Category: Government Finance
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Full Conformity Raises $3.6B In First Five Years
Assuming the Virginia General Assembly conforms the state’s tax rules to the IRS code as it exists now, adopting intact the recent federal changes, the state will reap an additional $3.6 billion in revenue over the next five years. Almost $2.5 billion of that will come from personal income taxes, with an additional $1.1 billion…
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State Employees Not Funding Own Retirement
State and local employees, like many of their peers in the private sector, are declining in droves to contribute to their own retirement plans, despite the availability of matching funds, a.k.a. free money which compounds for decades. The Virginia Retirement System has been putting new hires into a hybrid retirement plan that combines a defined…
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Dominion Offers New Investment Option
Dominion Energy has launched a new financing program, Dominion Energy Reliability Investment, that will allow investors to purchase debt issued directly by the company. The offering bears similarities to money market funds in that investors can put in and withdraw money freely. The big advantage is that they earn significantly higher interest rates — 1.75%…
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Signs Virginia Will Keep Tax Reform Windfall
The following is from remarks prepared for a meeting of the Thomas Jefferson Institute in Richmond today. As of right now all the signs indicate that the Virginia General Assembly and the Northam Administration are going to allow the federal tax reform to generate additional tax revenue for the Commonwealth. Some of what the Congress…
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Dillon’s Rule, the RPV and the Marylandization of Virginia
by Don Rippert Doppler shift from red to blue. As recently as 1977 both of Maryland’s US Senators were Republican. From 1993 through 2003 Maryland’s eight US House seats were evenly split between Republicans and Democrats. Today, Maryland’s 10 person Congressional delegation consists of 9 Democrats and a lone Republican. This shift caused Maryland to…
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The Virginia529 Board Should Be Lauded, Not Criticized
State government, local government, universities and independent authorities in Virginia are larded with debt and unfunded liabilities. No one, to my knowledge, has compiled a total inventory of public institutions’ exposure to pension obligations, leases, maintenance backlogs, infrastructure debt, economic development loans, and other long-term obligations. Institutions’ exposure to the vagaries of the economy and…
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A World Awash in Capital
Shifts in the global supply and demand for capital are depressing interest rates over the long term, with momentous implications for investors and borrowers, argues Lawrence H. Summer, former Treasury Secretary under President Clinton and former president of Harvard University. For many years, it has been the conventional wisdom among managers of pension funds, foundation…
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Moody’s Reaffirms AAA Rating. Don’t Get Cocky, Virginia.
Moody’s Investors Service, one of the nation’s three bond rating agencies, has reaffirmed Virginia’s AAA bond rating and stable financial outlook, the Richmond Times-Dispatch reports. Moody’s had issued warnings that Virginia’s hallowed AAA status was looking fragile, due mainly to a sharp draw down in previous years of the Commonwealth’s budget reserves. The Revenue Stabilization…
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Seven Years and Counting…
Medicare’s Hospital Insurance Trust Fund (HI) will be depleted in seven years — three years sooner than forecast previously, according to the 2018 Annual Report of the Medicare Boards of Trustees. By 2026, Medicare Part A, which covers hospital payments, will be running a $52 billion annual deficit, a gap that will increase rapidly in…
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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…
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Most States Use Provider Tax for Medicaid
The pending proposed amendments to the stalled state budget bill, which almost broke the log jam earlier this week, did indeed include not one but two new provider assessments/fees/taxes (you pick the term) on Virginia private hospitals. When both chambers return next week with their “this time we’ll really do something” promises on the line,…
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Will Ghosts Haunt The Senate Today?
If you listen very, very carefully you can hear it: A double whirring sound. It is the sound of the late state Senators Ed Willey and Hunter Andrews spinning in their graves. Four decades ago as Finance Committee chairs they were responsible for establishing the independent authority of the Senate in the state budget process,…
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Medicaid Can Cost Taxpayers Less than ACA Plans
One of the interesting tidbits gleaned from a presentation last week on the Medicaid expansion debate was that with expansion perhaps 60,000 Virginians now enrolled in Affordable Care Act Public Exchange plans will qualify for and switch over to Medicaid. People who have low-enough incomes to qualify for Medicaid are also eligible for subsidies for…
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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…
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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…