Bacon's Rebellion

Democracy Thrives in Sunlight

State Revenue Up a Full Third in Northam Years

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by

Steve Haner
in , ,

Departing Secretary of Finance Aubrey Layne

by Steve Haner

With one month to go in its fiscal year, Virginia has almost met its General Fund revenue target in the first eleven months, as the revenue bonanza described here before continues. Partly it is due to the strong economic recovery post-COVID, but it is also due to numerous increased tax rates or policy changes under Governor Ralph Northam.

With 11 months of the basic taxes now accounted for, the state has collected just a hair under $22 billion towards the $22.3 billion it estimated in the budget adopted last year and amended this winter. Compared to the same point four years ago, total GF revenue has grown a full one-third. With the deepest recession of the past century in between the comparison points.

The final numbers for June, which ends the fiscal year and may not be public until August, may change these trends, but only a bit: Sales and use tax collections are up 25% over four years, personal income tax collections are up 32% over four years, and corporate income taxes are up 91%.  The underlying inflation for that period is about 9%, so the real growth is tremendous.

The data comes from the monthly report released today, both a letter and the usual tables. It is a swan song for Secretary of Finance Aubrey Layne, who leaves at the end of the month to become a senior vice president at the Sentara medical operation in Hampton Roads.

His deputy, Joe Flores, will move up to become secretary for the remainder of the Northam Administration. Flores is well known around Capitol Square, having served 12 years on the staff at the Senate Finance Committee and then as a deputy secretary for Health and Human Services. Medicaid and other medical programs are huge cost drivers for the state.

His new deputy will be Carter Hutchinson, moving over from the Governor’s policy staff and having been a campaign policy adviser to both Northam and before that Terry McAuliffe. He has not worked outside the Office of Governor.

Layne breaks the show business rule of “always leave them wanting more.” More of his service to the Commonwealth would be welcome, certainly, but more money is not required. The end-of-year surplus announced in coming weeks is going to blow off the roof, just about the time the General Assembly is fighting over how to spend more than $4 billion in American Rescue Act money.

At the same point four years ago, as Governor Terry McAuliffe was wrapping up his term, the end-of-year surplus was all of $136 million. We might be adding a zero to that next month. Layne told the Richmond Times-Dispatch earlier today (read it here) it ought to exceed $1 billion. Then the question becomes, how much can the underlying budget grow for Fiscal Year 2022?

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47 responses to “State Revenue Up a Full Third in Northam Years”

  1. John Martin Avatar
    John Martin

    this admin has done a great job with money management. Bummer to see Aubrey go……….smart guy

    1. Stephen Haner Avatar
      Stephen Haner

      Yep. I don’t know Flores as well, but he’s been working his way up the pipeline.

  2. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    How times change! During a period of the Warner administration, I remember Ric Brown saying they were sometimes afraid to open the mail because the cash flow was so bad they might not be able to pay the bills.

    During my last few years at DPB, the Kaine, McDonnell, and McAulliffe years, we spent most of those years having to cut agency budgets. One year, the revenue fell off sharply at the end of the fiscal year and we realized that we were facing a $1 billion shortfall in the upcoming fiscal year. Now folks are talking about a $1 billion year-end balance.

    Contrary to what people may think, however, dealing with agency requests during lean times is easier than during fat years. You just say “no”.

  3. LarrytheG Avatar
    LarrytheG

    Sales tax revenues are up. Income tax revenues are up. Business tax revenues are up. lots of income and lots of buying. Houses and used cars are hot ticket items.

    But Northam is a danged SOB for “shutting down the economy – at least that’s what we been told”.

    Now we did have a bunch of restaurants closed and unemployment out the wazoo but what effect on the economy if tax revenues that derive from spending are good?

    weird.

  4. LarrytheG Avatar
    LarrytheG

    Got to the RTD article in FLS which sometimes prints RTD articles – that I cannot get to since I do not subscribe to RTD.

    That article adds to Steve’s and expands on a few things but the issue of “payroll taxes” is still not completely clear to me.

