Last week, Virginia reported that general fund revenues exceeded forecasted revenues by $1.2 billion in FY2024. It is not unusual for actual revenues to exceed forecasted revenues in the commonwealth. In the last four years, revenues have exceeded forecast by $2.6 billion, $1.9 billion, $1.4 billion and $1.2 billion. If not for midyear adjustments to forecasted revenues, our revenue surplus would have been over $3.0 billion in each of the last two years.
We want to be conservative in developing and updating our revenue projections; we certainly don’t want to end up short. So… what is the problem?
By using overly conservative revenue projections, our legislative ability to formulate the best investment, spending and tax cutting strategies is curtailed. If the commonwealth has an additional $1.2 billion or more, should there be additional infrastructure investment? Maybe expanding the highly successful mental health initiative, Right Help, Right Now? How about increasing the pay for home health services delivered through Virginia Medicaid providers? Or perhaps, providing ongoing tax relief.
FY2024 revenues totaled $29.5 billion, or roughly 35% higher than four years ago, growing twice the rate of inflation. This year the General Assembly formulated spending plans that we deemed sufficient for Virginia, based on $1.2 billion less tax revenue than we received. That extra $1.2 billion could have been used to provide an annual $500 Child Tax Credit ($1.1 billion), eliminate the bottom two income tax brackets and lower the top income tax rate ($1.2 billion) or reduce the corporate tax rate from 6% to 3% ($1.0 billion). Or mail a rebate check — $140 per person or $560 for a family of four. But instead, the Democratic-led legislature formulated budgets based on a lower revenue projection and in fact had tax increases in all but the final adopted budget.
Some may argue that swelling tax coffers is good news and an outcome of sound financial management. But swelling tax coffers are the result of taking more money from our citizens and leaving them less money for housing, health care and groceries. Twenty-two states have lowered income tax rates in the last four years. Our peer states of Florida, Texas, North Carolina, South Carolina and Georgia have all implemented reductions in corporate or personal tax rates (and Texas and Florida have no personal income tax). Our populace is mobile, and population data conclusively confirms migration from high tax states to lower tax states.
The 2025 General Assembly session is just over five months away, and bills can already be filed. Past sessions have demonstrated bipartisan support for lessening tax on military retirements, authorizing tax rebates, eliminating the state grocery tax and temporarily doubling the standard deduction. Notwithstanding, our revenue growth continues to outpace inflation. Our reserve funds are at the highest level in history, and we are meeting the needs of Virginia.
In 2025, we need to develop realistic revenue projections and take action to lower our tax burdens for our citizens and businesses. We can have productive conversations on the primary beneficiaries of our lowered tax burdens. Differing opinions can and should lead to a consensus decision on the type and scope of reduction. We can use revenue triggers for enacting changes to protect our conservative fiscal approach to governing. But most importantly, we must act. We can’t overly prepare for the recession around the corner, or we will create a Virginia recession as our competitor states develop more and more competitive tax structures.
https://joeforva.com/wp-content/uploads/2018/08/JoeInvTrans-2-300x132.png00Robert Andrewshttps://joeforva.com/wp-content/uploads/2018/08/JoeInvTrans-2-300x132.pngRobert Andrews2024-08-26 14:21:232024-08-26 14:27:07Virginia revenues are up, which means we should lower taxes.
The fundamental reality is that Virginia doesnnot need to augment our current tax stream in order to properly fund our schools, law enforcement, mental health and the myriad of government needs that our citizens rely on.
There has been significant posturing relative to the adoption of a two-year budget plan for the commonwealth of Virginia. Democrats, who hold a majority in both the House and the Senate, have correctly stated that they produced a timely balanced budget for the consideration of Governor Youngkin. But have they really produced a budget in good faith?
In repeated formal and informal statements, Gov. Glenn Youngkin has been crystal clear — a budget containing tax increases without the same or greater amount of tax decreases, is a bad deal for all Virginians. In short, Governor Youngkin has committed that Virginians will not pay more of their incomes to the Commonwealth. The Democrat proposed budget bill contains more than $2 billion in additional tax revenue relative to Youngkin’s introduced spending plan. This equates to increased Virginia taxation of $230 for every man, woman, and child in Virginia, or almost $1,000 for a family of four. Our struggling families will endure not only higher state taxes, but higher local taxes, and higher charges on their energy bills (due to reinstating regional carbon tax).
