Category Archives: Budgets

Democrats Lose Concerns About Taxing the Poor

Posted on February 20, 2024 by | 54 comments

Econ 101 Quiz. Virginia Democrats are poised to raise the sales tax 1% in most localities, add digital products to the taxed services, and create a new payroll tax. How will those changes impact that chart? Click for larger view.

By Steve Haner

A piece of Republican Governor Glenn Youngkin’s tax package has survived after all, but only the part that increases the sales tax base to collect about $1 billion or so more per year from citizens. Democrats who recently complained that sales tax increases were unfair to the poor are suddenly embracing them. 

On Sunday, both the Virginia Senate and the House of Delegates budget committees approved Youngkin’s budget language to impose the sales tax on a host of digital products and services, adding 6% or more to the prices of downloads, streaming services, and online data storage. The full range of newly taxed transactions is not yet clear. 

The Senate then increased the gain to the treasury by making sure the new taxes will also cover business-to-business transactions, something the governor sought to exempt and something which is just passed along in higher prices.  

The risk of including that tax policy initiative inside Youngkin’s introduced budget bill was obvious from the start, and General Assembly Democrats have now pounced on the opportunity to capture that revenue. The tax increase is now wrapped in with all the state spending for two years, a hard bill to vote against.   Continue reading →

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Posted in Budgets, Business and Economy, General Assembly, Taxes, Uncategorized

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Boomergeddon Countdown: Ten Years… Nine…

Posted on February 6, 2024 by | 163 comments

by James A. Bacon

The last time the United States had a serious conversation about deficit spending and the accumulating national debt was in 2010 with the publication of the Simpson-Bowles study. (That’s about the same time I wrote Boomergeddon, predicting that the United States had 20 to 30 years before the fiscal wheels fell off the bus.) After the usual tut-tutting, and Republicans blaming Democrats, and Democrats blaming Republicans, nothing was done. Indeed, in the following era of artificially low interest rates that made deficit spending seem painless, Congress, successive presidents, and the media ignored the issue and deficits ballooned.

Now the national debt exceeds $34 trillion, the debt-to-GDP ratio exceeds 100%, the structural budget deficit is running between $1 trillion and $2 trillion annually, and it will be only a decade before the Social Security Trust fund runs out and sparks a fiscal/political crisis. Political polarization is even worse today than it was during the Obama presidency. Democrats and Republicans accuse one another of sabotaging democracy, and trust in our institutions has reached an all-time low. It’s as if the captain and the executive officer of the Titanic were fighting for control of the vessel, rolling on the deck trying to gouge each others’ eyes out, even as its prow dips below the icy waters.

Meanwhile, there is no cognizance in the political rhetoric here in Virginia of the fiscal perils to come. The Commonwealth is required by its state constitution to balance its budget, and the state has managed to retain its AAA bond rating, so we are not as wildly profligate as some other states. I suppose there will be some temporary comfort in the thought that we were not the first to plunge into ungovernable anarchy when the federal government fails. But that comfort likely won’t last long. Continue reading →

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But It’s Just a Little Bit of Money

Posted on January 29, 2024 by | 60 comments

Rep. Ben Cline (Va.-6th District)

by Dick Hall-Sizemore

Ben Cline, the Commonwealth’s Republican member of the U.S House of Representatives from the 6th District, is very upset about the level of federal spending and the state of the federal deficit.

Cline is chairman of the Republican Study Committee’s Budget and Spending Task Force.  In a press release last year, he lamented the trillions in new spending authorized by the Democrats in recent years and the $31.92 trillion in national debt. (He does not mention the trillions in debt rung up during the Trump years.)  The study committee has a proposal that would “balance the budget in just seven years, cut spending by $16.3 trillion over 10 years and reduce Americans’ taxes by $5.1 trillion over 10 years.”

As part of that overall plan, Cline’s task force produced an alternative budget for 2024.  I have to give Cline and the task force some credit.  Usually, when conservatives call for spending cuts, they refuse to say what specific items should be cut or eliminated.  That is not the case with this document.  It has over 120 pages listing specific programs for elimination or reduced funding.  After dealing with Social Security, Medicare, and defense, the budget has about 30 pages of specific mandatory and discretionary spending programs it recommends eliminating or reducing. Continue reading →

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Posted in Budgets, Finance (government), Politics, Transportation

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Serious Tax Reform Addressing a Serious Problem

Posted on January 22, 2024 by | 49 comments

Chris Braunlich

By Chris Braunlich

The American linguist Yogi Berra once said of a New York City restaurant: “Nobody goes there anymore.  It’s too crowded.”