    When I look at a w2, the “paroll taxes” I’m familiar with are the Federal Social Security and Medicare , and the article does say that money for unemployment also comes from the Feds who help “replinish” the fund.

    But apparently there are other “payroll taxes” direct to the business that are not shown on W2s.

    At any rate, the article also mentions the fact that other states are using Rescue Act money to shore up their depleated unemployment funds also and Virginia might/should do the same.

    Clearly I do not fully understand how funding the unemployment trust fund is done.

    RTD artfcle:
    https://fredericksburg.com/news/state-and-regional/state-could-use-more-than-1-billion-in-federal-aid-to-boost-unemployment-trust-fund/article_2c2ffc3b-71cb-5de7-bcd0-f2b881e45ad9.htmlState could use more than $1 billion in federal aid to boost unemployment trust fund, protect businesses

  5. tmtfairfax Avatar
    tmtfairfax

    When Mark Warner ran for governor, he campaigned on a promise not to raise taxes. He later found what he believed to be a structural imbalance between revenues and expenditures. And then he called for tax reform, which turned out just to be tax increases.

    It looks to me as if we have a new structural imbalance, going in the other direction. It’s time for some tax cuts. If government is to have credibility, doesn’t it have to be consistent?

    1. LarrytheG Avatar
      LarrytheG

      “structural balance” is a pretty nebulous concept but – for-instance, if schools have to pay more to educate autistic kids – the money has to come from somewhere, Or if VEC or VDH need to upgrade their computer systems, if the police need to start using body cams, etc, etc.. these things often cost money over and above existing funding. And that’s not to mention inflation and/or cost-of-living for salaries.

      Tax cuts don’t work unless you also cut services… unless one just wants to presume that “somehow” there has to be waste and it needs to be reduced, etc.

      Policians like Warner – all of them are famous for making promises – that’s what they do Some make promises about taxes (always popular), others make promises about regulations, or better services, i.e. like “fixing” some agency that has issues.

      Much of it comes back to money though.

      1. tmtfairfax Avatar
        tmtfairfax

        False argument. The Commonwealth could cut taxes and maintain current programs, while only slowing the rate of growth.

        Quite a few years ago, I went to a public policy conference in Denver. A number of my coworkers were there, but there were quite a few “outsiders.” The thing I remember today were the remarks of a former Member of the British Parliament (don’t recall his name). He was a member of the Labour Party, so he approached life from the left.

        He explained that, in the private economy in the West, much of the economic power in the market had shifted from producers to consumers – be they companies or individuals. He noted the one difference – de jure monopolies, such as power companies.

        The speaker continued, identifying a second major exception – governments. Because they too are a monopoly for most services provided, the economic power continues to rest with the producers and their employees. He gave the example of public schools, which, while not a 100% monopoly, a de facto one because of the funding procedures. We fund public schools, with little tax money going to non-public schools. Hence, we have large non-teaching staffs, who often operate the schools to advance their personal agendas.

        The former MP contrasted the situation where tax dollars for education went to parents or guardians, who would then make purchase decisions for their kids. He argued that we’d have better teachers, likely higher paid, and many fewer administrators. This would transfer economic power in education from the producers to the consumers.

        The only factor he did not address (nor should he have been expected to address) was the impact of the Blaine Amendments in the states, which, due to anti-Catholic, anti-Jewish, anti-Irish and anti-Italian immigrant bias, prohibited the distribution of tax dollars to secular schools.

  6. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    The scramble for the year-end balance has already begun. Wayne Huggins of the State Police Association made the pitch for additional funding for the State Police to address salary compression issues. Never mind that the GA provided funding in the recent Appropriation Act to mitigate salary compression.

    About half, or more, of the year-end balance of $1 billion or more will go to the Rainy Day fund and other reserve accounts.

    Probably the biggest driver of the surge in GF revenue was the 69 percent increase year over year in nonwithholding taxes. This is the category for self-employed individuals, capital gains, and other taxes not withheld from regular paychecks. May was the month for reporting 2020 income and for the first estimated payment for 2021. It is a notoriously hard revenue stream to project. (It was the collapse in nonwithholding revenue several years ago that resulted in a $1 billion shortfall.) The strong stock market activity last year probably had a lot of people cashing in some gains.

