Category Archives: Taxes

What the 2018 Tax Cuts Mean for Virginia

How will the tax cuts from the 2018 Tax Cuts and Jobs Act impact Virginia households? The results vary considerably by income bracket, according to a tax calculator published by the Tax Foundation. Higher income households, making over $200,000 per year, will get the biggest income tax breaks as measured in absolute dollars and by percentage of income.

But, despite the hand-wringing over the elimination of the tax deduction for state and local taxes, there is only modest variance among high-income households between high-tax Northern Virginia and other parts of the state.

To illustrate the impact by income category, I selected Congressional District 7, which stands at the geographic center of the state and encompasses a range of higher-income suburban households and lower-income rural households. As seen in the table above, there is very little in the tax package for people making less than $25,000 per year. Of course, given the highly progressive structure of the tax code, people making less than $25,000 per year pay almost no taxes to begin with.

The tax act is fairly generous to working-class and middle-income Virginians but most generous to those making over $200,000 per year. If your No. 1 concern is sticking it to the rich, this bill doesn’t do it. In fact, the Tax Foundation data makes the tax act look like a giveaway to the rich — more or less as its Democratic Party critics described it.

Unfortunately, this static analysis obscures as much as it reveals. By eliminating many deductions employed by the wealthy, tax reform should flush considerable income out of tax shelters into the taxable open. One can predict several things: (1) that taxable income will rise, which (2) will induce hysteria among the social justice warriors obsessed about income inequality without appreciating the difference between gross income and net (taxable) income, and (3) will result in higher tax payments than would be predicted by static analysis. If your No. 1 concern is ensuring that the rich shoulder an increasing share of the income tax burden, then such an outcome is entirely possible under the tax plan — although we won’t know for sure until the data comes in.

Another thing that static analysis overlooks is the impact of the tax cuts on the economy. At a minimum, lower taxes will create more disposable income, some proportion of which will be plowed back into the economy in the form of increased consumer spending. If the money isn’t spent, it will be used either to pay down debt (a good thing) or invested (also a good thing). It seems pretty clear that Democrats’ fears of an economy cataclysm resulting from the tax cuts are not being borne out. In the short run, the cuts clearly are boosting the economy. They’re also boosting deficits, however, which does aggravate the long-term problem of endemic deficit spending and make a Boomergeddon scenario all the more likely.

There is some geographic variability in tax cuts for top-earning households ($200,000 and up), as can be seen in the chart to the left, but it is modest. Fears fanned by critics that high-income earners in high-tax districts might be losers do not appear to be panning out in Virginia. Northern Virginia districts 8, 10, and 11 don’t get tax breaks as big as their high-income earners in other districts, but they do get tax breaks. Big ones. If anyone has a problem, it’s Maryland’s 4th and 5th districts east of the District of Columbia. There, top income earners get tax breaks averaging only $9,000 per household. Is that a big enough difference to induce some to move across the Potomac? We’ll see.

Millions More for Medicaid Expansion? Now You Tell Us

One of the conceits of Virginia’s Medicaid debate is that expansion would pay for itself. Uncle Sam would pick up 90% of the cost, leaving Virginia to raise money for only 10%. The Commonwealth would save a few hundred million dollars through reduced funding for prison healthcare, mental health, indigent care funding, FAMIS pregnant women, and other programs. And hospitals would kick in more than $300 million from a provider assessment.

Now we read from Michael Martz with the Richmond Times-Dispatch, the only reporter providing meaningful follow-up to the biggest entitlement expansion in recent Virginia history, that “the work is far from done in expanding access to health care for 400,000 uninsured Virginians.”

It turns out, he writes, that lawmakers and state officials “didn’t include money in the two-year budget to raise Medicaid reimbursement rates for doctors and other front-line health care providers.”

Oops. And how much  money might that be? Supposedly, about $47 million in the second year of the biennial budget to raise reimbursements for doctors to about 67 cents on the dollar to 88 cents.

I’ve been making this point throughout the debate — expanding Medicaid coverage is meaningless if the federally and state-funded health insurance program for the poor pays so little that many doctors won’t take money-losing Medicaid patients. At least, it appears, our legislators did understand the problem even if they didn’t openly acknowledge it. (If they did openly acknowledge it, no one in the media picked up on it.) But now that Medicaid expansion is a done deal, lawmakers and lobbyists are suddenly talking about previously undisclosed liabilities to taxpayers.

