The news these days is flush with accounts of the proposed sale of Virginia’s post-prohibition monopoly of ABC stores. For generations, the Commonwealth has controlled liquor by the bottle through a state-based network of about 300 stores that do no advertising, rarely display signage, and still wrap bottles in a trademark brown paper bag. Governor Bob McDonnell wants to change that.
My friend Sen. John Chichester used to tell me that Virginia’s hold on ABC stores resulted in the state drinking in both tax and profit. In other words, liquor stores are another example of a well run government program, this time as an actual business. And a very profitable one at that! And those general fund dollars have been put to excellent use over the years, particularly in the area of mental health. Though the irony of liquor sales funding mental health programs is not lost.
Although the maelstrom of coverage around “boob-gate” has been amusing to behold, Attorney-General Cuccinelli is right: it is a distraction. The attention this non-issue has received is completely ridiculous.
Why?
Because we have dramatically more important issues that need the public’s attention such as the $6 Million tax increase Gov. Bob McDonnell is hoisting upon over 100,000 low income families in Virginia. Many media outlets have spent resources scrutinizing a detail on a tiny lapel pin that most people wouldn’t have noticed even if it was a foot away from their face. But none of the main stream media outlets have corrected their reporting which claims that the budget passed by the General Assembly and Governor was free of tax-increases.
The Governor still has the opportunity to fix this unfortunate policy change. Until then however, this change is still on the books and with the economy in the early stages of recovery, our brothers and sisters of low and moderate means cannot afford a tax increase as Gov. McDonnell himself said so many times on the campaign trail. We hope he won’t raise taxes on low-income Virginians and we hope our friends in the media will correct this factual error.
In other words, the Governor’s office would really prefer people not notice that the Commonwealth is choosing to raise $6Million in taxes on low income workers at the very time it ensures $10Million is available for Virginia’s manufacturers. As we often say, budgets are moral documents that speak to the priorities and values of government. Right now the priority seems to be the manufacturers lobby.
In case you haven’t read the news for the past few months, Virginia’s General Assembly has had to grapple with significant revenue shortfalls in the state budget. Just for context, since fiscal year 2007 the state has cut about $7 billion out of state revenue, and this year had to reconcile another $4 billion shortfall, which they did through cuts to the kinds of core services that Virginians rely on. While I would disagree, the reason many Democrats will publicly tell you they went with an essentially all-cuts approach because Governor McDonnell had already publicly stated that he would veto any budget that included a tax increase.
This is a guest post by Sara Okos. Sara is a policy analyst with the Commonwealth Institute for Fiscal Analysis, which provides credible, independent and accessible information and analyses of fiscal and economic issues facing Virginia with particular attention to the impacts on low- and moderate-income persons.
Every year, a conservative national think tank estimates, on average, how many days residents of each state must work in order to earn what they will likely owe in federal, state, and local taxes that year. The Tax Foundation has declared today- April 13, 2010- Virginia’s “Tax Freedom Day.”
In addition to their use of some shoddy analytical techniques, the concept of “Tax Freedom Day” is particularly deceptive because it suggests that our government simply takes and takes from us. It ignores the benefits that we all receive from a functioning and adequately funded public sector: benefits like clean water and air, roads to get us from our home to the grocery store and to work, and school systems that equip us with the knowledge and skills that allow us to be productive members of society.
In a turn that should certainly catch the attention of anti-taxers, but likely won’t, the Virgina Citizens Defense League (the “every day should be the wild west” guys) are saying that general fund dollars should be used for background checks.
“…VCDL views gun owners having to pay $2 for a background check for purchasing a gun to be exactly like a “poll tax.” Such a fee should be paid out of general funding and in sufficient amounts to backup the statements by the government that instant check would be just that – instant, not 4 hours or days.”
As usual, Philip Van Cleave is shooting off emails describing how entitled he and the rest of Virginia’s gun slingers are. For the state to cover the cost of background checks, which is foolishness, that would mean it would have to raise taxes or cut even more spending from social services, cops and schools.
I am not sure why VCDL feels like an already stretched general fund should be diverted to cover gun purchases but I do know that budget bill will die. It may have to die in the Senate since the House of Delegates is so fearful of the gun guys, but it will happen.