    The revenue projections for the next biennium will be tricky because FY 2021 was such an unusual year. As for expenditures in the next biennium, the SOQ funding will need to be “rebased”, which always requires a bunch of more money. Also, Medicaid always needs more money and the hit will be higher because the federal stimulus from pandemic spending will have gone away.

    1. LarrytheG Avatar
      LarrytheG

      I remember the forecast issue a few years back.

      With respect to self-employment taxes, that’s often the gig economy and related small businesses and I thought it was that part of the economy that did get hurt more than corporate land government (teachers, deputies, etc).

      In exurban places like Fredericksburg, the localities end up with pressure to offer high enough wages to keep workers local and not compute to NoVa for higher wages. Seems like every year, there are those who come in front of the board to plead the attrition case which does involve SOQs and state compensation for public safety – not only deputies but EMS (not sure if the state helps fund those).

  7. Stephen Haner Avatar
    Stephen Haner

    Larry, I have consistently noted that this state was far less restrictive on the economy than some others. More open than California, if not quite as open as Florida. Yes, the economy is not still fully back. Which is why you haven’t seen the peak of this revenue spike.

    Important to note what is not included in this flood: This is all General Fund taxes. So does not include the hospital taxes for Medicaid expansion, the higher transportation taxes, and the RGGI carbon tax just now starting to come in, and others. The all-in growth will also prove to be off the chart.

    1. LarrytheG Avatar
      LarrytheG

      re: ” Medicaid expansion, the higher transportation taxes, and the RGGI carbon tax”

      I was under the impression that the Medicaid Expansion almost paid for itself and the hospital taxes were not huge.

      On Transportation – my understanding was that taxes were expanded and added in response to losses due to more efficient cars AND I understand, they may need to do even more if cars go more electric.

      On RGGI – I have no idea how that actually is reflected at the retail level.

      I’m NOT “pro-tax” or any semblance but I do think we have to pay for things like transportation and health care – both of which impose their own costs if we don’t invest in them.

      RGGI, depending on who you listen to is “terrible” , will be “terrible” but so far seems more or less not seen or felt.

  8. William O'Keefe Avatar
    William O’Keefe

    Bureaucracies have insatiable appetites. No matter what their budgets, they always want more. Half of this surplus will go into the “rainy day fund. The other half should be returned to tax payers. When was the last time that the Commonwealth had a detailed review of what it does and how? Organizational and budget reviews are common in the private sector, so let’s have one here.

    1. LarrytheG Avatar
      LarrytheG

      We elected some Conservative BOS a few years back and they seemed convinced the county had “fat”. fast forward a few years and all of that changed… and now they’re worried about losing employees to NoVa jurisdictions ………… whole different ball game once you get on the inside.

    2. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      A detailed review of what state government does and how sounds good in theory. The state has a total annual budget of $66.9 billion. Of that amount, $23.6 billion is from the general fund. How many entities in the private sector with that size budget “commonly” have detailed and organizational reviews?

      Assuming such a review were to be done, who would do it? Any answers or recommendations will depend on who does it. how much time is spent on the review, and how the review is carried out.

      Theoretically, the General Assembly conducts such a review every year when it reviews the budget bill submitted by the Governor. With its amendments, it passes judgment on what the state government should be doing. Of course, a legislative session compressed into 45 or 60 days is really not sufficient time to conduct a thorough review. However, the subcommittees of the Appropriation Committee and Senate Finance Committee could meet regularly (weekly, bi-weekly?) to carry out that function. But they don’t.

      And one cannot blame just the Democrats. Republicans were in the majority for many years in the General Assembly. Taxes were not cut during that time, although revenues increased and there were year-end balances at times. The Thomas Jefferson Institute presented a rational, well-thought out proposal for tax reform a couple of years ago, but the Republican legislature failed to adopt it.