The Democrat-proposed budget plan perpetuates a troubling reality; that Virginia government spending is growing much faster than inflation. The Democrats delivered a budget that forecasts $31 billion in revenues (taxes) in fiscal year 26. This represents nearly a 50% increase from the initial revenue forecast of just five years earlier ($21 billion in fiscal year 21). Thankfully, working together, Republicans and Democrats have doubled the standard deduction, eliminated the state tax on every-day groceries, expanded select tax credits and deductions, and issued tax rebates over several of these years. The proposal now awaiting the Governor’s decision basically reverses all of that progress.
No one was elected in 2023 by promising to undo those previous tax cuts. The fundamental reality is that Virginia does not need to augment our current tax stream in order to properly fund our schools, law enforcement, mental health and the myriad of government needs that our citizens rely on.
Just like any competitive business, Virginia needs to compete with other states for investment, people, and jobs. Certain states are winning this battle. North Carolina, Tennessee, Georgia, South Carolina, Texas and Florida are all beating us in terms of population growth, AGI growth, GDP growth and net cumulative migration. These states also have something else in common — they have zero income tax or have taken steps to decrease their income taxes in recent years. When we understand the dynamics of this competition, we can appreciate Governor Youngkin’s insistence that we make Virginia more affordable for all of our citizens and the businesses who employ them.
It is time to dial down the rhetoric … on both sides. Virginia’s AAA bond rating is based on revenue flows and conservative budgeting for sure, but it is also based on a successful functioning political apparatus. The slimmest of majorities in the House and Senate do not constitute a mandate for sweeping policy changes. And it certainly does not justify the “I won’t negotiate” mentality that has creeped into Virginia politics. We owe it to Virginians to collaborate and engage in a deliberative process to achieve a good faith budget that serves all Virginians. If we put aside our prejudices and egos, I have every belief we can accomplish our goal.
https://joeforva.com/wp-content/uploads/2018/08/JoeInvTrans-2-300x132.png00Robert Andrewshttps://joeforva.com/wp-content/uploads/2018/08/JoeInvTrans-2-300x132.pngRobert Andrews2024-08-26 14:16:012024-08-26 14:26:54It is time to come to the budget table.
Republicans wanted permanent tax reductions, Democrats did not. Also, K-12 general fund education budget has increased nearly 30% in the past two years.
Virginia has a budget, or more accurately, has finally amended the two-year budget that was adopted 14 months ago. Kudos to the budget conferees, many of whom will not be in the General Assembly when we convene next January. Nonetheless, they continued to invest their collective expertise and time to develop a budget compromise that could be supported nearly unanimously by both the House and the Senate. In Virginia, politicians do talk to one another, and genuinely strive for legislation that will improve the lives in our Commonwealth.
Virginia revenues continue to outperform expectations, rising 5% (adjusted for tax policy changes) in FY2023. This follows upon revenue growth of 15% and 16% in the preceding two years. The Commonwealth’s revenue has grown quicker than the treasure of the average citizen. Their representatives of either political party can agree that some of the tax growth should be returned, but it is the manner of distribution, the details, that caused the consternation and delays.
The approved budget includes a one-time tax rebate of $200 for individuals and $400 for joint filers, a slight increase in standard deduction (beginning next year), additional support for our military retirees, and reinstates the sales tax holiday (geared towards school supplies.) The spending priorities were historic investments in mental and behavioral health, COVID driven learning loss remediation, and additional compensation for our state and locally supported personnel.
The budget was adopted just in time for politicians of both stripes to create their TV commercials, radio spots, and mail pieces talking about our accomplishments in making Virginia more affordable and lowering our tax burden. By voting for the budget bill, we are technically accurate in our claims of accomplishment. But are we portraying the reality?
The just completed fiscal year recorded revenue growth of $3.04B compared to the originally adopted budget. The budget adjustments return about $140 million or 5% of that growth in ongoing tax reductions. The remaining growth was allocated roughly evenly between tax rebates, savings, and investments in personnel and programs summarized above.
It was no secret that during negotiations, Democrats (particularly Senate Democrats) did not favor permanent tax reductions, emphasizing instead increased spending for the Commonwealth. The Democrat approach is not inherently wrong any more than the Republican approach is correct. However, if we believe in a course of action, we should stand behind our beliefs, articulate accurately, and let the voters decide the best approach for the Commonwealth.