Overcrowding, however, isn’t what motivates a move to a state (or from a state).  Those decisions are inspired by robust economic activity, jobs for residents, and a pathway for each generation to do better than their parents did.  People move for a job, for higher pay, for lower cost of living, or for a better education. Continue reading →

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Posted in Budgets, Business and Economy, General Assembly, Taxes

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There’s Gold in Them Thar Hills!

Posted on January 11, 2024 by | 134 comments

by Dick Hall-Sizemore

As staff members of the General Assembly start looking to “find” money in Gov. Youngkin’s proposed budget bill that can be used to fund priorities of their committee members (and they will be looking—that is a major part of their jobs during the Session), a good place to look would be capital maintenance reserve. There is at least $200 million in that budget item that could be taken without adversely affecting any of the agencies involved.

As defined by the Dept. of Planning and Budget (DPB) in its reporting instructions to agencies, a maintenance reserve (MR) project is “a major repair or replacement to plant, property, or equipment that is intended to extend its useful life.” A typical MR project would be repair or replacement of built-in equipment such as in HVAC systems; repair or replacement of building or plant components such as roofs or windows; and repair of existing utility systems such as steam lines or water systems.

The cost for an MR project must exceed $25,000 but be no more than $2.0 million for a non-roof replacement project and no more than $4.0 million for a roof replacement. DPB may grant exceptions to these dollar amounts and agencies must submit annual reports to DPB on MR expenditures. Continue reading →

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Posted in Budgets, General Assembly, Uncategorized

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Sorry, Senator. Zalenskyy is No George Washington

Posted on December 13, 2023 by | 68 comments

Sen. Tim Kaine

by Kerry Dougherty

Tim Kaine jumped the shark.

Get a load of the nonsense this United States Senator – from VIRGINIA – Tweeted on Tuesday:

President Zelenskyy spoke to the Senate today about the critical role of American support for Ukrainian democracy. He stood beneath a portrait of George Washington, who helped birth an America free from domination by a great power. A moving moment.

— Tim Kaine (@timkaine) December 12, 2023

Seriously, senator?

No member of Congress should ever compare America’s first president with this little corruptocrat.

This is the problem when Virginians vote for a Kansan to represent them in Washington. He missed fourth grade Virginia history and apparently they didn’t teach American history in the schools he attended either.

If they had, the senator would know that Washington was a humble man who fervently believed in freedom and the rights of man. He was an educated, measured leader who stepped down after two terms in office and refused to allow himself to be set up as anything more than a man of the people.

In his farewell address, Washington warned against foreign entanglements.

Presidents have been ignoring Washington’s admonitions for decades, unfortunately. Continue reading →

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Posted in Budgets, Defense, Democracy and Western Civilization, Immigration, Politics

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Does UVa Need to Charge Higher Tuition to Keep Pay Competitive?

Posted on December 9, 2023 by | 2 comments

by James A. Bacon

The Ryan administration notched up two big wins in the University of Virginia Board of Visitors meeting Thursday and Friday. It pushed through 3% tuition increases for the next two academic years and it framed the budgetary debate to its advantage. Rather than engaging in a wide-ranging discussion of how UVa might hold down costs, the Board spent most of its time talking about the challenge of hiring and retaining faculty and staff, with the implicit assumption that staying competitive will require higher pay, more money, and higher tuitions.

The administration carefully orchestrated the discussion of tuition & fees from the very beginning — through an initial Finance Committee meeting in October, a public hearing on tuition increases at which only one person testified in November, and then the Board vote Friday. Each step of the way, the administration made lengthy presentations contending that UVa provides a superior value proposition to students, that it has restrained spending, and that inflationary pressures and cutbacks in state funding compel the university to raise tuition. Discussion was restricted to the data presented by the administration. Past efforts by board members to obtain additional information about UVa’s cost structure — in particular, about administrative costs — were ignored.

Bert Ellis, a former president of the Jefferson Council and appointee of Governor Glenn Youngkin, was the only board member to abstain from voting for the tuition increases. The seven other Youngkin appointees on the Board voted for the tuition increases, as did every holdover from the Northam administration.

The Ryan administration presented a case that was sometimes valid but frequently used cherrypicked data or made points that were shorn of context, as the Jefferson Council has documented in previous posts. There are no simple answers to the question of what the “right” level of tuition & fees should be. Optimal tradeoffs between affordability and costs require a vigorous and free-ranging debate at the Board level that simply did not occur. Continue reading →

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Posted in Budgets, Education (higher ed)

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Governor’s Chronic Absenteeism Task Force – Part Three – Vital New State Roles

Posted on December 7, 2023 by | 11 comments

By James C. Sherlock

A compilation from https://www.doe.virginia.gov/data-policy-funding/data-reports/data-collection/special-education

I have found in 18 years of reporting on education in the Commonwealth that each school, each school division and each region is to some degree its own ecosystem.