      If conservatives want to return money to the tax payers, in the form of tax cuts or otherwise, they should propose that to the voters. But, be aware, if one is proposing to cut taxes, one should also propose what services should be cut or foregone. I will be interested to see what proposals Mr. Youngkin makes along these lines.

      1. LarrytheG Avatar
        LarrytheG

        Yep. Do a referenda and propose cuts in services to support tax cuts and see who votes for what.

        I don’t know about other parts of Virginia but up in my neck of the woods, if someone proposes cuts in education – it brings out both sides in force.

        If someone proposes cuts in deputies , I suspect that would not be approved.

        If someone proposes cuts to “faceless Bureaucracies” it probably would pass easily!

      2. LarrytheG Avatar
        LarrytheG

        Yep. Do a referenda and propose cuts in services to support tax cuts and see who votes for what.

        I don’t know about other parts of Virginia but up in my neck of the woods, if someone proposes cuts in education – it brings out both sides in force.

        If someone proposes cuts in deputies , I suspect that would not be approved.

        If someone proposes cuts to “faceless Bureaucracies” it probably would pass easily!

      3. William O'Keefe Avatar
        William O’Keefe

        Mr.Sizemore, if the state returns half of the surplus it doesn’t have to cut any services. As to the review that I proposed, think of the Hoover Commission that reorganized the Executive Branch of the Federal Government in the late 1940s. Distinguished citizens from Virginia should make it up and its charge should be to identify essential public services and how to most efficiently deliver them. There should be no assumption that the Commonwealth is optimally organized nor that the means of funding it are optimal.

        1. LarrytheG Avatar
          LarrytheG

          Bill – have you ever heard of the Auditor of Public Accounts and JLARC?

          Are you familiar with the Comparative Financial Report for the Va jurisdictions they compile every year?

          If you could compare on a per capita basis the various revenues and services would that help in determining what level of services is appropriate and their costs?

          1. William O'Keefe Avatar
            William O’Keefe

            I’m familiar with JLARC but it is not a substitute for an external group that is willing to use a zero base approach.

          2. LarrytheG Avatar
            LarrytheG

            ever seen this:
            http://www.apa.virginia.gov/apa_reports/lg_comparativereports.aspx

            you can compare counties and towns on a per capita basis for things like public safety, schools, etc.

            Assuming something like public safety is a needed service – it can help inform as to how much it costs on a per capita basis – not perfect because no two public safety are the same but gives ball park comparisons.

            Whether at the local or state level, it would seem some type of metrics could help determine what a typical number is – and unless one presumes ALL of them are too much/wasteful – give some level of legitimate costs.

            Say, for instance, how much does the Va State Police cost Virginians on a per capita basis. Are there other metrics to provide informed judgements? What SHOULD the State Police cost?

        2. LarrytheG Avatar
          LarrytheG

          Bill – have you ever heard of the Auditor of Public Accounts and JLARC?

          Are you familiar with the Comparative Financial Report for the Va jurisdictions they compile every year?

          If you could compare on a per capita basis the various revenues and services would that help in determining what level of services is appropriate and their costs?

  9. Stephen Haner Avatar
    Stephen Haner

    For Larry: The state UI Trust Fund is supposed to be 100% employer funded, a revolving fund that will rise or sink with the number of layoffs. Some of the taxes are tied to the individual company’s claims history, and some are not (pool, fund builder). Most folks seem pretty happy with how it works, and in good times the tax is minimal. Then a recession hits, the fund sinks, even to the point that a federal loan is needed.

    In that cases, taxes start to rise until the loan is repaid and the Trust Fund replenished. In really deep recessions, the state has used its own tax money to supplement the fund and keep the taxes a bit lower, but never on the scale now being contemplated.

    Also in a deep recession, the federal government authorizes a supplemental benefit (as it did this time) and extends the period of benefits (again, as it did this time.) Those CAN be but are not always covered with federal grants.

    But the ideal is 100% employer funded, with the taxes rising or sinking as needed to maintain the fund. Employers also pay a federal UI tax per employee.