If our campaigns say we are for tax relief and making life in Virginia more affordable for our citizens, then we should have voted for Governor Glenn Youngkin’s individual tax legislation that would have permanently raised the standard deduction and lowered tax rates. This legislation did not get a single Democrat vote in the House or the Senate. If our campaigns say we want to make Virginia more competitive for business, then we should have voted for Governor Glenn Youngkin’s business tax legislation, which again, did not garner a single Democrat vote in the House or the Senate. If we say we are the party of education, then our campaigns should recognize that the K-12 general fund education budget has increased nearly 30% in the past two years under Governor Youngkin, easily eclipsing the 21% increase during the four-year Governor Ralph Northam administration.
Let us all be honest in campaigning for voters, and Virginia will be a better place.
https://joeforva.com/wp-content/uploads/2018/08/JoeInvTrans-2-300x132.png00Robert Andrewshttps://joeforva.com/wp-content/uploads/2018/08/JoeInvTrans-2-300x132.pngRobert Andrews2024-08-26 14:11:432024-08-26 14:26:39Legislators should be honest in portraying their votes on the budget.
It doesn’t take an economist to know that inflation is still causing pain for Virginia families: a trip to the grocery store is more than sufficient. But some numbers demand discussion.
Recently, the U.S. Department of Labor released inflationary figures for April 2023. The month’s increase of 0.4% (about a 5% annual rate) reflects just how difficult it has been for the Federal Reserve to achieve a 2% annual inflation target through monetary policy. Inflation, which reached a 40-year high of 9.1% in June 2022, is responding slowly to Fed action. The Consumer Price Index and other data points lead market watchers to expect an 11th consecutive increase in the target rate for Fed Funds Rate, bringing the upper target to 5.5%.
How did we get here?
To answer this question, one needs to look squarely at the federal government. In the past three years, Congress has literally dumped trillions of dollars into our economy. Demand swelled while labor force participation declined. Eviction moratoriums, enhanced unemployment payments and expanded government support for healthcare, rent and food made the necessity of having a job a little less important to many citizens.
The resultant labor shortage pushed up wages at the fastest clip since the early ’80s and the cost to produce a product or deliver a service saw corresponding increases. Home prices, rents and a trip to the grocery store left Americans shaking their heads and worrying what comes next. The Federal Reserve seemed almost powerless compared to the tremendous impact of COVID-19-directed fiscal stimulus. The sad part of this story is that anyone with an ounce of sense could have foreseen our current predicament.
Congressional actions often have winners and losers. While our country as a whole is clearly a loser, state and local treasuries are among the winners. Growth in state and local government revenues (both tax receipts and federal grants) have made politicians giddy with excitement. All too often, they are more than happy to spend their windfalls, albeit sometimes with some token tax reduction, but always with a statement congratulating their fiscal prowess.
In Virginia, we can and have done better.
In the two budget years since COVID struck, Virginia experienced a 36% increase in state revenues. Our leaders, in crafting our current two-year budget, were committed to put the brakes on this growing burden, and protect our citizens and business.
While great efforts were expended to conservatively forecast revenue, equally great efforts were made in 2022 to return nearly $4 billion of surplus tax receipts to our taxpayers. Republican and Democratic legislators united in a bipartisan effort to keep Virginia affordable.
We are now 10 months through the first year of the two-year budget adopted last year, and it is evident that we will achieve and likely exceed our original forecasted revenue by as much as another $2 billion. With enhanced revenue clarity, Gov. Glenn Younkin has provided proposals to change our second budget year to enhance mental health treatment, improve funding for schools and police and, yes, provide Virginia with an additional $1 billion of tax relief.
His proposals passed through the Republican House, only to fail in the Democratic Senate. Because of the two-year cycle, Virginia has a budget for the new fiscal year and because of the continued revenue surge, the modest tax cuts for the second year that never passed remain easy to accomplish with no need to cut spending.
In fact, second year spending will grow. Now that Congress seems to have gotten its act together, at least a bit, what is the reason for the continued delay in Virginia?
Gov. Glenn Youngkin should call the General Assembly back into session and encourage us to find common ground. I believe we are up to the challenge, and our citizens deserve no less. The argument that Virginia cannot afford both strategic investment and tax relief simply does not hold water.
https://joeforva.com/wp-content/uploads/2018/08/JoeInvTrans-2-300x132.png00Robert Andrewshttps://joeforva.com/wp-content/uploads/2018/08/JoeInvTrans-2-300x132.pngRobert Andrews2024-08-26 14:06:252024-08-26 14:26:20It is time for further tax relief and investment.
The House passed the bills to lower the top income tax rate and business taxes. Meanwhile, a Senate panel approved a bill by state Sen. David Suetterlein to prevent political leaders from manipulating the timing of special elections.