“Just because you get insurance doesn’t mean you have access to a doctor,” said Ralston King, vice president of government relations for the Medical Society of Virginia, stating an issue that should have been obvious to everyone but somehow flew under the media radar through months of debate. Finding a way to pay for it is the next challenge, King said. “Right now, we don’t have a funding mechanism.”

Then there’s this from Dr. Todd Parker, an emergency room physician at Riverside Shore Memorial Hospital on the Eastern Shore: “We are encouraged that along with this legislation, given the very low reimbursements that Medicaid provides providers, that legislators are considering ways to increase Medicaid reimbursements and otherwise help physicians who may see increased numbers of Medicaid patients.”

Bacon’s bottom line: So, Medicaid expansion isn’t complete, and ordinary Virginians aren’t finished paying for it. We’ll pay indirectly by means of a $300  million provider tax, some proportion of which will be passed on to patients, and we’ll pay again when legislators figure out where to find another $47 million a year to make Medicaid expansion meaningful by raising reimbursements to a level where physicians don’t treat patients at a loss.

Who even knows if that $47 million number is real? How long it will take to morph into something much bigger? Do the math: About 1.3 million Virginians currently receive Medicaid. Expansion will add another 400,000. Forty-seven million dollars spread over 1.7 million patients equals less than $27 per patient. Do you think $27 a year will raise physician reimbursements from 66% to 88% of the cost of treatment? I don’t.

If you feel hoodwinked by Medicaid expansion — politicians consistently low balling the cost and the fourth estate failing to probe what it would cost the public — you’re not alone. So do I.

State Budget Bacon Bits: Reserves and R&D

And now for the some other interesting elements of Virginia’s new $117 billion two-year state budget, because Medicaid expansion sucked all the wind out of the room (understandably.)  The House Appropriations Committee added this summary presentation yesterday while the Senate members were filling up their Facebook and Twitter accounts with Riveting Speeches before delivering votes everybody expected.

Reserve Funds.  By the end of the 2020 fiscal year, 25 months from now, the projection is for just under $1 billion split between the traditional Rainy Day Fund and the more flexible reserve fund.  To fatten the projected balances, intended to placate Wall Street analysts getting antsy about the state, some scheduled deposits into a water quality fund may be held back.

The Rainy Day Fund is controlled by constitutional provisions and can only be tapped when revenue projections fall short.  The revenue reserve is simply an exercise in legislative and executive discipline but I think is there to protect the state if expenses exceed projections.  It is a subtle point but perhaps important because of hard to predict programs (such as, drum roll, Medicaid expansion.)

R&D Taxes.  It has already been noted that the budget included language to create the hospital provider taxes funding the Medicaid expansion, bypassing the usual legislative process for considering tax bills.  There another tax change buried in there, this one creating a sales tax exemption for research and development expenses at federal facilities.  What I don’t see anywhere in the budget is a provision to capture the savings from eliminating the House Finance Committee, which is obviously now redundant.

The Lottery Is For Education!  Three decades in people still believe that their lottery losings are great for public education.  No, it supplants other tax dollars and does not supplement them. Losing tickets free up a sales tax or income tax dollar for something else.  Because this final bill is so late, lottery profits projections could be increased based on additional weeks of data and see how that is reported.

HAC Staff Note

Yes, the money is now packaged differently and state budgets now include the Supplemental Lottery Per Pupil Amount (PPA). This budget increases the PPA totals with great fanfare.  I remain unconvinced that public education funding would be different if the lottery disappeared, but lower priority items might suffer.  The irony of funding schools with a tax on the mathematically challenged marketed by pretending money isn’t fungible never ceases to amuse.

Teacher Raises.  There is money included to provide the state’s share – and that percentage is very low in some localities – of a 3 percent raise for local teachers.  The raise is not scheduled until the 2019-2020 school year and that may or may not be enough to keep the red shirt protesters away from Capitol Square in coming months.

The approved raise amount for state employees and other state-supported local employees is 2 percent, also scheduled for the summer of 2019, but there is an added two percent for state employees with three years of service.   A cynic might note that scheduling the raises for Year Two keeps the positive headline intact and delivers the raise before the 2019 election, but cuts the total cost in the budget substantially.