    The political battles at the GA, when they happen, are over the level of wage replacement, the % of the lost income covered by UI, and the maximum weekly benefit. There is a chart in the report that compares VA to other states on those measures and we are neither generous nor cheap. When people like Hudson (she’s bright) figure out where these levers are, the battle may resume.

    1. LarrytheG Avatar
      LarrytheG

      Thanks for the additional info and explanation. Much appreciated.

  10. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    In response to William O’Keefe

    “Send the surplus back to the taxpayers” makes for a good bumper sticker slogan. Assuming there is no impact on services, let’s look at the practical aspects of doing that. How are you going to decide who gets how much? The easiest and most feasible method would be to give every resident an equal refund. For the sake of simplicity, I will assume that we are talking about returning $500 million. With an estimated population of about 8.5 million, that comes to about $59 per person. Some will object that a significant number of residents did pay any state income taxes, so they should not share in the surplus. But, those people bought stuff over the course of the year and thereby paid sales taxes, thus contributing to the year-end balance. The same could be said of teenagers who bought stuff with money they earned from part-time jobs. If you want to use some method other than a per capita refund, it gets messy real quick. I doubt if legislators will want to tackle this political headache for the sake of Virginia residents getting a check for less than $60.

    As I understand the Hoover Commission, it made recommendations on the organization of the federal government, not necessarily on what the federal government should be doing. There was a similar commission for Virginia within the past 50 years. It was the Commission on State Governmental Management, commonly called the Hopkins Commission. It operated from 1973-1978.

    The Hopkins Commission did not look at what government did, but how it did it. It made numerous recommendations regarding agency consolidations and efficiency, as well as the creation of new agencies. It is best known for its recommendation on the appointment of agency heads. Up until this time, most agency heads were appointed by, and answered to, the board overseeing the agency. For example, the Highway Commissioner was appointed by the State Highway Board. In other words, the Governor did not control the directors of state agencies. The Hopkins Commission recommended that the Governor appoint all agency directors and that they serve at the pleasure of the Governor. That is the system we have now.

    There was a period when it seemed that each incoming governor set up a special commission to reform state government. Doug Wilder had “Project Streamline”; George Allen had the Commission on Government Reform, with its Blue Ribbon Strike Forces. There was a lot of publicity and churning, but in the end, the end-product was a group of reports that were filed away. And the implementation of some recommendations ran into a lot of opposition.

    I had been at DPB for only a year or so when the Governor’s Blue Ribbon Strike Force on Transportation made its recommendations. VDOT was one of my agency assignments and the recommendation for consolidation of the VDOT area headquarters made sense to me. I recommended a budget language amendment directing VDOT to prepare a consolidation plan. (That was back when DPB budget analysts could make budget amendment recommendations on their own initiative.) The recommended budget language was approved by my supervisors, the Governor, and the General Assembly. When the budget became effective, VDOT dutifully went about devising a consolidation plan to submit to the Governor. That is when it hit the fan. Legislators were deluged with complaints from their constituents and VDOT employees. In turn, they complained to the Governor’s office, who complained to DPB. At the next General Assembly session, the legislature inserted language in the budget prohibiting VDOT from implementing any consolidation. That is when I became convinced that, although they talk about government efficiency, politicians don’t really want to cut back or consolidate government operations if doing so will affect services.

    1. William O'Keefe Avatar
      William O’Keefe

      Thanks. This is very informative. The Legislature is a problem but it also has been a very long time since the Hopkins Commission. Maybe what’s needed is another Hopkins like commission that is well publicized and where like the BRAC, the Legislature has to either accept or reject its recommendations.
      The fact is every organization, public or private, becomes less effective over time unless there is some catalyst for objective reassessment.

      1. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        I do not disagree that a new “Hopkins Commission” might provide fresh insight into how the state is organized and managed. I just do not hold much hope for it.

        Reorganization might result in more efficiency, but I would be surprised if it would result in the state performing fewer services. What I regard as an important service you may regard as superfluous.

