Category Archives: General Assembly

The Budget Do-Over: A Game of Chicken?

by Jock Yellott 

Speaking off-the-cuff at a Charlottesville/Albemarle Bar Association lunch on April 18, 2024, Senator Creigh Deeds offered some pointed remarks about Governor Youngkin.

The Governor and the General Assembly had just the day before agreed to scrap the budget and the Governor’s proposed amendments and start over from scratch in May, averting a crisis. 

Youngkin’s more than 200 proposed budget amendments are evidence of a CEO mentality, Deeds observed. Compared to other governors the Senator has worked with, this one seems disengaged from the political process.  

Senator Deeds told his lawyer colleagues he anticipates that in May the General Assembly will vote essentially the same budget.  

Consider the implications of that.

To me as an outsider it had looked like the politicos starting over in a spirit of cooperation, this time with more realistic expectations. I was not alone in this: Steve Haner hoped they’ll “finally sit down like adults and negotiate the budget.”

Maybe we were naïve. Continue reading

State Legislatures Control Budgets — Virginia’s More Than Most

Virginia General Assembly Building (new)

by David J. Toscano

For over a month, Virginia’s legislature and governor have been embroiled in a “two scorpions in a bottle” fight over the new biennial budget, which must be passed by June 30, 2024, to fund the government. Last Wednesday, each of them loosened the cork in the carafe. After Assembly-initiated discussions with the governor, Virginia leaders showed, for one moment at least, how the commonwealth operates differently from Washington, D.C. Rather than force Youngkin to take the political hit from vetoing the first Virginia budget in recent history, the House of Delegates used an unusual procedural move, and killed it themselves. All sides committed to producing a new budget and to return on May 15 to pass it. As Churchill once said, “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”   

Budget battles in the commonwealth are not unusual, but this one has been unique, both in the number of changes Republican Gov. Glenn Youngkin proposed to the bipartisan spending plan, and in the rhetoric that has accompanied the process. Youngkin called the bill a “backward budget” and traveled the state on this theme. Legislators fired back, did their own tour, and likened Youngkin’s actions to “what spoiled brats do when they don’t get what they want.”

Last Wednesday, both sides returned to Richmond for the “reconvened” or “veto” session. The governor had vetoed a record number of bills, including measures to protect reproductive rights and enhance gun safety. Since overriding a veto requires a two-thirds vote, the governor was successful with every veto.

The fight over the budget bill is different. Youngkin, like governors in 44 states and unlike our U.S. President, has the power to “line-item veto” specific provisions in the budget. His targets were thought to be a tax on digital services he originally proposed and language that requires the commonwealth to rejoin the Regional Greenhouse Gas Initiative (RGGI). But he abandoned this approach when legislators shrewdly drafted these provisions to make a line-item veto legally problematic.

It does not matter whether you are a Republican or Democratic governor; legislative power is clear in the budget process. Several years ago, Governor McAuliffe learned how crafty legislative budget writing can frustrate key executive goals. The governor hoped to expand Medicaid through the budget, but Republican leadership was resistant, and explicitly included language in the budget to prevent it. McAuliffe attempted to line-item veto that provision, only to have House Republican leadership opine that the Governor had no such constitutional or statutory power to do so. When it comes to the budget, legislators enjoy proclaiming “governors propose; the legislature disposes.” Continue reading

Ready for Taxes on Netflix, NFL Sunday Ticket?

By Steve Haner

After a month of unproductive political theater, Virginia’s leaders will finally sit down like adults and negotiate the budget. Better late than never.  The message is “everything is back on the table,” which leaves the door wide open for the tax increase central to the Democrat’s demands. That deserves a quick no.

At this point, Virginians do not pay sales tax on their Netflix, Disney, or sports streaming package subscriptions. That is what they want to tax now. If you just paid an online vendor to file a tax return, next year a sales tax of up to 6 or 7% will be added to that bill. Likewise, any annual subscription for Microsoft Office or One Drive storage, or for an internet security system, will be taxed.

Substack will be taxed. Some online news and opinion streaming options will probably be protected by the exemption for newspapers, but others will not. That will be a fun dispute for the Tax Department to broker, one of many new rules to work out.

Did you pay to play that new movie on Amazon using bill credits you had built up? Will tax be added to that, as well? Or will the entire Prime membership trigger a tax? The whole idea is rife with questions and unintended consequences, even more so for the application of the tax to digital goods and services in the business realm.  Taxing business purchases produces the big revenue. Continue reading

Will Democrats Shut Down State Over Tax Hike?