My Personal Favorite.  I loved the following bullet point: “$333,333 GF the first year and $381,600 GF the second year pursuant to HB 883/SB 20 establishing a three-year regulatory reduction pilot program (Dept. of Planning & Budget).” Next year we can figure how much it cost us per reduced regulation.

GTT.  I will be back on the blog in a week.  Might hit the Alamo again this time so the following quote came to mind.  We do plan to visit their Capitol.

Wait, A Second Hospital Tax?

For years a Virginia business policy group, the Thomas Jefferson Institute, has been pushing a Virginia tax reform proposal that would impose the sales and use tax on services.  The sales and use tax covers tangible goods, not (with a few exceptions) services.   Looking at the group’s 2015 report on the idea, imposing the sales tax on the broad medical and nursing home industries could generate close to $2 billion per year.

My memory went back to this idea while reading in the Richmond Times-Dispatch this morning that the hospital industry is indeed pushing again for a second “provider assessment” (read:  hospital tax) as part of the ongoing budget debate over Medicaid expansion.   The House of Delegates has included one new tax on hospital revenue to provide the state share of the cost of expanding Medicaid, and the hospitals want to tack on a second tax to increase their reimbursement rate for services.

The idea resurfaced in the Senate staff presentation Monday and then Senate Finance Committee discussions Tuesday.  The committee’s work on the overdue budget has now gone sub rosa for a while so there is no indication this “has legs”, as they say at the Capitol.

The two taxes combined would approach $400 million in 2020. That would be one of the largest tax streams flowing into state coffers, almost half the annual take of the corporate income tax and comparable to the insurance premium and recordation taxes.  The House version of the first provider tax is in effect a sum sufficient provision, meaning the tax will adjust up automatically if required to cover the state’s share of expansion (and the federal share will be shrinking.)

The infusion of major new federal revenue from Medicaid expansion to the hospitals now providing uncompensated care to that population may make it possible for them to absorb any new tax.  In theory the rest of us will be covering for less of that uncompensated care.  And the Thomas Jefferson Institute also helpfully tracks Virginia hospital profits, which grew last year, giving reason to hope customer costs or insurance premiums won’t rise because of the new tax.  The hospitals can eat it, right?  Have any such assurances been made?

But if this is just like every other tax and eventually somebody, somehow has to pay it, why not spread the burden across the entire health care sector by ending the medical sales tax exemption?  The same 1.4 percent tax rate now being proposed might do the trick.  New Medicaid patients will be visiting doctors, out-patient clinics, nursing homes and pharmacies and sending tests to labs.  Many will be in managed care systems – and we want then taking that approach.  If reimbursement rates are to go up, will they go up only for hospitals?  Why should only private hospital revenues be taxed?

Or what if we just ended the non-profit status of so many medical facilities and practices and just taxed their property and profits like any other business?  What if we doubled Virginia’s famously low tobacco products taxes, raising another $170 million for dealing with the health-care consequences of that poisonous habit?

The “third rail” status of the whole idea among most Republicans – including most Republican legislators – has forced this discussion off a rational plane and into a perpetual posturing zone.   A serious tax policy discussion of how to pay for this and what the impact would be on customer costs might or might not end up with these “provider assessments” as the right choice, but there has been no debate.

Wonk Corner:  Briefing on Medicaid Expansion

You have to read the footnotes:  The state estimates that should Virginia approve an expansion of Medicaid to an additional 300,000 low income persons, about 60,000 people now covered by individual ACA plans will revert to Medicaid.

That snippet is buried in a presentation made yesterday to the Senate Finance Committee by its staff, which is a great introduction for the non-experts among us.   Whether and how to expand Medicaid is, of course, the main sticking point which has prevented adoption of a state budget.

And by agreeing to a new hospital tax to provide the state’s share of the cost of expansion, the House of Delegates was able to authorize more spending than the Senate in several other key areas of the budget – all politically popular with somebody, creating a minefield of sticking points.

The hospital tax actually will reduce by 40 percent the financial benefit of Medicaid expansion to many of the hospitals serving that population, and the staff report notes that some hospital leaders are pushing a higher tax in order to increase their fees for Medicaid services to 88 percent of their costs.

The staff’s short list of advantages and disadvantages to the hospital tax fails to even raise the possibility that one way or another ultimate costs to consumers will rise further.  This is a new tax, a tax on a service.  It will be imposed on private hospital revenue from all sources – private pay, Medicare, ACA plans, major insurance carriers or the myriad other choices consumers use.  The tax is not imposed on other providers who will treat these newly-covered patients.