Taking the example of chronic absenteeism, an individualized assessment of causes could be attempted:

  • if a single school‘s chronic absenteeism can be adjusted statistically for differences in its demographics (race, ethnicity, economic status, English learners, IEPs, etc.) to its division norms, and
  • if that school is a statistical outlier from its division good or bad.

But those are very big if’s because of the complex algorithm that would be required for comparing.  And the results would apply only to that specific school.

I have sometimes compared divisions‘ statistical performances on absenteeism and SOL pass rates against state norms, but usually at the extremes.  There are too many variables to sort among the bulk of them.  At the division level, the variables are as great as at the school level.

Regional differences are there, but causes are hard to pin down beyond differences in demographics and cultures.

That said, and to some degree for that reason, I offer two new state roles for improving school attendance:

  1. marketing, which is either not now done at all or done ineffectively, to increase parents understanding of the value of school; and
  2. investigations and enforcement, which are done sporadically across the state.  That is because of both the time and expertise investigations take and current laws that require schools to involve the court system in enforcement.

Those recommendations are not budget neutral.  This is a budget year.  They are tailored to draw Democratic support.  The time for them is now.

Given the time necessary to prepare proposals, it will likely take a special session to address them.

The chronic absenteeism crisis, appropriately designated by the Governor, rates one.

Continue reading →

11 Comments

Posted in Attendance, Budgets, Change Management, Courts and law, Crime , corrections and law enforcement, Demographics, Education (K-12), General Assembly, Governance

Virginia Set to Help Taxpayers for a Change

Posted on November 1, 2023 by | 18 comments

from The Republican Standard

Good news for Virginia taxpayers.

In the coming weeks, several hundred dollars are heading back into the pockets of eligible Virginians. Up to $400 per household will be heading to mailboxes and bank accounts across the Commonwealth thanks to a surplus in the state budget recently signed by Governor Glenn Youngkin.

In a media release issued by his office last week, Governor Youngkin stated.

“As Virginians continue to face inflation and high prices as a direct result of policies out of Washington, D.C., these rebates are an important step going into the holiday season to help Virginians keep more of their hard-earned money for gas, groceries, and essentials.”

NBC4Washington also noted that “the taxation department has an online lookup tool where taxpayers can go to see if they’ll receive a rebate.”

If you enjoy having more control over your own dollars, don’t forget to think about the benefits of having leaders in the state that value the taxpayers as you head to cast your ballot in the state and local elections this year.

Republished with permission from The Republican Standard. 

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Posted in Budgets, Economic development, Taxes

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Voters Will Decide Virginia’s Future Direction

Posted on October 25, 2023 by | 58 comments

by Derrick Max

In two weeks, the people of Virginia will decide on two competing visions for the future of Virginia. Will they elect a General Assembly favoring Governor Glenn Youngkin’s more freedom-oriented policy vision, or will they elect a General Assembly returning the Commonwealth to the statist policy vision of former governors Terry McAuliffe and Ralph Northam?

While much of the current debate in the Commonwealth has focused almost solely on abortion, the number of issues “on the ballot” in this election is much broader and ought to be more closely considered by voters. If readers want a deeper dive into these issues, links to the Thomas Jefferson Institute’s work in these areas are included.

Surpluses are on the ballot in Virginia.

Earlier this year, faced with an historic $5.1 billion surplus, Governor Youngkin and Democrats in the Virginia Senate reached a deal to cut $1.05 billion in taxes and allocate $3.7 billion in new, one-time spending. This $3 in new spending for every $1 in tax cuts is backward.

Budget officials in Virginia just reported that in the first quarter of this fiscal year, surpluses are continuing to be amassed in Richmond. Coupled with the official projections for spending and revenue for the next few years, the next General Assembly will almost certainly be faced with large cash surpluses. Continue reading →

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Posted in Budgets, Education (K-12), Elections, Energy, Taxes

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How Pass Through Tax Rules Raid the U.S. Treasury

Posted on October 24, 2023 by | 23 comments

American Institute of CPA’s map of states with a pass through entity tax rule as of this past July.  Many of those that haven’t have no state income tax anyway.  Click for larger view.

By Steve Haner

When the General Assembly was briefed on the state’s financial status last week, the $412 million in unexpected revenue growth was dismissed as potentially misleading because of some new quirk in Virginia tax law called the Pass Through Entity Tax or PTET.  PTET keeps coming up in these discussions.

Approval of the Pass Through Entity Tax in 2022, with some tweaks to the rules in 2023, has indeed scrambled the state’s financial forecasting. Virginia is one of 36 states now offering this tax strategy.  The Senate Finance and Appropriations Committee got a briefing on it October 17.  Before the boring nuts and bolts, here are the headlines.

