Youngkin pushes for tax hikes on working Virginians

(AP photo/Steve Helber)

By Carolyn Fiddler

January 11, 2024

This week, Gov. Glenn Youngkin delivered the annual State of the Commonwealth address to the General Assembly, and he mostly used the opportunity to promote a regressive tax proposal that would reform the state’s tax structure to benefit the rich.

In the budget he submitted in late December, Youngkin called for increasing the state’s sales tax while cutting income taxes, a move that will disproportionately benefit the wealthy and burden lower-income Virginians.

According to an analysis by the Commonwealth Institute and the Institute on Taxation and Economic Policy, the sales tax hike would hurt low-income people more than the income tax cuts would help them, in part because these Virginians spend far more of their resources on necessities. Additionally, the wealthiest Virginians would benefit far more from the income tax cuts than lower-income earners – with the very highest earners benefiting more than 20 times as much as those at the lowest end of the income spectrum.

Youngkin also renewed his call to eliminate the “car tax,” a personal property tax on vehicles that Virginians pay to support local government functions. The governor said he wants to work with the General Assembly to figure out how to get rid of the tax without gutting localities’ budgets, although he neglected to say how this might be accomplished.

“To be clear, this is a package deal and I’m only interested in a plan that reduces taxes for Virginians,” said Youngkin.

Virginia Democrats – and even some Republicans – have already expressed skepticism about the governor’s tax cut-and-hike scheme, and Democratic leaders’ responses to the speech reflected their distrust of the proposal.

“A lot of the policy proposals we heard tonight were all dependent on a magic money tree growing somewhere on Capitol Square,” Senate Majority Leader Scott Surovell said in an interview.

“There is a pretty strong sense in my caucus that we’re not cutting income taxes for people that make lots of money,” Surovell told reporters earlier in the day. “Someone that makes $200,000 a year, we’re not going to let them pay $10,000 less in taxes while people that make less than $30,000 a year pay more. I don’t think that’s going anywhere.”

Surovell and other Democrats say that the party’s main focus is on education, including investing in public schools, improving teacher training and recruitment, and increasing teacher pay.

“We’re $7 billion behind where we need to be funding K-12 right now. Tax cuts are not going to get us there, we really need to be talking about how to start solving these problems with resources instead of taking resources out of the system for a political stunt,” said Surovell.

A Joint Legislative Audit and Review Commission report released last year showed that Virginia trails both the national average and multiple surrounding states in K-12 funding per student.

In his speech, Youngkin promoted his budget’s proposed investments in public education and said that he was committed to replacing the existing school funding formula.

“I have proposed, again, the largest education budget in Virginia’s history, $20.2 billion over the biennium,” he said.

But the governor’s education proposal already faces criticism from Virginia educators.

Virginia Education Association president Dr. James Fedderman contends that the governor’s “smoke and mirrors” approach to funding will effectively reduce state investment in public K-12 schools by $300 million compared to current spending.

“The handful of relatively small education investments, far outweighed by cuts, are an insult to educators and families and don’t come close to what’s needed to improve academic outcomes for students or get educator pay to the national average,” said Fedderman.

Youngkin also used his speech to remind the Democratic majorities in the state House and Senate that he has veto power over progressive proposals, like repealing the state’s anti-union “right to work” law (which Democrats have not yet indicated they plan to do this year) and stronger gun safety laws. He also took the opportunity to promote a proposed new sports arena and entertainment complex in Northern Virginia, which requires General Assembly support to move forward.

House Speaker Don Scott suggested that passing major legislation would only be accomplished through bipartisan efforts but recognized that partisanship would be present in the Democratic-majority but narrowly-divided House and Senate.

“Sometimes we all get emotionally attached to some stuff, and that’s good,” Scott said. “That’s why we were elected, because we care.”

 

  • Carolyn Fiddler

    Carolyn Fiddler is Dogwood's chief political correspondent. She is also the nation’s foremost expert in state politics with almost two decades of experience in statehouse machinations, and her comic book collection is probably bigger than yours.

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