        I just remembered another, more recent effort along these lines–the Council on Virginia’s Future. This was established in 2004. The emphasis was on strategic planning and performance measurement. It was a good idea with a lot of promise. Enormous time and money was spent. There was permanent staff for the Council. The staff created a sophisticated website with a dashboard showing major state performance goals and progress toward meeting them.

        The problem was that not many people paid much attention to all of it. DPB was in charge of implementing it. Agencies resisted setting meaningful or challenging performance goals and governors’ offices were not willing to spend the time or political capital to make them do it. The Council and staff were disbanded in 2017 and its website discontinued. DPB still has a tab on strategic planning and performance measures on its website. The agency periodically goes through the motions of getting agencies to update their strategic plans and the data for their performance measures, but it is like pulling teeth. It is a paper exercise with little or no relevance to the operations of state agencies.

        1. William O'Keefe Avatar
          William O’Keefe

          That’s depressing. But it is either throw up your hands in despair or keep pushing reform. It starts with the governor and his commitment to hold his appointees responsible. With only being able to serve one term he/she can afford to spend some political capital.

    2. LarrytheG Avatar
      LarrytheG

      I think at one point VDOT was reformed and downsized to less than 10,000 employees. Thenthey created the dashboard to show on-time, on-budget performance, cannot rememeber the name of the guy who did this. VDOT has instituted Smart Scale which has revolutionized how projects are funded. No more are good-old-boy projects supported politically by localities – approved projects actually have to show real benefits measured by standard metrics.

      VDOT also instituted PPTA as well as HOT Lanes/Express lanes where there is urban congestion and less and less available right-of-way. Tolls actually vary according to congestion levels and congestion can be managed to maintain lanes that still provide a predictable trip – even for FREE if you carpool!

      The creation of highway districts that all those regions that decide if they want to ADD more local money AND decide which projects they want.

      Then look at Medicaid which has instituted coordinated care and an electronic record that can actually help keep costs down but at the same time improve care because doctors collaborate info for each patient.

      These are changes to improve government, to be more cost-effective. People actually complain because of some of these reforms but they were made in response to improve service levels and reduce costs.

      It does happen. Pretty sure VDH and VEC are going to be reformed.

      Giving money back is popular with some Conservatives but before they do that they should insure that:

      1. – the rainy day fund is topped off
      2. – the unemployment fund is restored
      3. – VRS is stabalized
      4. – Capital projects for transportation , schools, internet and others are funded.

      Giving money back is symbolic at best given the actual needs and wants of taxpayers.

      All of us what lower taxes and more services and infrastructure – and giving back 50 or 100 is largely symbolic.

      People need to remember also – taxes do NOT go into an economic black hole. They largely pay salaries which go right back into the economy.

      What might be interesting is to know/understand is how Govt-provided services and infrastructure are measured in terms of contribution to GDP.

      1. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        VDOT was considerably downsized in the Allen administration in the mid-90s. However, that did not mean that its services were curtailed. Instead of performing those services with state employees, VDOT contracted them out. A lot of the VDOT employees whose positions were eliminated ended up doing the same thing as a private contractor. I remember talking to one engineer who had been a project inspector whose position had been eliminated. He couldn’t have been happier. He was back doing his same job, working for a consulting company, making more than he had as a state employee and had better equipment. The “downsizing” not only did not save the state money, it probably ended up costing more.

        1. LarrytheG Avatar
          LarrytheG

          I dunno. I guess it depends on the contractor but with contracts, they have starting and ending dates and they do give the state an opportunity to more easily cut back if lean times. And it allows them to pay incentives for finishing projects faster, competition on bidding projects, etc.

          I know at the time of the downsizing some claimed no real changes and maybe but it provided flexibility that you do not have with permanent employees and staffing.

          Not all government downsizing or efforts at saving money/increasing cost-effectiveness “works”, nor does it in private industry necessarily especially if the competition has a better idea – which is a difference between govt and private – there is no similar competitive environment for govt.

          Which is why, BTW, I support non-public schools as long as they are responsible for accepting all demographics, have SOL standards and are required to report full transparency.

