Category Archives: Budgets

The Virginia State Budget and the Rising Costs of Registered Nurses

by James C. Sherlock

I was asked yesterday by a reader about the relationship between nursing homes, rising registered nurse salaries and the new Virginia budget agreement.

Good questions. Virginia’s workforce includes nearly 70,000 registered nurses.

The state pays its workers, but it also pays its Medicaid share for private sector nurses. Pay for private sector workers is based upon market conditions. The market wage for registered nurses nationwide increased dramatically during COVID.

Perhaps the only good thing to come out of that mess was that registered nurses, of whom Virginia has 11% fewer than demand calculated by the federal Health Resources and Services Administration, got very large pay and bonus raises, and the new wage points appear to have stuck.

If the laws of economics work here, that will over time increase the number of nurses if we can educate and train them in the required numbers.

The latest figures from the Bureau of Labor Statistics for all states show that the median wage for an RN in Virginia was $79,700 a year. In Northern Virginia portion of the D.C. metro area, the median was $92,800.  The underlying data are a couple of years old.

Wages and bonuses can vary a lot among Virginia hospitals, nursing homes, home health agencies, nursing school staff and government employees, and are higher or lower depending on specialty. The private sector offers $10,000 to  $20,000 signing bonuses paid out after the first year.

Employers of course must pay payroll taxes and other expenses related to employees, and thus their costs will generally exceed $100,000 per RN.

Virginia RNs are still underpaid compared to national figures. The mean annual wage for America’s 3 million registered nurses in May was $89,010 compared to Virginia’s $79,900.

The federal Centers for Medicare/Medicaid Services, aware of some of the questionable business models of bad actors in the nursing home industry, published last week a proposed rule to both increase the minimum number of RNs in nursing facilities and to require all nursing facilities to reveal every year how much of the Medicare and Medicaid payouts go to salaries and related expenses.

So, Medicare and Medicaid costs will go up yet again. Continue reading

Which Virginia Taxes Have Grown and How Much

Click for larger view.

By Steve Haner

What a difference just four years has made in Virginia’s financial condition, with the state’s General Fund tax revenue having increased 31% during the period and its Commonwealth Transportation Fund revenue increasing by almost 36%. This is comparing the annual results for the fiscal years ending June 30, 2023, just released, and the same summary for the year ending June 30, 2019. Continue reading

Virginia’s Balance Sheet is Embarrassingly Strong

Virginia is floating on a sea of unspent cash, but tax relief fails again.

By Steve Haner

“Our balance sheet couldn’t be stronger…this is our moment to soar.”

So said Virginia Governor Glenn Youngkin Wednesday. Every year, our governors come to the legislature to report on the end of the fiscal year financial result, and often they say something like that. They always prefer to bring a happy message over one of caution or doom.

This time, however, it is true. Continue reading

Virginia’s Schools Really Do Need More Money

by Suzanne Munson

Recent General Assembly debates about state budgets open a cornucopia of questions about the future of education in Virginia — charter schools, lab schools, vouchers, funding for religious schools? Now might be a good time to examine some background about public education in Virginia.

Thomas Jefferson proposed the state’s first legislation in support of universal education, for rich and poor alike, in 1779. He viewed pubic education as necessary for an informed, successful democratic republic: “If a nation expects to be ignorant and free, it expects what never was and never will be.”

As school funding involved tax dollars, well-to-do Virginia legislators ignored Jefferson’s appeal for decades. Meanwhile, our neighbors to the north were educating their populace. It would take a Civil War and its aftermath for this state to develop a nascent system of public education.

Today, Virginia’s school divisions across the board receive 14% less funding from the state than the 50-state average, equal to about $1,900 less per student. This is neither admirable nor sensible, if we are to have a successful economy, students trained for challenging work, and an informed electorate.
Continue reading

Cruise Subsidy More Important Than Tax Relief?

What is this cruise ship doing in a story about Virginia’s budget and tax fight? Read and learn.

The Richmond Times-Dispatch has obtained and released the most recent negotiating offer from Democrats in the Senate as the standoff between the two political parties over the state budget continues.  It is contained in an on-line article that doesn’t appear to have made it into the print edition yet. Continue reading

Virginia’s New “The Stupid Party”

by Chris Braunlich

From the ‘50s to the mid-‘70s, the Republican Party was known as “the stupid party” – locked in the past, making foolish decisions, promoting unwise and counterproductive policies.

Today, in Virginia, “the stupid party” has returned. But it is no longer Republican.

The current battle over Virginia’s budget and the prospects for tax reduction and reform affirms the Left’s governing philosophy: what the government has belongs to the government and what the taxpayer has is negotiable.