The staff also went through a list of conditions and variations to the traditional Medicaid coverage that Virginia might consider to control costs.   The House of Delegates has opted for a work or job training requirement.  One other option is creating health savings accounts. Right, somebody working in a fast food restaurant has the cash flow to fund an HSA.  Please.

As you will note on slide 15, the Senate has voted to expand Medicaid as well, but with a very limited new caseload.  Majorities in both chambers are on record supporting benefits to people at 138 percent of the federal poverty level, up from 100 percent.

The expectation is that the Senate Finance committee will hash all this out this week and have something to present to the full Senate by May 22.  It is possible unofficial discussions on the final compromise are already going on between some of the leaders in both chambers, but no official conference committee can be named until the Senate actually acts on a full budget.

Revenue Surge May Be Fake News

May 1 is the deadline for Virginia personal income tax returns, but more than 700 very high income Virginia taxpayers skipped the deadline.  As long as they have paid enough tax to cover their liability, they can wait as late as November 1 to file an actual return.

That is one the facts stressed by Virginia Finance Secretary Aubrey Layne today as he reported on Virginia’s potential $400+ million revenue surplus for the fiscal year which ends next month, with an audience full of legislators eager to find revenue to solve their problems.

Problems such as the hundreds of millions of dollars separating the House and Senate versions of the unresolved state budget, also due by the end of next month.   The decisions over Medicaid expansion account for most – but not all – of the differences.  And problems such as the state’s dangerously low revenue reserve, discussed further below.

Layne knows that the state is seeing a sudden surge in revenue, but most of it is coming from taxpayers who make quarterly payments – not the working folks who have dollars withheld from paychecks.  A few hundred high income individuals or couples could account for much of the surge but their payments may be only temporary.  Given the uncertainty over federal tax reform, many of them probably simply paid much larger amounts – and much of that money could be refunded in a few months once the rules are better understood.

It may depend on whether and how Virginia adjusts its tax code in response to the recent federal changes, as I discussed earlier.  Layne said today that if Virginia stands pat on the current rules with no changes, the windfall in revenue could be (still just an estimate) $300 to $500 million.  Nobody in the meeting – neither Layne nor any committee member – piped up with any promise to make things revenue neutral.   Layne did indicate the Northam Administration might not want to keep it all.

Layne’s presentation was first on the agenda as the Senate Finance Committee finally restarted the process of considering the House’s second version of the budget.  The co-chairs, Senators Thomas Norment and Emmett Hanger, stressed early and often that there is still time to get a budget done without doing harm to the operation or reputation of the state and its localities.  The full Senate is not set to return until May 22.

The Secretary’s less cheerful news included this:  Virginia remains one of 16 states which have not seen revenue (adjusted for inflation) return to their pre-recession peak.  Virginia was less than one percent off the peak as of the fourth quarter of 2017, and other states were worse, but that is still a sobering situation in the second longest financial recovery on record.   Layne lays much of the blame for the state’s excessive reliance on personal income taxes (70 percent) and the retail sales tax (18 percent) for the General Fund.   If you set aside the surge in non-withholding revenue, the other sources are slightly above the original estimates – but not to the point that it shows sustainable economic strength.

The state is closely following the Supreme Court’s South Dakota vs. Wayfair case over taxing internet sales, and Layne stated a decision in favor of South Dakota in late June could also produce $280 to $300 million for Virginia.  But the Supreme Court could also kick the issue back to Congress.

And once again he was sharing grim information about Virginia’s comparison with other AAA rated states.  See the chart below.  Virginia’s Constitution allows for a reserve of up to 15 percent of GF revenue but would like to muster 4 percent to calm the rating agencies.   Do not bet the rent money on that happening anytime soon.   Norment spent some of the meeting chastising the news media for feeding concerns about the health of the state’s bond rating, but the final few pages of Layne’s slide show (start on page 19) are all you need to see.

Hospital Tax (No, Assessment!) Central to Budget Dispute At Special Session

I doubt many not directly involved in the ongoing struggle over Medicaid expansion in Virginia have actually read the budget language that is the heart of the argument.  So I have set it out below in full.  This is language included in the House version but previously rejected by the Senate, creating more than $300 million of the revenue discrepancy between the two plans.  The Senate Finance Committee considers it again Monday.

