Happy New Year!
You best enjoy the New Year this week because there will be a lot of changes coming in the General Assembly session that begins next week. The governor has proposed a budget that spends billions of new tax dollars. Just hours after that, this was followed by the new Speaker of the House designee offering her vision of Virginia in the coming years. For those of us that grew up in Virginia and chose to stay here and raise our families, it will be a culture shock if even half of what has been proposed were to become law.
This week I will focus on the highlights of which the Gov. spoke. About $840 million of his proposed new spending has been tax receipts received into the state treasury before the end the fiscal year ending in June. He neglected to point out that the reason for that is the change in the tax law that President Trump pushed through in 2017. Neither did he give the president credit for the booming economy that directly relates to the positive attitude of business leaders after the eight dismal years in which the Obama presidency talked down hopes for a strong economy in the future. The only indication that the administration even acknowledged that the national economy was strong was when the Secretary of Finance stated that the Virginia economy was tracking the national economy.
Gov. Northam proposed the $340 million from the federal tax code changes be lumped into the General Fund of the state rather than be held for the Taxpayer Relief Fund as the Senate Republicans provided for last year. Not only is the economy strong, resulting in record tax revenues, the Governor wants to spend more. He is proposing an increase in the cigarette tax of 30 cents a pack. You will hear more about this tax increase and others in the coming weeks.
The Governor spoke out of both sides of his mouth when offering his plans for transportation. He correctly acknowledged that our revenues were going down for our roads because automobiles are getting more gas efficient and because more cars are being sold that are powered by electricity. To address this he is proposing that the tax on gasoline be increased by 4 cents per gallon next year, followed by another 4 cents the year after, and another 4 cents the next year. After that, the tax would rise at the rate of inflation. Very possibly, if the Governor gets his way, four years from now you will be paying at least $7 or $10 more every time you fill up with gas. His reasoning is we need this money to maintain our roads. However, at the same time he is proposing reducing the cost of registration. The problem is that the registration fee is the only revenue the state receives from electric cars. So while you may be paying $500-$1,000 more a year to maintain our roads, others will be paying even less than their share. For those of us in rural Virginia, this puts families that have to commute farther for jobs, health care, and shopping at an even worse economic disadvantage.
Do not get me wrong, we need to spend money to remain competitive in the market for teachers, health care workers, and other services, but we must be strategic as we do so. We cannot simply raise taxes on everything to provide government spending on wants. We must always be focused on needs. I cannot be critical on some of what the Governor has proposed on spending, but we must carefully review those proposals.
Some of those biggest expenditures are over $1.3 billion in our kindergarten through high school education, another $500 million in our colleges, $92 million to reduce housing evictions, and $150 million to set up state based redundancy of the federal health insurance marketplace. Another $400 million of new money will be set aside for environmental issues.
I had hoped to go into many of the new issues that have been proposed by the Democrats, but space is short so that will have to wait until next week. Needless to say, because of gun issues more people now understand that what happens in Richmond can affect them.
Frank Ruff Jr. represents Lunenburg in the state Senate. His email address is Sen. Ruff@verizon.net.