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.
If the state media were not mainly loyal Democrat hacks, somebody by now would have called U.S. Senator Mark Warner, D-Technocrat, for his opinion. I double dare any Democrat to see if Warner will come stand on the steps of the Virginia Capitol and claim that this tax change, which they are so proud of, will impose zero harm on Virginia’s economic competitiveness but instead is a good idea. And where is Abigail Spanberger?
In fact, the lack of any other human being standing with the Democrats as they held their news conference in Richmond yesterday spoke volumes. They stand alone. No Republican joined them to sustain the myth that their position is “bipartisan.” Not even an army of those getting all the new money showed up to stand with them.
They have already lost this argument. They are not alone in that.
Not that the Governor and his supporters are helping with their own social media and on-air Faux News campaign rhetoric about “the backwards budget.” He also stayed with his demand for an actual net tax cut way too long, and in fact it was a pipe dream when he floated it in December. The income tax cuts, too, were obviously never going to happen so it just wasted time and energy to keep pretending.
Both sides need to stop the posturing, stop shouting out to their partisans, and sit down to write a budget with the existing dollars under existing tax rules. No real people are listening to their messaging. Only activists think this game is entertaining or useful. The real movers and shakers of Virginia are annoyed, as they bloody well should be.
We have probably reached the point where a negotiated substitute budget cannot be prepared in time for the April 17 Reconvened Session, so the expense and needless drama of a special session is inevitable. Even if all the Governor does is veto the revenue streams he has targeted, the spending side will need to be adjusted to balance, and as the Democrats made clear yesterday, they won’t participate until they have to.
“I’m not going to own his cuts to my budget,” Senate Finance Chairwoman Louise Lucas of Portsmouth is quoted by Virginia Mercury. So make your own choices, madam chair. (And, really, her budget?)
If 2024 also includes a serious, truly bipartisan effort to explore revamping the tax code, that would be a useful exercise. The digital sales tax expansion should be on the table along with a host of other ideas, but options are shrinking. In other legislation, a bipartisan majority has voted to raise the sales tax rate and the Democrats on their own voted to impose a new payroll tax. They should also be vetoed and put back into the poker game that is tax reform. Reach some consensus decisions, and the second year of the new budget could see some changes.
Even after the coming vetoes, unfortunately, the odds are folks on both sides will remain dug into untenable positions for more weeks to come, with dueling news releases and social media posts. We have seen this movie too many times and the ending never changes. Everybody just needs to admit now that a smaller budget with no tax increase and also no tax cut is coming.
Can I get a few amens? Probably not.
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