By Steve Haner

The fight that is about to occur at the Assembly’s reconvened session on Wednesday is entirely about taxes, not about spending.

An analysis of Governor Glenn Youngkin’s proposed compromise budget – done by the Democrats’ favorite financial bean counters, not by conservatives – confirms his budget comes extremely close to the spending levels Democrats approved at the end of the General Assembly.  The gap compared to the $188 billion overall budget is little more than a rounding error. Continue reading

Utilities Will Gamble on Nukes With Your $$$

Artist rendering of VOYGR™ SMR plants powered by NuScale Power Module™

By Steve Haner

Standing firm against raising taxes is a fine thing, but it would help if Virginia’s leaders also stopped using people’s electricity bills to fund rent-seeking energy speculations.

Governor Glenn Youngkin (R) has tweaked, but not vetoed, pending bills that allow both of Virginia’s investor-owned utilities to charge ratepayers for power plants that may not be built. The dream projects involve small modular nuclear technology, proven in military applications but so far speculative for commercial generation. Continue reading

Governor Leaves Consistency and Principle Behind

Playing a “skills game”. Photo credit: Virginian Pilot

by Dick Hall-Sizemore

With his proposed amendments to legislation regulating “games of skill,” Gov. Youngkin has demonstrated deep inconsistencies, if not outright hypocrisy.

Before getting into the specifics, a little background is needed.

“Games of skill” are machines on which people can play and win money. The proponents of the machines claim that some element of skill is needed to win. The opponents claim that the machines are not that different from slot machines, in which pure luck is involved. Not having played any “games of skill,” I am not going to offer any judgment on this argument.

Skill games are present in many, if not most, convenience stores, truck stops, and even some sit-down restaurants, such as the Kelly’s Tavern franchise in Virginia Beach. The machines themselves are owned by large corporations, mostly from out of state. The owners of the venues receive an agreed-upon share of the revenue generated by the machines. The revenue can be significant and many of the businesses have come to depend on it. Continue reading

Jefferson Institute’s Hit List Bills Mostly Gone

By Derrick Max

Monday was not just the near total solar eclipse in Virginia, but also the deadline for Governor Glenn Youngkin (R) to act on the budget and the remaining bills on his desk. As our Steve Haner wrote, in “Governor’s Budget Compromise Eclipses Fears of Stalemate,” we are generally positive about the approximately 230 budget amendments Governor Youngkin made.

The Governor sacrificed two-thirds of his spending priorities while giving Democrats almost all of theirs. He did this while removing any tax increases from the budget and forgoing all of his recommended tax reforms (reductions). This was more than a good faith offer and should be embraced by any member of the General Assembly, Democrat or Republican, serious about getting a budget compromise passed before the end of the fiscal year.

Just before midnight on Monday, Governor Youngkin acted on the last of the 1,046 bills he had been sent this legislative session. The final tally: he signed 777, proposed amendments for 116, and vetoed 153. He will have a second chance to veto bills where his suggested amendments are rejected.

While I am sure much will be made of the record number of vetoes, Democrats in the General Assembly opted to send a wish list of bills to the Governor that they knew would never get his signature. Nor would some have even passed the muster with previous Democratically controlled General Assemblies or liberal Governors around the country. This is due, in part, to the retirement or defeat of the more moderate members of the Democratic caucuses in the General Assembly. Continue reading

Youngkin Kicks the Can Down the Road on Affirmative Action

by Jock Yellott

By partisan votes, the Democrat controlled General Assembly presented Republican Governor Youngkin with HB 1404, mandating affirmative action in Virginia government contracts.  

Bacon’s Rebellion published a piece that listed the bill as a veto candidate. One of those that would “have the greatest negative economic impact on the Commonwealth.”

But instead of a veto, at the 11th hour on Monday April 8, 2024 Governor Youngkin proposed amending it.

The amendments would postpone its effective date for a year — if reenacted by the General Assembly. Meantime, let’s have more “input.” Continue reading

Compromise Budget Can Eclipse Stalemate

Gov. Glenn Youngkin

By Steve Haner

Governor Glenn Youngkin (R) is offering a compromise on the disputed state budget that gives Virginia’s Democratic legislators most of the spending they were initially demanding, especially for local schools and early childhood education. The Governor is also offering a quick path to a resolution that avoids additional months of budget stalemate and political division.