RICHMOND – The House of Delegates on Tuesday passed two of Gov. Glenn Youngkin’s signature tax relief proposals, both sponsored by Del. Joe McNamara, R-Roanoke County.
House Bill 2319, which would lower the top income tax rate from currently 5.75% to 5.5% starting in 2024, which Republicans said would save taxpayers more than $1 billion in its first two years, passed the body by a 52-48 party-line vote. Additionally, the bill would raise the standard deduction to $9,000 for single individuals and $18,000 for married couples, saving the average Virginia family earning $75,000 approximately $114 annually.
The second measure, HB 2138, would lower the state’s effective business tax rate from 6% to 5%, saving Virginia businesses about $300 million annually. The bill also allows for new deductions for small businesses, providing an estimated relief of more than $275 million over the next two years, according to House Republicans. It passed by 52-47.
“Virginia isn’t just in a competition for more jobs, we’re in a competition to retain our current residents and to attract others to our commonwealth,” McNamara said. “Americans are more mobile than ever, and if a family decides they can do better for themselves in another state, they will move, as recent Census data illustrates. These long-term tax changes will make Virginia a more attractive choice as people search for a place to live, work, and raise a family.”
Youngkin hailed the legislation as a “major step forward on tax relief” for Virginia families and businesses.
“Virginians are still overtaxed, they deserve to keep more of their hard-earned paychecks, and today’s significant move by the House of Delegates means Virginians are one step closer to additional relief,” Youngkin said in a statement.
The reductions in individual income tax mean 86% of taxpaying Virginians would enjoy the benefits of a lower top tax rate and an additional 14,000 Virginians will pay no state income taxes, Youngkin said, adding that the reduction of tax rates for business would result in lower taxes for about 475,000 resident small business owners and local businesses across the commonwealth.
“Reinvigorating Virginia’s tax structure will help make the commonwealth competitive with other states so that we can compete to win,” Youngkin said. “We proved last year (that) tax cuts don’t have to be a partisan issue.”
Both proposals are now headed to the Senate, where Democrats hold a 22-18 majority. But after working with Republicans in 2022 in providing a historic $4 billion in tax relief – including eliminating the state’s 1.5% of the grocery tax – Democrats are unlikely to support Youngkin’s push for an additional $1 billion in tax cuts for individuals and corporations.
Last week, a Democratic-controlled Senate panel killedSenate Bill 850, sponsored by Sen. David Suetterlein, R-Roanoke County, that would have slashed the remaining 1% of the tax that benefits local governments to fund schools, repealing the tax altogether.
And on Tuesday, House Democrats accused Republicans of “jamming through their tax bills, which benefit big corporations and the wealthy,” while “leaving Virginia families and small businesses in the dust.”
Instead, Democrats said that they have tried to get Republicans to “come to the table” on a plan of their own, one that would “immediately give more relief to the hardworking Virginians” at less cost to funding essential services.
“The Republican tax bill is a giveaway to corporations – which will either mean tax hikes for families or deep cuts to services,” Del. Don Scott, D-Portsmouth, the House minority leader, said in a statement.
“The Democratic tax bill gives cuts to families and provides immediate relief to people feeling soaring costs. That’s because Democrats prioritize families, and Republicans prioritize corporations and the wealthy,” Scott said.
When the Senate Finance Committee held its retreat in Roanoke last November, the conference room at the Hotel Roanoke was jammed with people who wanted to watch. It seemed as if every lobbyist in Richmond had decamped to Roanoke for a chance to hobnob with some of the most influential legislators in the state – those who help write the state budget. I’ve had an easier time finding seats at a sold-out concert than I did at the Senate Finance committee.
Across the room from me, I noticed what appeared to be an empty seat beside one particularly interested onlooker – Del. Joe McNamara, R-Roanoke County. He had laid a notebook on the chair beside him, clearly saving the seat for someone of importance. Just before the meeting got underway, I saw who he was saving it for. Del. Sam Rasoul, D-Roanoke, slipped in the door and McNamara waved him over to sit beside him.
I remember thinking at the time – what a nice gesture. McNamara and Rasoul probably don’t agree on very much – that’s why one is a Republican and the other a Democrat – but it’s nice to see such civility in these polarizing times.
Then this week I saw a curious post on Facebook. “Last of the Honor Roll letters are signed and on the way!” Rasoul posted. He routinely sends out congratulatory letters to students in his district who make the honor roll. But that’s not all that caught my eye.
