His thoughts —Tax relief coming eventually
Published 12:30 pm Friday, June 10, 2022
Last Wednesday, a budget agreement was reached between House and Senate negotiators. We have been waiting since mid-March for an agreement to be reached.
Many have asked: “What took so long?” There is no clear answer, however, there is always negotiation on the budget and compromise. Knowing this, it should not have taken 11 weeks. Clearly, Senate Democrats had no sense of urgency.
By keeping the General Assembly in a special session for nearly three months, Gov. Glenn Youngkin has only days to offer his amendments to the budget agreement. Had the budget been on time – or even two weeks ago – the governor would have had 30 days to review the budget and offer amendments. Now, he only gets seven days after the budget is delivered to him.
As with every budget, there are those items that I agree and those that I oppose. Every budget agreement is a compromise and this one is no different. However, on the final version of the budget, you can only vote for or against it.
There is actual tax relief in this proposal. While Senate Democrats would not agree to double the standard deduction on the state income tax, which Senate Republicans have been promoting since the 2019 session, they did increase it by 78%. In real numbers, the standard deduction will now be $8,000 for individuals and $16,000 for married couples. This is closer to what the federal government does. This will give every Virginian an extra $3,500 in annual earnings that will be free from state income taxes.
The grocery tax will be going down too, though not as much or as soon as Gov. Youngkin and Republican legislators proposed. Beginning next year, the grocery tax will be cut 60%, going down to 1%.
Military retirees age 55 and over will be receiving an income tax subtraction of $10,000 for the current year and $20,000 for tax year 2023.
Virginians will also be receiving a one-time tax rebate of $250 for individuals and $500 for married couples later this year.
Over the course of the biennium, this represents total tax cuts of $3.7 billion.
The most glaring omission from the budget agreement deals with the gas tax. There is no relief – none – on the price you pay for gas at the pump. The governor’s proposal to “pause” the gas tax increase failed. (It has jumped 10 cents in the last two years and will be adjusted annually for inflation because of a Democrat sponsored bill in 2020). Therefore, instead of the governor’s proposed “gas tax holiday” in late April, you will have another increase in the gasoline tax in July.
Included were pay raises for teachers and for state and state-supported local employees, such as deputies. They will receive a 5% increase plus another 5% next year.
Frank Ruff Jr. represents Lunenburg in the state Senate. His email address is Sen.Ruff@verizon.net.