With a $5.1 billion surplus exceeding the last fiscal year’s projections, Governor Glenn Youngkin proposes to return $1 billion — less than 20 percent — to the taxpayers from whom it came, in the form of permanent rate reform. He would spend the remainder on education, behavioral health, law enforcement and other projects. Senate Democrats, on the other hand, want to spend all of it, offering, at best, a one-time rebate giving them “first dibs” on future excessive tax revenue. Continue reading

JLARC Report: More Than Just “Mo’ Money”

Photo credit: Va. Dept of Education

by Dick Hall-Sizemore

The Joint Legislative Audit and Review Commission (JLARC) released a major report last month on the Commonwealth’s K-12 funding formula. The responses were predictable.

On Bacon’s Rebellion, Jim Bacon dismissed the report as a cry for “mo’ money.” Democrats in the General Assembly seized upon the report and its findings as more ammunition in their fight against Governor Youngkin’s effort to cut taxes further.

It is true that the report concludes that the state needs to provide more funding for K-12. However, the report is much more than that. In the report, JLARC documents serious deficiencies in the formula that is used to calculate funding for K-12. It then proposes some significant changes that could be made that would improve the funding system. The report deserves a deeper look on this blog than it has received. Continue reading

Paid In Full, State Needs to Give Us Our Change

By Barbara Hollingsworth

Imagine a merchant refusing to hand over the change when a customer paid with a $20 bill for a $17.50 item. Virginians would be irate if a restaurant, bar, grocery store, or other private establishment decided to keep the change because the business might “need” the extra money in the future. Yet the Virginia General Assembly is attempting to do the same thing on a much larger scale.

The latest preliminary figures from the Virginia Department of Revenue put the current general fund budget surplus at more than $5.1 billion for fiscal year 2023, which ended June 30. This is more than double the $1.94 billion surplus the commonwealth posted in 2022. This huge surplus is money left over after every single item in the state budget was fully funded under the amended 2022 Appropriation Act, including education, health and welfare, transportation, public safety, and every department and program funded with state tax dollars.

This unprecedented revenue surplus was largely due to higher-than-expected payroll withholding of individual income taxes (which are still not indexed to inflation), as well as corporate and sales taxes.

In other words, Virginia taxpayers were overcharged $5.1 billion over the past two years and $3 billion more than the commonwealth’s own 2023 revenue forecast. And yet some members of the General Assembly, all of whom are up for re-election in November, don’t want to give any of it back. Continue reading

Restoring Sales Tax Holiday is Not Tax Relief

by Steve Haner

Virginia’s Democratic legislators are convinced that citizens are happy to pay taxes for state services and will rebel at the polls if taxes are cut when there are “unmet vital needs.”  That is why they have so far resisted any and all proposals from Governor Glenn Youngkin and Republican legislators to split the state’s fat cash surplus between tax relief and more spending.

So, why are those same Democrats not applauding the 2023 General Assembly’s failure to extend the state’s previous pre-school sales tax holiday? Shouldn’t the voters be happy to pay more for school supplies and clothes since the schools need the money? Instead they are joining the scramble to reinstate that tax break, open to all taxpayers, rich and poor.

The good news is the Assembly’s incompetence (or was it an accident?) in letting the sales tax holiday lapse is providing another prod to keep Democrats at the table for tax policy discussions. Frankly, from a tax policy purist point of view, these tax holidays are not good policy, but they are wildly popular.

That is because the sales and use tax is one people can see at the checkout counter. If you are saving $6-$7 on a Target run or Amazon bill, you notice. The other tax cuts under discussion – a higher standard deduction, a tweak to the income level that triggers the top income tax rate – only come up at tax-filing time, and if you use a computer program or outside accountant to file, you may never notice.

The bad news is that now the General Assembly can come together and fix this oversight (if it was an oversight) and claim a victory for taxpayers. They will claim a bipartisan victory over something that leaves those taxpayers exactly where they were a year ago, no better off at all. From the beginning, the claim that nobody had put the sales tax holiday on the Assembly’s radar during the session has lacked credibility. If so, retailers need new lobbyists. Continue reading

Senators Cry “Voodoo Estimating” In Tax Fight

By Steve Haner

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

Not only are the leading Virginia Senate budget negotiators adamantly opposed to providing Virginians with additional tax relief in this election year, but they are now hinting at partial roll back of one of the major individual tax reforms approved just last year.

When the 2022 General Assembly approved a major increase in the standard deduction used by most Virginia taxpayers, it applied a condition — that the underlying General Fund revenue had to continue to grow at least 5% in both fiscal years 2022 and 2023. If it did not, the standard deduction for that year would be reduced again. The revenue growth would be adjusted for the tax cuts, so the target was 5% growth before the revenue reductions those caused.

Meeting that trigger target for FY 2022 was easy in that year’s overheated economy. Last week Governor Glenn Youngkin’s administration certified that the second target was also met, meaning the full standard deduction also applies for this tax year. The goal was barely met, with growth of 5.1%, leading Democrats to accuse the Department of Taxation of “voodoo estimating.”