After all the congratulatory verbiage, there was this line in the letter – and the bold and underlined parts are exactly how Rasoul wrote it:
“In honor of your hard work, my good friend Delegate Joe McNamara, and I are excited to offer you one free scoop of ice cream at Katie’s Ice Cream located at 3530 Electric Rd., Roanoke, VA 24018 during the week of March 13th through March 19th.”
There’s a lot there to digest and none of it is ice cream. Here is a Democrat calling a Republican “my good friend” – and this doesn’t seem to be the device some legislators employ during a debate, when right after they refer to someone as “my good friend,” they proceed to stick the rhetorical knife in.
Furthermore, and this isn’t something a lot of people would know, McNamara owns Katie’s Ice Cream. (He also owns the Salem Ice Cream Parlor.) So here’s a Democrat sending business to a Republican.
Now free ice cream for honor roll students may not be the biggest issue in the world, but it’s fascinating to me to see this kind of bipartisan friendship and cooperation.
I called up both legislators to find out more – and I did.
Rasoul said he’s been sending out honor roll letters for years now. He said it usually involves about 4,000 letters – all of which he hand-signs, which takes him six to eight hours. (I’m surprised he was still able to type out a message on Facebook after all that!)
“It means something to a lot of these folks,” he said, “especially in Roanoke city where we have a more challenging socio-economic demographic – to get some of that affirmation is very different than you might get in the suburbs, for example.”
For a long time, Rasoul simply sent out letters. This year, he had a different idea. “It’s been particularly tough during COVID for our students and staff and parents and so I had a new idea this time,” he told me. “So I went to my buddy Joe McNamara and said, ‘I know you’ve got an ice cream shop, can we go into together on this, I can help offset the costs.’ He was very supportive.”
Here’s where their stories diverge, in even more uplifting ways. Rasoul said he was planning to split the cost with McNamara. McNamara said: “We talked about just splitting the cost, but I don’t know. If it doesn’t hit me too bad, my plan is to just eat it.”
In fact, McNamara said he liked Rasoul’s honor roll letter so much he’s planning to start doing the same thing in his district – he just has to work out a system for getting names and addresses from county schools.
But that’s not all. McNamara then delivered a warm testimonial of Rasoul – again, keep in mind that these are politicians from different parties.
“Sam has always been a team player in the Southwest delegation,” McNamara said. “Maybe people don’t see it but it’s certainly there.”
Rasoul’s in an unusual position – right now, he’s the only Democratic member of the House west of Charlottesville. Rasoul will never be mistaken for a Blue Dog Democrat – he’s often to the left of many of his Democratic colleagues – but he’s got a knack for getting along with Republicans. (Since this is an opinion column, I’ll offer this opinion: Both Rasoul and McNamara are exceptionally likable people.) I would cite one example of Rasoul’s ability to line up Republican support for certain measures except McNamara beat me to it: “The Catawba project,” McNamara said. “I have some better access to certain avenues than Sam might just because we’re in the majority and he has better access to some of the industry folks, so we work together and we use our collective strengths to make things happen for our region.”
McNamara is referring to Rasoul’s bill to commission a state study about using Catawba Hospital – a psychiatric hospital in Roanoke County for geriatric patients – for substance abuse treatment. This is important on several levels. There’s obviously a demand for substance abuse treatment. Catawba Hospital has also sometimes been on the statewide chopping block – over the past three decades, two different governors have tried to close it, so finding an additional function would seem to improve its chances of staying around. The hospital is the biggest employer for neighboring Craig County. It’s also in McNamara’s district, not Rasoul’s. (We had a story about how this idea originated with a Virginia Tech class.) Rasoul rounded up 25 co-patrons – more than half of them Republicans. (McNamara is listed as one of the chief co-patrons.) The bill passed the House unanimously and now goes over to the Senate.
Now, you might think – sure, that’s an easy bill for both parties to get behind, and you’re right. That also speaks to something going on here: The general public doesn’t often see how much bipartisan cooperation there is in Richmond. My profession is to blame for some of that. We tend to focus on the partisan fights. The nature of politics is to blame for some of that, too. There are partisan fights – and those do tend to be kind of important, and on those issues you won’t find Rasoul and McNamara on the same side. But most of what happens is Richmond isn’t like that. It’s about detailed things such as Catawba Hospital that don’t really have an ideological component, just practical ones that are sometimes tricky because we all know what’s in the details.
“I distinguish between ideology and process,” Rasoul said. “The process is we’re supposed to come down here and do the work of the people. You may have people who are very liberal and very conservative who want to work together.”