          If they can figure out how to better educate kids and/or reduced costs – then I’m all for it.

          1. Dick Hall-Sizemore Avatar
            Dick Hall-Sizemore

            I agree that using consultants or contractors for specialized, periodic work makes sense for state agencies. But, much of the work that VDOT had to contract out for after the Allen buy-outs was ongoing. For some analyses see:

            http://jlarc.virginia.gov/pdfs/reports/Rpt222.pdf

            and

            https://www.politifact.com/factchecks/2011/sep/03/george-allen/allen-says-he-substantially-cut-state-government-w/

          2. tmtfairfax Avatar
            tmtfairfax

            As a person involved in community affairs for several decades, I’ve found the current version, which is smaller, to be much more responsive than in the past. It’s organized better to take information from residents and, when appropriate, take prompt action.

            I remember a situation during the Wilder administration, when a community had not been plowed after a big snowstorm for days. A couple residents plowed paths for residents to get out of the neighborhood. VDOT’s reaction was to threaten them with criminal prosecution for interfering with VDOT’s administration of the roads.

          3. Brian Leeper Avatar
            Brian Leeper

            That must come down to the difference between the way VDOT deals with a problem in Fairfax vs. the way they deal with a problem in Prince William (they don’t).

          4. LarrytheG Avatar
            LarrytheG

            I don’t know how one would determine actual different policies by VDOT on a county basis. I’m quite sure there are people in Fairfax who will say VDOT treats PW better than Fairfax.

          5. LarrytheG Avatar
            LarrytheG

            That did happen but it brought questions as to VDOT’s core functions and what SHOULD be contracted out, i.e. should VDOT do actual construction projects or bid them out and VDOT monitors those contracts.

            THen the question for VDOT (or many others ) is this – How many employees SHOULD they have ?

            Answers like ” a lot less” or “they need more” don’t get it. How many SHOULD they have and why? What metrics should we use in making such determinations?

            This is the basic problem with the “any tax is too much” or ” govt is wasteful”, etc, etc.

            No specifics much less why just a belief that (for instance) VDOT has “too many employees”. That’s what George Allens motivation SEEMED to be and one that just satsified Conservatives who felt (with little or no real informed justification) that VDOT should have less employees – and then VDOT just hired them back as contractors – which Allen apparently neglected to close that path also. And what would have happen if Allen HAD actually forced less employees? Would it have ended up like some other State agencies that seem starved for more staff? Would roads and maintenance have been deferred or delayed?

            I don’t have a problem with zero-based budgeting if done right.

            But what would you do with VDOT’s 6 year rolling plans? How would you BUILD each years build plan – 6 years at a time in advance?

            To a certain extent – that’s the good aspect of Smart Scale – they KNOW how much money they will get so then they compete all projects wanted against each other and pick the top ranked until they have spent that budget.

            Far, far better than picking too many projects that can’t be funded and keep extending them out for a decade or two or more hoping more money will appear to build them.

          6. Nancy Naive Avatar
            Nancy Naive

            This same sort of craziness is found in industry too. IBM cut employees in the early 1990s, then hired contractors to perform the ongoing work. A former student of mine was 20+ year employee, who was bought out with a two-year severence plan, and back working at the same job for more money on the following Monday as a contractor to IBM.

            The gov-contractor situation is a perfect storm. Once there’s a profit motive then there is a reticence to change. $1 to your dime that the States least likely to reform draconian felony limits on theft or drugs are those with private prisons.

          7. LarrytheG Avatar
            LarrytheG

            With govt, a lot of the actual development of things like weapon systems or roads is actually done by the private sector. Maintenance and operations more so with the govt and corporate.

            So VDOT will have a maintenance shop with full time employees as well as a design shop with full time employees, but new roads and bridges will get contracted out but with VDOT oversight to assure adherence to design specs, etc.

            But again, when we have folks who say govt “spends too much” and ought to cut taxes, rarely is the case made that there are specifically too many employees for the work – it’s m ore of a generic anti-tax/anti-govt idea.

