youngkin (R) before the April 17 reconvened session.

There may be hundreds of bills on the Governor’s desk worthy of his veto. Additionally, Democrats inserted partisan policy decisions within the budget in such a way that the Governor may need to veto it in its entirety. As Senator Creigh Deeds (D-Charlottesville) noted in his end-of-session constituent letter: “The budget includes items the Governor does not support, and some of those may be difficult for the Governor to veto because they are woven into the fabric of the budget itself. Speculation is rampant that he may opt to veto the budget, which would set us up for another prolonged budget debate.”

Governor Youngkin should not hesitate to use his veto pen liberally, including on the budget. As former Governor Terry McAuliffe (D) said, “The veto is not a decision I take lightly, but it is a necessary tool to prevent harmful legislation from becoming law. I will continue to stand up for the values and priorities of the people of Virginia by exercising this authority judiciously.” Governor McAuliffe had the highest number of vetoes in recent years when he faced Republican majorities in both chambers, vetoing 49 bills in 2017 alone and 120 during his entire term. Continue reading

War on Fossil Fuels Reaches Court of Appeals

By Steve Haner

A climate alarmism publicity stunt masquerading as serious litigation had a hearing in front of the Virginia Court of Appeals on Monday, seeking to revive its rejected petition to shut down the fossil fuel industry in Virginia. Why? Because some of the plaintiffs suffered from heat exhaustion while exercising on summer days, and two of them got Lyme Disease after tick bites.

The suit was last discussed on Bacon’s Rebellion when it was filed in 2022. Later that year a Richmond City Circuit Court judge accepted the state’s motion to dismiss it on summary judgement, citing the doctrine of sovereign immunity. It was an appeal of that dismissal which was before a panel of the appeals judges, covered only by Brad Kutner of Radio IQ.

The appeals court is being asked to reinstate the case, which is seeking aggressive if poorly defined relief. Basically, the original petition seeks to repeal Virginia’s Gas and Oil Act and reverse long-standing policy decisions in favor of developing energy resources. It seeks to prevent the state regulatory agencies from allowing any new fossil fuel infrastructure of any kind, presumably from pipelines to coal mines to gas stations to power plants.

The stages and pleadings of the Virginia case are documented by a website tracking it and a handful of similar cases around the nation, with the same basic arguments and a common set of lawyers. So far, the plaintiffs have seen some initial success only in Montana and Hawaii. Their federal level suit is being actively opposed by the Biden Department of Justice. Continue reading

Governor’s Budget Transformed

Gov. Youngkin addressing media about budget changes, with Senators Lucas and Locke looking on. Photo credit: Richmond Times Dispatch

by Dick Hall-Sizemore

In my almost 50 years of working around, and following, the General Assembly, I do not think I have ever seen the legislature take apart a governor’s budget bill to the extent that this General Assembly just demolished Gov. Youngkin’s budget.

The change that had the most impact was the jettisoning of the governor’s proposed tax package. Steve Haner has previously described the legislature’s actions (here and here). To summarize, the legislature rejected the governor’s proposed tax cuts, embraced his proposal to expand the sales tax to digital services, and went one step further by expanding the sales tax to cover digital services between companies.

The Governor’s proposal would have resulted in about $1 billion less in general fund revenue over the biennium. The move by the legislature was projected to increase general fund revenue by $1 billion over the biennium. That is a $2 billion swing in general fund revenue available for appropriation. And the Democrats in the majority on the budget committees of both houses were happy to use that extra money to spend on their priorities, primarily K-12. One only has to peruse the conference report to see a plethora of appropriation increases. Continue reading

Correction: SMR Bills Cover Both Utilities

Friday’s report that the General Assembly voted to allow early cost recovery on small modular reactors only for Appalachian Power Company was in error.  The Senate version of the bill approved March 7 was language applicable solely to Dominion Energy Virginia. A substitute that removed Dominion from the bill was rejected.

The error was entirely due to inattention on my part. Frankly, it is a message I need to stop trying to write about live legislation if I am not on the ground at the Capitol or glued to the broadcasts. Two other reports on digital outlets which I had questioned (in the comments) got it right while I got it wrong. For that most of all, I apologize. Continue reading

San Francisco’s “Algebra for None” Policy and How Virginia Avoided a Similar Fate

by Todd Truitt 

On March 5, 84% of San Francisco voters  voted in favor of a referendum for San Francisco Unified School District (SFUSD) to bring back Algebra for 8th graders, overturning their prior ill-fated math reform (a “no middle schooler let ahead” math policy). What does this vote have to do with Virginia?

The Virginia Department of Education (VDOE) had initially proposed a similar policy for Virginia as part of its Virginia Math Pathways Initiative (VMPI) in 2021. As noted below, VMPI cited Stanford Education Professor Jo Boaler and resources primarily using SFUSD’s misrepresented preliminary data as “empirical evidence” for VMPI’s similar initial proposal. 

San Francisco’s “Algebra for None” Policy and Its Immediate Effects

SFUSD revised its math program in 2014 based on the ideas of Boaler, requiring heterogeneous math classes and restricting Algebra until 9th grade. By 2018, Boaler and SFUSD were claiming success based upon SFUSD’s preliminary data (subsequently exposed as having been misrepresented).

At the same time, a flood of middle class and well-off families pursued workarounds, thereby creating opportunity gaps with less advantaged kids. As a result, the City of San Francisco (not SFUSD) began funding workarounds for less advantaged kids. Meanwhile, SFUSD’s math head used the tired trope that those who opposed the inequity of its “Algebra for None” policy were only affluent parents fighting for their own children to get ahead. Continue reading

The Sausage Factory Taxes the Digital Economy

By Steve Haner

The Virginia General Assembly has now jumped into the brave new world of taxing the digital economy, but the sales tax provisions it adopted in the budget conference report Saturday are not the same ones that appeared in earlier budget versions. The cabal of tax raisers in the secret final negotiation got creative.    Continue reading

Another City Hall Fiasco in RVA

by Jon Baliles

City Hall suffered another self-inflicted artillery wound last week when within a span of four days they were sued for allegedly violating state Freedom of Information Act (FOIA) laws, pledged a stout defense against the claims, and then announced they would be changing the way City Hall handles FOIA requests.

Translated, the city will pivot back towards the old FOIA system they replaced just last year with their new “centralized” system that has been so successful it has led to numerous violations (or just ignoring) FOIA requests, multiple media stories detailing the failures, and several lawsuits that had to be filed in order to get information that should be easily available.

Call it Meals Tax Fiasco, Part Deux. Continue reading

Jeanine’s Memes

From The Bull Elephant

Bacon Meme of the Week

See, Hear, Speak No Evil on Four Whale Deaths

The Daily Press credits Jennette’s Pier for these two photos it published.

Another whale has turned up dead on a beach, the fourth found on Virginia or North Carolina beaches within one week, several within sight of Dominion Energy Virginia’s offshore turbine project.  This one was identified as a juvenile sperm whale and is the furthest from the project site.

In all the news coverage so far, no intrepid reporter has told their viewers or readers what (if anything) is going on out in the ocean on the construction site. Dominion’s federal license allowing “incidental take” of marine mammals began its five-year effective period in early February. It would be fair to ask the utility if contractors are actively surveying the sea floor with sonar at this time or doing any preliminary pile driving. Continue reading