McNamara, he said, “is always trying to find a way to get to yes.” Sometimes they get there, sometimes they can’t. (On ice cream, they obviously did.)
“That’s how I try to spend my time in the General Assembly,” Rasoul said. “The fact is the majority of legislation passes with bipartisan support. That gets lost in all of the headlines. We have people on both sides just trying to get it right.”
So here’s my point, which has nothing to do with Rasoul or McNamara or honor roll letters or ice cream: Our legislators often get along better across party lines than a lot of their partisans do. It’s fashionable to say that we need politicians who are more in tune with the people – but sometimes, as a society, we’d be better off if we had people who were more like some of our politicians.
https://joeforva.com/wp-content/uploads/2018/08/JoeInvTrans-2-300x132.png00Robert Andrewshttps://joeforva.com/wp-content/uploads/2018/08/JoeInvTrans-2-300x132.pngRobert Andrews2024-08-21 19:10:342024-08-26 14:28:04Sometimes, people should be more like politicians. Especially these two.
A half century or so ago, the thing that Del. Joe McNamara is trying to do was considered dangerously radical, the platform of a wild-eyed liberal.
Now it’s considered an article of faith among many conservatives.
Funny how things change, isn’t it?
The Roanoke County Republican – a mild-mannered accountant who also sells ice cream, the ultimate comfort food, at two popular establishments – seems an unlikely successor to Virginia’s great liberal populist Henry Howell, who scared the bejeebers out of conservatives for the better part of two decades. Yet here we are: McNamara is trying to enact a key plank of Howell’s agenda and today’s conservatives are rallying behind him, while some of today’s liberals are as skeptical as conservatives were back in the ‘60s and ‘70s.
I refer, of course, to the repeal of the state’s 2.5% tax on “food purchased for human consumption and essential personal hygiene products” – or, as, it’s usually called, “the food tax” or “the grocery tax.”
The repeal of this tax was one of Republican Glenn Youngkin’s main talking points during the gubernatorial campaign last fall – perhaps lost beneath all the hub-bub over mask mandates and critical race theory – but there nonetheless. Now McNamara is one of the legislators sponsoring the legislation in the General Assembly – and the only one whose bill actually matches what Youngkin promised, a complete repeal. As the legislature passed its midpoint this week, McNamara’s bill repealing the food tax has cleared the House on an 80-20 vote. A Senate version, sponsored by a Democrat – Jennifer Boysko of Fairfax County, passed 37-3 but it would eliminate only part of the tax, retaining the 1% that goes to local governments. In the coming weeks, the legislature will have to work out those differences, although McNamara says he’s hopeful, maybe a little more than hopeful, his version will prevail.
“I’m confident,” he told me during an interview this week. “I have every belief that when the dust settles there is no more grocery tax and localities are kept 100 percent whole.” (McNamara has a soft spot for local governments: He was elected four times to the Roanoke County Board of Supervisors before he ran for the House of Delegates in a special election in 2018. It was his concern about local government that led McNamara to voice unease about fellow Republican Wren Williams’ bill to require local governments to appoint an independent panel of experts to decide the fate of Confederate monuments and other war memorials. “I have a real concern with a committee that is going to make a decision that a locality has to agree with, and four out of the six members of that committee are not elected officials,” McNamara said.)
But back to the food tax: Historically speaking, the curious thing is not so much that McNamara has become the legislative point person for repeal but that conservatives in general have been. For the full context, we need to go back to 1966, when McNamara was just three years old and the world was a very different place. Virginia was starting to come out from under domination by the Byrd Machine – U.S. Sen. Harry Byrd Sr. had resigned for health reasons the year before – and a rapidly suburbanizing state was starting to demand services that the state had little money to pay for. There were baby boomers to be educated, a community college system to set up, polluted waters to clean up because people then had new-fangled ideas that perhaps localities shouldn’t be dumping raw sewage into rivers. But what politician would dare propose new taxes? One who didn’t have to seek re-election, that’s who. In his farewell message to the legislature in 1966, outgoing Gov. Albertis Harrison – a quiet son of the state’s conservative old order – endorsed a sales tax. Maybe two politicians who didn’t have to seek re-election. Incoming Gov. Mills Godwin – another son of that old order – took up the cause. He turned out to be wrong about not having to run again (more on that to come) but his term turned out to be one of the most consequential in Virginia history. The state got a sales tax, a community college system, and lots of other things.