The accusation against the usually-trusted tax staff was reported in a Richmond Times-Dispatch article. It failed to address whether the Democrats plan to act on their suspicions, but why complain otherwise? If they fight to certify the target was missed, and win, the standard deduction for a married couple filing jointly will drop by $1,000 and their tax bill will rise $58. A key Democrat dismissed it as “less than $30,” but that is for an individual. Continue reading

Youngkin Budget Leadership Faulted

David Toscano

by Dick Hall-Sizemore

This blog gives ample exposure to conservative bloggers Kerry Dougherty and Shaun Kenney, but not to bloggers with other perspectives.

David Toscano of Charlottesville, former Democratic floor leader in the House of Delegates and the author of a book on recent Virginia politics, regularly comments on Virginia politics, which is available to anyone who subscribes (free) to his e-mail list.

Here is his latest in which he takes Governor Glenn Youngkin to task for a lack of leadership on Virginia’s budget.  He contrasts Youngkin’s passive approach to the active approach of Mark Warner in somewhat similar circumstances.  Regardless of what one thinks of Toscano’s views on various policy issues that he lists in the commentary, it is hard to argue against the proposition that Youngkin has been absent in the budget negotiations.

More Money for an “Indecipherable” K-12 Funding Formula?

by James A. Bacon

Virginia public schools receive less funding from the state than the 50-state national average, less than the Mid-Atlantic regional average, and less than three of the five bordering states, says a new report from the Joint Legislative Audit and Review Commission (JLARC). The state needs to radically update its methodology for calculating Standards of Quality (SOQ), a measure of staff and other inputs that sets the bar for state funding. Adopting all of JLARC’s recommendations would cost taxpayers $1 billion in near-term funding and more than $2.5 billion longer-term.

Democrats and media allies immediately used the JLARC report to claim that Virginia schools are “underfunded.” As Axios Richmond puts it: “Virginia is cheaping out on public school funding compared to most other states.” Then there was this from House Minority Leader Don Scott Jr., D-Portsmouth: Virginia’s GOP “would rather fund corporate giveaways” than students’ education.

Republicans pushed back. Secretary of Education Aimee Guidera and Superintendent of Public Instruction Lisa Coons noted that the report omitted the last two fiscal years, in which Virginia has funneled an additional $3.2 billion in state aid to public schools. More to the point, they contend, without major reforms such as raising educational standards and improving reading competency in elementary schools, “investments in K-12 funding likely will not translate into improved student outcomes.” Continue reading

Governor, GOP Not Selling Their Tax Reforms

Time’s A-Wasting.

by Steve Haner

The following paragraph was written five months ago. It is reproduced now with some emphasis added.

The 2023 Virginia General Assembly tax debate is just another revival of an old political show. Last year it ended well for new Governor Glenn Youngkin (R) and for those hoping to pay less in state taxes.  This year is not guaranteed to see the same outcome, not unless there is a late push to engage public attention as the House and Senate seek compromise.

Continue reading

VRS “Diet COLA” Squeezes Pensions Second Time

by Steve Haner

Virginia’s “Diet COLA” approach to calculating annual inflation increases to Virginia Retirement System pensions has constrained the increases once again.  Beneficiaries will see a benefit increase of 5% effective July 1, up from the 3.85% increase they received a year ago.

Both are below what they would have been if the increase had simply matched the full annual change in the consumer price index. The CPI-U measure of inflation for the calendar year 2021 was 4.7% and for 2022 was 8.0%.  The compounded rise was 13%.  But instead of rising those amounts, the VRS retirement benefits will have risen less than 10% over two years.  (Those figures have been corrected since the initial posting.)   Continue reading

Without Full $1B Tax Cut, Let July 1 Deadline Pass

by Steve Haner

Because the federal government cannot operate without constantly borrowing money, members of Congress in both parties recently held their noses and voted for a compromise budget and borrowing deal. That need not and should not happen now in Virginia.

There is no similar pressure in Virginia, even though the June 30 end of the state fiscal year approaches. Virginia has a viable, fully balanced budget that runs through June 30, 2024. The stalemate underway involves only unadopted second-year amendments.

Governor Glenn Youngkin and the House of Delegates should insist that any amendments to that new fiscal year budget include every dollar of tax relief they approved earlier this year. None of the spending increases approved by either the House or the Virginia Senate should be included unless the full amount of tax relief accompanies them.

If the July deadline passes with no action, with no agreement to couple tax cuts with spending increases, Virginia’s Republican legislators will have accomplished what their colleagues in Washington failed to do (and in fairness couldn’t do). They will have stood firm until the taxpayers received the same level of consideration as those who consume those taxes.

The real decision deadline is Election Day in November. Continuing the stalemate would give the voters a clear choice between the House vision of tax relief coupled with reasonable spending growth, or the Senate vision of mainly higher spending and zero tax relief. Continue reading