“On a day when Virginians were thrilled to witness an 80% eclipse of the sun, they should also cheer a budget compromise where a Republican governor moved about that far in the direction of meeting the Democrats’ stated goals without added taxes,” stated Derrick Max, President of the Thomas Jefferson Institute. “This is a more than reasonable good faith offer, recognizing that in a divided government, compromise is key.” Continue reading

Will Consumers Come First in VCEA Review?

FERC Commissioner Mark Christie of Virginia

By Steve Haner

“If we always keep as our focus what is best for consumers, in getting them reliable power for the least cost, then I think that’s the main guidepost we ought to follow.”

That was Federal Energy Regulatory Commissioner Mark Christie’s opening quote on a PBS broadcast on energy issues due to air April 9, but the 26- minute program can already be found on the network’s website and Christie distributed it via X today. Continue reading

Proposed Tax for Leave Pay Guaranteed to Grow

From tiny acorns, massive tax-fed government benefit programs grow. Case in point, the pending Virginia paid leave bureaucracy.

By Derrick Max

Sitting on Governor Glenn Youngkin’s desk is a paid family and medical leave bill that would provide eight weeks of paid leave per year for most employees in the Commonwealth. The program would pay employees 80 percent of their weekly salary up to an amount equal to 80 percent of the regional average salary for their qualified leave. Interestingly, teachers, state employees, and constitutional officers are not covered under this program — presumably, these employees already have paid leave benefits and the General Assembly did not want to tax their allies. Continue reading

Max: Youngkin Right To Veto Minimum Wage

By Derrick Max

There is a near-universal consensus among economists that increases in the minimum wage harm low-skilled workers the most. Originally designed to mimic racially discriminatory laws elsewhere, the minimum wage continues to be a means of picking certain classes and geographic locations over others. For example, the minimum wage benefits the high-cost-of-living areas in the Northeast over the lower-cost-of-living areas in the South. Continue reading

Call the Governor a Spoiled Brat? That’ll Work!

Not a visual that communicates the Democrats are leading an army in this fight. It screams loneliness.

By Steve Haner

A senior Democrat on the Senate Finance Committee just called the Governor of Virginia a spoiled brat, which of course became a headline. Is everybody getting the nonsense out of their systems? It is time for the grown-ups to intervene or we will be stuck in a stupid loop until July.

The state budget as it passed a few weeks ago will not stand. Governor Glenn Youngkin (R) will either impose line-item vetoes that drastically reduce the available revenue, or he will veto the entire $188 billion document. He has sufficient votes behind him to sustain those vetoes.

That Governor Youngkin would never accept an expansion of the sales tax to digital items on its own, without compensating tax reductions of some sort, has been obvious throughout this process. Democrats knew that. Expanding the tax to cover a host of business-to-business transactions, as well, was an intentional act of political arson by the Democrats. They knew all along it would never stand. They are begging for a veto for reasons hard to fathom.

Think back just one year, just one single year. Can anybody imagine Fairfax Democrats Richard Saslaw or Janet Howell building their budget on a tax proposal that has the Northern Virginia technology industry on the warpath? Can you see them proudly touting an effort to, as I put it earlier, kill the digital goose for its golden egg? These are not only not our fathers’ Democrats; these are not 2023’s Democrats. Continue reading

Climate Change Wars Coming to Virginia Schools?

You have to click on the illustration and expand it to even see the percentage of carbon dioxide from human activity in our atmosphere. A new lesson plan in waiting?

By Steve Haner

Young Virginians are not getting enough instruction on the deadly existential threat of climate change from the news media, their favorite social media sites, Hollywood productions and President Joe Biden’s campaign stump speeches. Virginia’s General Assembly Democrats are demanding that the public schools double down with a wave of new classroom materials.

The curriculum wars at the State Board of Education and in local school board meetings may now move on to a new topic if Governor Glenn Youngkin (R) signs House Bill 1088. The bill is ripe for a veto, having received support from only one Republican legislator out of 68, but after the first 100 or so vetoes, Youngkin’s veto pen may tire.

Should he sign the bill, do not assume the process will go as the patron (Delegate Betsy Carr, D-Richmond) intends. In fact, if the bill is followed to the letter, the resulting materials probably will not be to her liking. The text is short:

A. The Board shall make available to each local school board instructional materials on climate change and environmental literacy that are based on and include peer-reviewed scientific sources.

B. The Board shall develop, adopt, and make available to each local school board model policies and procedures, based on peer-reviewed scientific sources, pertaining to the selection of instructional materials on climate change and environmental literacy, including a requirement for any such selected material to accurately portray changes in weather and climate patterns over time, the impacts of human activity on changes in weather and climate patterns, and the effects of climate change on people and resources.

Continue reading

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