It also got a very voluble opponent to the part of the sales tax that applied to groceries. His name was Henry Howell – Howlin’ Henry some called him – and he was very much not a son of the old order. A Norfolk attorney, Howell had spent much of the ’50s and ’60s campaigning against the very fundamentals that kept the Byrd Machine in power. He railed against the poll tax, he opposed the state’s Massive Resistance to integration, he wanted to reform the State Corporation Commission, which he felt was in cahoots with the state’s major utility – Virginia Power, or Vepco for short, or, as he called it, “the Virginia Expensive Power Company.” (Today that’s Dominion Energy). Howell soon added the sales tax on food to his list. In 1969, Howell ran for the Democratic nomination for governor – with repeal of that tax as his “keystone proposal,” in the words of Encyclopedia Virginia. Howell’s objection: The food tax is a regressive tax. Everyone has to eat, so those who are the least affluent have to pay a bigger percentage of their wages for the food tax than do those who are most affluent. Howell put together a coalition that would be unthinkable today – urban liberals, Black voters and blue-collar rural voters who felt they were being left out of things. There just weren’t enough of them.
Howell lost that year but came back in 1973 – for the sake of brevity I’m skipping over the fascinating but tortured politics of that era that led to him running as an independent while Democrats were so befuddled they simply didn’t nominate a candidate. Howell was such a serious contender that the state’s conservative establishment prevailed upon the conservative Democrat Godwin to come out of retirement and run as a Republican as the only way to keep Howlin’ Henry from winning and completely upending everything. Now Howell had an even better argument: Not only was he against the sales tax on groceries, he got to run against the governor who had implemented it.
We’re accustomed today to Republicans running as tax-cutters and accusing Democrats of being tax-raisers but in 1973 the poles were reversed (or maybe they’re reversed today). Then it was the liberal Howell who campaigned as the tax cutter and the conservative Godwin who had to defend it. Howell produced television commercials, considered clever for the time, in which a parade of shoppers complained that Godwin was “too taxing.” Howell seemed on his way to winning; polls showed him with a big lead. Then he made a classic mistake: He released a plan that showed how he would replace the revenue from the food tax he wanted to repeal. Howell proposed three new taxes – an increase in the tax on alcoholic beverages, a tax on professional services (such as the fees charged by lawyers and accountants) and a tax on corporate stock dividends. To Howell’s way of thinking, at least two of those three were more progressive taxes and while Meat Loaf’s career hadn’t started then, the Meat Loaf philosophy still applied: two out of three ain’t bad. Unfortunately for Howell, this gave Godwin the opportunity to charge that Howell wanted to impose a “tax on jobs” and that was that – Godwin won narrowly.
The difference between Howell then and McNamara now: Howell wanted to replace that revenue. McNamara, being a good Republican who also believes Virginia is “too taxing,” does not.
Over the years other Democrats talked up repealing the tax but never did and Democrat ardor for getting rid of it cooled. Then in 2021 Youngkin made it part of his platform. Democrats should perhaps go quietly reflect on how they let this issue slip from their grasp (along with all those rural voters who backed Howell; he carried every locality west of Wythe County, often by wide margins). Only 13 states impose a tax on groceries. “I’m not sure we want to be in that,” McNamara said. Here’s another curiosity: Nine of those are diehard Republican states, with Mississippi imposing the highest rate at 7%. Only two – Hawaii and Illinois – are deep blue states, the other two swing states. You’d think when Democrats had control of the General Assembly, they’d have jumped at the chance to disassociate themselves with all those Republican states imposing a regressive tax, but no.
Here’s one reason why many Democrats lost interest in repealing the grocery tax: Over the years, the tax’s revenue stream got tied to specific sources – with some revenue dedicated to transportation and some to local governments. That makes it harder to undo the tax because the question obviously comes up: How will you replace those funds?
Howell’s answer back then was to impose other, more progressive, taxes. The Republican answer today: We don’t need to raise any other taxes because the state’s economy is booming and producing more revenue. (Yes, Youngkin said during the campaign that the state’s economy was “in the ditch” but apparently even an economy “in the ditch” is still throwing off lots of money.)
And that’s how McNamara, the only Certified Public Accountant in the General Assembly, finds himself at the center of one of the biggest and most complicated issues before the legislature (cannabis regulation would be more complicated). “I spend most of my time on finance-related stuff,” he said. Most years that’s dreadfully dull for those of us who don’t like math. This year, not so much.