            So, for instance, HOW MANY employees SHOULD VDOT actually have if we are going to argue that they have too many?

            And of course the other dichotomy that the gas tax is too high but VDOT failing to fix congestion, etc or charging tolls, yadda, yadda, yadda.

          8. Nancy Naive Avatar
            Nancy Naive

            “Fix MY pothole.”

  11. energyNOW_Fan Avatar
    energyNOW_Fan

    Virginia and Maryland were the two states that used the Trump Tax Cuts and an excuse to increase the the state incomes taxes. So Virginian’s did not get too much benefit from the Trump tax cuts.

    Most states like NY, CA continued to allow the same itemized deductions on the state return as before.

    Now what would I do in that situation, if I was the state’s head bean counter? Especially if I was Democrat, looking for sneaky ways to increase taxes without telling people?

    That’s too easy answer. I guess I should ask, if I was a Repub would I still do it?

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      Americans for Tax Reform disagrees with you about Virginians not benefiting from the Trump tax bill.

      https://www.atr.org/virginia

      Some Virginians may have seen their state tax bill increase due to the federal cap on deductions of state and local taxes and Virginia’s general policy of conforming to the federal tax code. However, it is hard to blame Democrats for the Virginia response. Republicans were in the majority in the General Assembly then and the resultant changes to the Virginia tax code were in a bipartisan bill. https://www.virginiamercury.com/2019/02/08/general-assembly-governor-agree-on-a-tax-plan-that-borrows-heavily-from-democrats-failed-bill/

      1. energyNOW_Fan Avatar
        energyNOW_Fan

        Quoting Grover Norquist’s group? He is just saying Federal tax cuts are a good thing, I don’t think Norquist suggested Virginia should increase taxes to take away the tax-decrease benefits Trump was trying to give us.

        1. LarrytheG Avatar
          LarrytheG

          Federal tax cuts that are based on borrowing money are not good for anyone.

          THe only way tax cuts are legitimate is if there are spending cuts and even then people have to want to have services cut.

          What Trump did was pervert the very concept fiscal conservatism.

          We always expected Dems to lean that way but Conservatives have always made that one of their main core principles.

          no more.

          1. energyNOW_Fan Avatar
            energyNOW_Fan

            Nonsense. Dems are adding to Fed deficit too, because current belief is that deficit spending is not as bad as used to be.

            Can you imagine how bad COVID might have destroyed the U.S. business economy without the Trumps tax cuts? Genius, admittedly for accidental reasons.

          2. LarrytheG Avatar
            LarrytheG

            They ARE and they have in the past , we know that. But the GOP/Conservatives have always portrayed themselves as more fiscally responsible.

            COVID would not destroy the economy as long as Congress voted stimulus – right?

            TRUMP gave tax cuts funded from deficit and the GOP agreed to do it -even though for decades they have argued that doing that is grossly irresponsible.

            Nope. It’s NOT “genius” to do the wrong thing for the wrong reasons and have the GOP go along and violate their basic principals.

      2. LarrytheG Avatar
        LarrytheG

        Hey , bringing the facts to the issue totally screws up the preferred narrative that it’s Northam and the Dems doing it!

        “Conformity” is not so simple. For instance, if one goes to the Va Tax site and looks at the number of additions, subtractions and deductions that vary from just adopting the Federal policy verbatim, it’s quite a number.

        What I do not understand at all – is the rationale for the variances. They seem just totally arbitrary. Whatever the reason was for their entry into the tax code in Virginia – I bet not 1 person in a thousand can explain why, when and who and whether it was a GOP majority, Dem majority or bipartisan.

        It’s just THERE!

        And keep in mind – and Steve never mentions this – that seniors in Va within income levels ($50K/75k) get the claim $12000 additional EACH. If you are a retired couple with modest income, even with some investments – you often owe nothing , conformity or not.

        TMT is headed to NC.. I wonder if he is going to come out better on the taxes!

    2. LarrytheG Avatar
      LarrytheG

      Not sure, at the state level – you can deduct state taxes !

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