Local Commentary

From the Front Row: Kaye Kory’s Richmond Report

kory-fcnpThe 2019 Virginia Legislative session began at noon on Wednesday. There are a number of highly consequential decisions we will take up during this session, including moving forward on the ratification of the Equal Rights Amendment to the constitution, voting rights, the environment and education. Many key decisions follow from Governor Northam’s historic proposed amendment to the biennial state budget passed last year. In total these budget changes rival in significance to Virginians last year’s bi-partisan agreement to expand Medicaid to 400,000 low income residents. The strident objections we will hear from Republicans crying “tax increase,” are predictable; but I found Senate Majority Leader Tommy Norment’s comment that the proposed amendment represented “gubernatorial fiscal bulimia” (The Washington Post 2/18/2018) to be downright offensive. The Leader forgets that the last two elections in Virginia suggest that parroting our President — in style and substance — is not likely to play well in the Commonwealth.

Virginia’s economy is certainly performing well. Unemployment is at historic lows and tax revenues are up as a result of increased business activity in the Commonwealth. Most economists acknowledge the Trump tax cuts and increased defense spending have been key drivers of this prosperity. Unfortunately, it’s likely that we are experiencing a one-time surge that will wind down based on the underlying economic factors, even without considering the huge uncertainty in the world economy, the President’s legal status and his unpredictable decision-making. Additionally, even as the overall economy performs well, the Republican agenda is perpetuating income and wealth inequality that is slowly shredding the social bonds that provide the foundation for our democracy. No one can know for certain what the future holds for the Commonwealth, but it is undeniable that Virginians and the nation are facing substantial economic and political/military risk.

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What Governor Northam is trying to accomplish with his comprehensive budget proposal is to invest some of the proceeds from the current strong economy to protect the fiscal health of the Commonwealth and to make a range of high value investments — in people, critical programs and infrastructure — that will produce tangible benefits and offset some of the greed and corporatism that inspired the Trump tax cuts a year ago. Overall, the amendment calls for a $2.1 billion increase to the Commonwealth’s $100+ billion budget. Of this total, $1.1 billion would be used to increase the reserve or “rainy-day” fund. This step is simply prudent financial management, which has been a hallmark of for Virginians for many years.

Overall, the Trump tax cuts will reduce Virginia taxes for individuals by $4.6 billion and reduce taxes for companies doing business in Virginia by $4.1 billion. Of this total, 4 percent goes to 1.7 million taxpayers with incomes under $43,000 and 75 percent goes to 829 thousand taxpayers with incomes over $127,000. This is unconscionable! The governor is proposing a very modest measure to make Virginia’s Earned Income Tax Credit (EIC) fully refundable to working Virginians with incomes under $54,000. Republicans are on record calling for “middle class” tax cuts that reach up to incomes of $125,000 to $150,000. Never mind families in this bracket will already receive Federal tax cuts of about $2,000, while at $54,000 the cut averages $500. Republican orthodoxy would re-reinforce inequality, while Democrats seek to mitigate it.

In addition, the governor’s budget includes: 1) 2 percent teacher salary increases and a one-time 1 percent bonus for state employees; 2) over $100 million for K-12 education, including programs and school construction; 3) over $50 million for water quality; 4) $50 million for internet infrastructure in rural Virginia and funding for I-81 road improvements; and many other line items.

 

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Delegate Kory represents the 38th District in the Virginia House of Delegates. She may be emailed at DelKKory@house.virginia.gov.

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