“This particular session is different from most,” McNamara said. “We’re in a revenue position where there’s so much cash, it’s unprecedented. There’s talk that there will be a reforecast [in state revenues] coming out Sunday.” State revenues had been projected at $24 billion. In December, the forecast was upped to $26 billion. “You may be at 28, 28 and a half come Sunday,” McNamara said. Democrats often look at those revenues and think of all the unmet needs that they could fund. Republicans like McNamara see the world differently. “If we don’t return some of that to the private sector to make investments, I worry the public sector will crowd out the private sector,” McNamara said. This is one of the more essential differences between Democrats and Republicans.
When McNamara said he spends most of his time on “finance-related stuff,” he’s not kidding. Of the 13 bills he’s introduced this year, 12 deal with taxes in some way, the 13th changes how the minimum wage is calculated.
Some of those bills are small and technical (well, small to most of us, maybe not small to those involved with them) – such as his bill that would tax equipment at data centers “based on depreciated reproduction or replacement cost, rather than based on the amount of income they generate.” That bill was so uncontroversial it passed the House unanimously.
The food tax, though, is big and technical. So is his bill that would increase the standard deduction for state income tax filers from from $4,500 to $9,000 for single filers and from $9,000 to $18,000 for married filers (one-half of such amount in the case of a married individual filing a separate return). That bill is also much more controversial. While the food tax bill passed by a wide and generally bipartisan margin, the standard deduction bill passed on a party-line vote of 52-48. McNamara is hopeful that the budget reforecast expected Sunday (conveniently, the same day both chamber’s budget-writing committees release their budgets) will make it easier for the Senate to go along with his total repeal of the food tax. The standard deduction bill faces a more uncertain fate in the Senate – or perhaps a certain fate. Three similar measures, including one from state Sen. David Suetterlein, R-Roanoke County, all failed to make it out of committee in the Senate and even some Republicans were among those voting to keep them there.
McNamara is almost relentlessly upbeat – years of being a Cleveland Browns fan will either grind you down into eternal pessimism or instill you with the belief that better days simply must lie ahead. With McNamara, it’s the latter. (McNamara take the Browns seriously: He and his wife fix elaborate themed meals for every game).
“I still think we are underforecasting revenue quite significantly,” McNamara said. “I think we could wind up with $28 billion. We could be $4 billion, $4.5 billion richer on an ongoing basis. The grocery tax eats a half bill out of that revenue, an increase in the standard deduction taxes a billion out. There’s just plenty there to do something with.” (For what it’s worth, he also thinks that “something” should include state funding for school construction).
We’ll see whether the Senate – a narrowly Democratic Senate – sees things the same way. Either way, the unassuming ice cream salesman (who out of session can sometimes be found scooping up that ice cream for customers) gets to make this extraordinary but true claim: “I’m sitting on two of the biggest tax reduction bills in the past 10 years.” And somewhere up there, Henry Howell is approving of at least one of them.
Courtesy of the Cardinal News: https://cardinalnews.org/2022/02/18/mcnamara-at-the-center-of-the-food-tax-fight/.
https://joeforva.com/wp-content/uploads/2018/08/JoeInvTrans-2-300x132.png00Robert Andrewshttps://joeforva.com/wp-content/uploads/2018/08/JoeInvTrans-2-300x132.pngRobert Andrews2022-12-22 18:28:252022-12-22 18:30:31McNamara at the center of the food (tax) fight
Delegate Joe McNamara (R-Roanoke), working alongside Delegate Todd Gilbert (R-Shenandoah) and Senator Steve Newman (R-Bedford), reached a bipartisan compromise on tax conformity during the 2021 General Assembly session. This will deliver up to $221 million in tax relief for individuals and businesses in the 8th District and across the Commonwealth — despite a Democrat-controlled legislature that raised Virginian’s taxes in 2020.
ROANOKE, Va. – Gov. Ralph Northam signed the “Remote Learning” bill this week, which allows unscheduled remote learning during inclement weather and emergency situations that prevent in-person learning.
Delegate Joe McNamara, who represents parts of the Roanoke and New River valleys, introduced the bill to the House of Delegates, and state Sen. David Suetterlein, who represents much of Southwest Virginia, introduced an identical bill in the Senate.
Both passed their respective chambers.
“We’re still going to have snow days, but the next time there is a pipe break in your school or the broiler doesn’t work or the heating and air condition systems are out we’ll have an opportunity to continue to learn,” said McNamara.
Both bills state that no school division can use more than 10 unscheduled remote learning days in a school year unless the superintendent of public instruction grants an extension.
Source: McKinley Strother, WSLS 10
Taken from: https://www.wsls.com/news/local/2021/03/06/schools-can-opt-for-remote-learning-during-inclement-weather/