There is the major policy debate over whether Virginia should do as Congress allowed and expand service to hundreds of thousands of additional people. (I think it should.)  Then there is the argument over whether to try to squeeze the state cost share out of existing state revenue, or to create a new revenue source – which the Governor and the House have done with this language.  Set those aside for a second.

The third debate is procedural, because traditionally a new tax would be created by its own bill and enshrined as a general law, and not buried inside the budget bill. Keeping revenue issues out of the budget is a practice which has been ignored in the past, especially for fees, but on previous occasions any tax changes were formatted within the budget as amendments to Title 58. The big showdown in 2004 ended with two separate bills – the budget and an omnibus tax bill.

Creating an entirely new $226 million per year revenue stream with a budget provision is unprecedented.   As you can read for yourself the level of spending going forward may increase the tax rate in future years, without any Assembly action. The final paragraph vests discretionary authority with a federal agency, something else you seldom see in Acts of the Assembly.

Here is the text as it stands right now:


A. Private acute care hospitals operating in Virginia shall pay an assessment beginning on October 1, 2018. The definition of private acute care hospitals shall exclude public hospitals, freestanding psychiatric and rehabilitation hospitals, children’s hospitals, long stay hospitals, long-term acute care hospitals and critical access hospitals. The assessment shall be used to cover the full costs of the non-federal share of enhanced Medicaid coverage for newly eligible individuals pursuant to 42 U.S.C. § 1396d(y)(1)[2010] of the federal Patient Protection and Affordable Care Act.

B.1. The Department of Medical Assistance Services (DMAS) shall calculate each hospital’s “assessment” annually by multiplying the “assessment percentage” times “net patient service revenue” as defined below.

2. The “assessment percentage” shall be calculated as (i) 1.08 times the non-federal share of the “full cost of expanded Medicaid coverage” for newly eligible individuals under the Patient Protection and Affordable Care Act (42 U.S.C. § 1396d(y)(1)[2010]) divided by (ii) the total “net patient service revenue” for hospitals subject to the assessment. By June 1, 2018, DMAS shall report the estimated assessment payments by hospital and all assessment percentage calculations for the upcoming fiscal year to the Director, Department of Planning and Budget and Chairmen of the House Appropriations and Senate Finance Committees.

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Golden Goose to Emerald City: Drop Dead

Seattle homeless person. Photo credit: Crosscut

By Stephen D. Haner

The brief snippet on the telly that caught my attention showed a massive Seattle office building being developed by Amazon, and the report was that construction is slowing because the company might start reducing its footprint and headcount in the Emerald City of Oz due to yet another Occupy Wall Street-inspired tax plan. It is actually called A Progressive Tax on Business, and a Progressive Revenue Task Force created it.

It didn’t take long to confirm the story about the construction project halt, or to gather details about the City Council proposal itself and the national firestorm it has started. The legislation is worth a read for the truly wonky because of the long list of whereas clauses used to justify taxing the gross payrolls of any company with annual revenue above $20 million. In Seattle, gross revenue of only $20 million qualifies you as a little company, apparently, worthy of nurture. One more buck and bam.

The tax amounts to 26 cents per employee-hour, with a goal of extracting $75 million which is supposed to alleviate homelessness with the construction of new affordable housing units. In 2021 it becomes a straight 0.7 percent of payroll.  Moving out of town won’t totally save local businesses from tax. “C. The tax applies to businesses with employee hours worked inside the City regardless of whether the place of business is located within or outside the City.”

My favorite line in the Council’s own advocacy piece for the proposal is: “Why does homelessness seem to be getting worse as the city spends more to address it?” You can’t make this stuff up, folks.

City and county personal income taxes are imposed in several areas of the United States, but I could not find anything comparable to this – an excise tax per hour on every single hour worked by a company employee, janitor or white shoe lawyer.

The tax policy discussion on this writes itself. Of course the 26 cents comes out of the next raise or benefit adjustment the company was planning – it has to.   With so many competitors exempt, it will be hard to raise prices. And as my students can all recite now, businesses do not pay taxes, they get the money from ________ (multiple choice:  employees, customers, stockholders or all of them). Tax employee hours and you get fewer _______ (correct answer:  employee hours.)

But what also caught my eye was the gutsy power-play threat from Amazon. I know many of you will say: This is another message to Amazon to move to a lower tax, business-loving environment such as Virginia. But if Amazon comes, and brings the jobs and investment reportedly attached to HQ2, will anybody be surprised when it starts to throw its weight here, too?