If we are going to raise new revenue in Virginia, shouldn’t it be an investment for the betterment of everyone rather than just to squelch the complaining of the few?
“Jobs will be the first dividend from these innovative programs and projects, but they also have the potential to save tax dollars and reduce energy costs for Virginians for years to come,”
Last year he said, “it will do little to stimulate economic growth.” So the almost 4 million workers in Virginia who got tax cuts from the Recovery Act will be glad Lt. Gov. Bolling has changed his mind.
A recent report from The Commonwealth Institute shows how the Recovery Act provided over $1 billion in tax cuts for 3,871,697 workers in Virginia as of Jan 15, 2010. These tax reductions are the result of the Making Work Pay Tax Credit in the Recovery Act. The report explains:
The Making Work Pay Tax Credit constituted the largest direct aid Virginians received from the Recovery Act. . . Over 3.9 million working Virginians have benefited from the credit. This represents 9 out of 10 workers in the state’s labor force.
Most taxpayers are receiving the maximum credit — $800 for married couples, $400 for others.
It’s good to see that more and more of Virginia’s elected officials are seeing the tangible benefits of the Recovery Act, just as the almost 4 million working Virginians have.
“If it wasn’t for this program, I’d probably be dead,” said Ryan Hayes, a Chesapeake 17-year-old in gray Challenge sweats. Less than a year ago, he was skipping school at Western Branch High School, using drugs and alcohol and getting into trouble at home.
Virginians, already feeling the pain of the Great Recession, have more pain coming to them thanks to the Governor’s pledge to close to the budget hole exclusively on the back of low and middle income Virginians. An important school program for at-risk teens that is on the chopping block because of budget cuts:
National health reform briefly took the spotlight away from the grim budget situation our Commonwealth is in. A new study out by The Commonwealth Institute shows that the budget will likely cost Virginia 37,000 jobs and $2 billion in lost GDP.
Virginia’s lawmakers responded to this crisis with an approach that is not balanced and relies most heavily on cuts to programs such as education and health care in order to close the budget shortfall.
The approach was definitely not balanced. As people of faith we are mindful of our enduring responsibility to care for one another. As it says in the Bible:
Let each of you look not to your own interests, but to the interests of others. Let the same mind be in you that was in Christ Jesus. – Philippians 2:4-5
Last week, rest stops across Virginia re-opened — at taxpayer expense — to ensure that folks who travel our highways have a place to “rest”: to get a snack, look at a map, stretch their legs, walk their pooch, and otherwise relieve themselves. How nice.
Meanwhile, in nearly every county and city across this state elected officials and parents of school-aged children are reacting to massive cuts to education funding, making plans to layoff teachers and increase class sizes in order to balance their budgets.
Folks in the Northern Shenandoah Vally are welcome to attend the Shenandoah University Davis Lectures at no cost on Sunday and Monday. I will be speaking about responses to anti-semitism and racism, budgets and moral documents, and the restoration of felons rights in the context of faithful citizenship.
I am sure that questions from the audience will include an opportunity to celebrate what I hope will be the passage of the health insurance reform bill in Congress. It should be a great time to be back in Winchester, VA and see so many friends from my old pastorate Ebenezer Christian Church.
In our effort to push for a budget that supported low and middle-income Virginians during this great recession, domestic violence spending was one of our three priorities. Now that the General Assembly has sent a budget to the Governor, how did domestic violence programs fare?
Members of the General Assembly passed a budget that restored funding for domestic violence services, homeless shelters (including domestic violence shelters), and child advocacy centers to the levels proposed in former Governor Kaine’s budget.
We started this session with a budget proposed by former Governor Kaine that included a 7.5% cut for domestic violence services through the Department of Social Services (VDSS), a 5% cut for Sexual Assault Crisis Centers through the Department of Criminal Justice Services (DCJS), an 8% cut for homeless intervention services through the Department of Housing and Community Development (DCHD), and a 10% cut to Child Advocacy Centers.
The Budget passed by the General Assembly still includes these original cuts to funding from Gov Kaine’s budget proposal, but doesn’t include any further cuts. The statewide reductions to domestic and sexual violence services will be:
DV Funding at VDSS: $138,750 cut in 2011 & 2012;
SV Funding at DCJS: $67,500 cut in 2011 & 2012;
Homeless Funding at DCHD: $400,000 in 2011 & 2012;
Child Advocacy Centers: $100,000 in 2011 & 2012.