First, PTET is popularly seen as a way to undermine the 2017 Tax Cuts and Jobs Act’s limitation on the deductibility of state and local taxes (SALT).  If you seek itemized deductions on a federal tax return, the limit for state and local taxes paid is $10,000.  Now that Virginia and so many other states have adopted PTET, the big loser is the federal government.  PTET adds to the federal deficit. Continue reading →

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Posted in Budgets, Business and Economy, General Assembly, Taxes

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Youngkin Team Cautious Despite Revenue Surge

Posted on October 18, 2023 by | 9 comments

Finance Secretary Cummings showed this chart to legislators this week and noted the deceleration in job growth, citing that as another reason he and Governor Glenn Youngkin remain cautious despite strong revenues. Click for larger view.

by Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy. 

Virginia’s state budget grew 90% in the past decade, far faster than in previous decades. After adjusting for inflation and population changes, spending still jumped 4% each year, a high rate of compound real growth.  At the same time, the state continues to see explosive growth in its revenue, pointing to cash surpluses continuing for some time.

These facts emerged from two presentations to the Virginia General Assembly this week.  The Joint Legislative Audit and Review Commission (JLARC) issued its annual report on state spending growth on Monday.  That same day, Secretary of Finance Stephen Cummings reported on the revenue results from July through September, the first quarter of Fiscal Year 2024.

In just those three months, revenue exceeded the revenue estimates by more than $412 million.  Other months, with larger pots of projected revenue, are still ahead.  Should this revenue trend hold, surpluses similar to the historic surpluses of Fiscal Years 2022 and 2023 could result next June.

During the elections two years ago, Virginia’s flush financial condition was inspiring debates about tax reductions and tax reform.  Some, but not all, of the proposals went on to pass.  But with General Assembly elections just over two weeks away, few candidates in either party are promising more tax reform or reduction efforts in the next session. Continue reading →

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Posted in Budgets, Finance (government), General Assembly, Taxes

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Local Government Unions Raise Your Taxes

Posted on October 16, 2023 by | 40 comments

By Chris Braunlich

Subscribers to Netflix will soon see rate increases because of the Screen Actors Guild-AFTRA Hollywood strikes.  Buyers of new and used cars will, as a result of the United Auto Workers strike, see prices go up as supply dwindles and costs rise.

The current spate of labor actions – involving more than 420,000 employees – is a response to higher inflation.  However, it will also drive prices even higher, both through lost productivity and higher costs to pay for higher wages. Continue reading →

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Posted in Budgets, Government workers and pensions, Unions

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Cline, Good, Griffith Outvoted in Bid to Secure Border, Stop CR

Posted on October 3, 2023 by | 167 comments

Rep. Ben Cline, Republican from Virginia’s 6th District

by Scott Dreyer

The federal government’s fiscal year ended September 30, and in what has become a frequent occurrence, the Congress had failed to present a budget for the president’s signature.

In the weeks and days before September 30, many politicians, pundits, and average citizens were debating what would happen and what would be best for the country.

The overall Democrat position was that spending should continue at current levels, including funding for Ukraine’s war against Russia. The thought of a government shutdown was portrayed as a potential disaster that would cut stop salary and relief payments to deserving Americans.

This position is seen in tweets on X, formerly known as Twitter, by Virginia’s two US senators. Sen. Mark Warner (D-VA) on Sept. 27 wrote:  “Extreme House Republicans have no plan to stop a shutdown, forcing millions of servicemembers & federal workers to go without pay. Shutdowns have a terrible human cost. We have to prevent this.”

On September 29, Virginia’s Junior Senator Tim Kaine (D) tweeted: “House Republicans threatening a government shutdown—which would hurt Virginians’ access to basic services they rely on every day—as a form of leverage is cruel and irresponsible. We can and should come together in a bipartisan way to avert a catastrophic shutdown.” Continue reading →

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Posted in Budgets, Immigration, Politics

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DOE Response to Average Teacher Salary Issues

Posted on September 28, 2023 by | 15 comments

by Dick Hall-Sizemore

My article on average teacher salaries must have struck a nerve. This morning I received an answer to my inquiry from the Department of Education (DOE).

In short, DOE disavows any responsibility for the accuracy of the data in the report it submitted to the General Assembly.

The Office of Communications declares, “All data in the teacher salary survey report is based on data certified by school division superintendents. VDOE staff tries to identify as many of the variances as possible and obtain corrections from school divisions within the time-frame available each fall.” Continue reading →

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Posted in Budgets, Education (K-12), General Assembly

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