Regarding Prince William’s Computer Tax…

by Stephen D. Haner

The Prince William County Board of Supervisors yesterday voted to maintain a special tangible personal property tax rate on “programmable computer equipment” used in a business, providing a live and real-world example to continue our discussion on tax preferences and other incentives used to lure and keep businesses.

The general personal property tax rate in Prince William County is $3.70 per $100 of value, with the value basically set as the purchase price. Individuals pay the tax on cars, trailers and boat, but businesses pay annual property taxes on just about all their tangible goods -– furniture, art, machinery and tools, etc.  State law says that the tax rate on business property cannot exceed the rate on personal property (and that all by itself makes Judge Dillon a hero in my book).

About twenty years ago the leaders of Prince William, seeking to lure the computer industry (and I bet the industry proposed it first), lowered the tax rate to $1.25 on computer equipment. As far as I can tell the provision is uniformly available to any and all businesses with computers, which these days is about all of them. But of course it has proven very attractive to the data center industry.

This became news because Corey Stewart, the chairman of the board and a U.S. Senate wannabe, proposed ending the special lower tax rate, in effect tripling the tax on all the business computers in the county. He further proposed to use all of the additional revenue produced thereby to finance a modest reduction in the real estate tax rates – something he then advertised to the voters (oops, taxpayers) in a county-financed mailer.

I just noticed Jim’s post on Amazon. The competition for tech investment, of course, provides a huge additional headwind to Stewart’s idea. But here’s my take on the proposal, and feel free to challenge me.

As long as the county had made no explicit promises to data businesses as they located or expanded in Prince William, it is fair to question whether the preferential rate should be permanent. Prince Williams’ general property tax rate is still lower than that of surrounding localities. And it already automatically depreciates the cost basis behind the tax, so as an asset ages the tax bill goes down.

Stewart’s big mistake was to use the additional revenue to lower the real estate tax by a penny, a proposal that smacks of political pandering (in an election year, imagine that). Republicans who complain that businesses pay too few taxes are in vogue these days.

It would have been so much more effective and fair to propose to lower the overall tangible property tax rate instead, especially to set a slightly lower rate for all business property. After all, individuals still get part of their car tax paid by the state (the Gilmore Switcheroo), but the full tax falls on any business vehicle. Trade a specific preference for one favored investment for an incentive for all investments.

Good Idea: Set Priorities for Land Conservation

Virginia Conservation Land Statistics. Table credit: Department of Conservation and Recreation

Through tax credits for easements, land acquisitions for parks, and other means, the Commonwealth spends millions of dollars every year to conserve land. Under a new policy adopted by the Northam administration, the state will focus resources on safeguarding land with the highest conservation value.

This new strategy will rely upon a “data-driven process” devised by the Department of Conservation and Recreation (DCR) to rank conservation value. The “scientific analysis” will show where the Commonwealth can get the most conservation value for the buck.

“I believe that we need a land conservation strategy that is focused and targeted toward making measurable progress on our natural resource goals, from restoration of the Chesapeake Bay to providing resilience against sea level rise and other impacts of climate change,” said Governor Ralph Northam in a press release.

The administration said it first will prioritize permanent protection of the top 2% of lands with the highest conservation value and aim for protecting the top 10% within the next ten years. Priorities will include: “protecting watersheds and local water quality, securing and recovering wildlife populations and habitats, making sure agriculture and forestry are viable and sustainable, steering development away from vulnerable and disaster-prone areas, providing access to the outdoors, and preserving sites that represent the history of all Virginians.”

The DCR website “Virginia Conservation Lands Database” page notes that of Virginia’s 25.27 million-acre land area, more than 4 million acres, or 16%, has some form of protection. The main vehicle for preserving lands at present is the land preservation tax credit for up to 40% of the value of donated land or conservation easements. Taxpayers were able to use up to $20,000 per year in 2015, 2016, and 2017, and $50,000 per year in subsequent years.

Bacon’s bottom line: This makes total sense. Indeed, I recall having advocated a priority-setting process at some point in the past. If the state is going to hand out tax credits, which are the functional equivalent of budget expenditures, it should optimize the public value of the easements. It’s astonishing to me that it has taken so long to develop a methodology for ranking the easements, but I’m glad it has finally happened. Kudos to the Northam administration for bringing the program to fruition.