The General Assembly did not include the marriage license fee increase in the final budget. That means no dedicated funding for children and youth services. It also means that domestic violence funding was not completely restored to its 2009 levels.
By: Michael Cassidy, Director of The Commonwealth Institute
Many Center members embraced the important findings of The Commonwealth Institute’s report back in the fall on the growing costs of state tax expenditures and the general lack of accountability and transparency in this part of the budget that now costs $2.5 billion. As the legislative session draws to a close, we do have a small, but important victory in that area to celebrate.
On March 8, 2010, the House unanimously passed HB 355, sponsored by Delegate David Englin (D-45) to strengthen transparency and accountability in the budget process by improving the annual corporate income tax relief report produced by the Department of Taxation. The Senate had already unanimously passed the legislation on March 4, 2010.
Buried in an AP article about the budget is a telling line that conferees use:
“…proceeds from the lottery to pay for summer school, some textbook purchases and other programs, and increases the amount likely to be available from the lottery by $5 million each year because of the addition of the Powerball game.”
It is very sad that the state expanded the lottery in the hopes that it will generate $5Mil more “for education.” That must certainly make groups like the “Americans for Prosperity” (sic) pleased given their appetite for shrinking the core functions of government. If tax payers are not expected to invest in our future workforce, I guess we will leave it up to the scratchers among us.
It is a shame that we are trying to teach children mathematics using lottery proceeds; it just doesn’t add up. If anything, we should be limiting gambling in Virginia, not seeking to expand it. Do we really want to become like New Jersey?
At this stage of the legislative session, the budget has entered the shadowy world of the budget conference process. During this time there are no public meetings or hearings. The budget conferees from the Senate and House meet as needed, in private, to negotiate and hash out the differences between their two versions of the state budget. What were those differences? In a nutshell both budgets cut public services deeply: health care, public education, the arts, etc. They both also raise revenue, though the Senate raises more revenue than the House with an assortment of fee increases. Both houses emphatically rejected general tax increases.
Members of the General Assembly heard your voice and both budgets released by the Senate and House take some steps toward ending corporate tax giveaways and raising revenue. The question now is: how much?
Over the past several weeks, faithful Virginians have been making the case for a moral budget and taking a balanced approach to filling the over $4 billion budget hole. Well now the debate is over. Members of the General Assembly heard your voice and both budgets released by the Senate and House take some steps toward ending corporate tax giveaways and raising revenue. The question now is: how much?
It’s half time. Only instead of marching bands and a trip to the concession stand, the players here at the General Assembly stay on the field as the clock counts down to the final whistle. Crossover was Tuesday. That’s the day where each chamber has to complete work on its own legislation, and then everything they’ve done “crosses over” to the other chamber for their consideration. Much legislation has died. But there remains much to do.
Highlights of Gov. Bob McDonnell’s proposed budget cuts and spending announced Wednesday, grouped by area of the budget and by cost. (Figures rounded to the nearest million):
Public Education
$225 million from restoring base funding for public schools to 2008 level.
$130 million cut from support for supplemental salaries such as coaches and department chairs.
$92 million from eliminating Lottery support for some education programs.
$32 million cut for lease and rental support.
$30 million in travel funding cut.
$19 million saved by extending the useful life of school buses from 12 years to 15.
With the budget easily dwarfing all other public policy discussions in Richmond this legislative session, many Virginians are confused about where they can find details about the process and numbers. These resources are online, but not it any one organized place.
By: Neil Bergsman, Michael Cassidy a Elissa Silverman
We just celebrated New Year’s, but for legislators in Annapolis, Richmond and the District, it probably seems like Groundhog Day, with budget shortfalls (again), falling revenue (again) and high unemployment (again).
The news these days is flush with accounts of the proposed sale of Virginia’s post-prohibition monopoly of ABC stores. For generations, the Commonwealth has controlled liquor by the bottle through a state-based network of about 300 stores that do no advertising, rarely display signage, and still wrap bottles in a trademark brown paper bag. Governor Bob McDonnell wants to change that.
