Youngkin proposes $1 billion in tax cuts, higher spending in budget plan

[Right_in_Virginia]

Youngkin proposes $1 billion in tax cuts, higher spending in budget plan
Washington Post, Dec 15, 2022

RICHMOND — Gov. Glenn Youngkin (R) is proposing $1 billion worth of tax cuts as part of a wish list of changes to the two-year state budget that he said are aimed at making Virginia more competitive with other states.

The cuts would be on top of $4 billion in tax reductions the General Assembly approved and Youngkin signed into law earlier this year. They would hit at a time when Youngkin said he expects the national economy to face a downturn or even a recession, a prospect that many lawmakers have said makes them leery of reducing state revenue.

At the same time, Youngkin is proposing new spending for priorities such as wooing economic development, providing bonuses for teachers and law enforcement officers, remaking the state’s mental health-care system, and cleaning up the Chesapeake Bay.

Youngkin said in an interview that because of economic uncertainty, he has designed his spending plan as an “accordion budget” that can flex or contract if conditions change. Out of some $3.6 billion in tax cuts and “targeted spending,” he said, $1 billion “is conditioned on hitting our [revenue] numbers on June 30. That’s the way we budgeted our businesses when I was running the Carlyle Group.”

Youngkin stepped down in 2020 as co-chief executive of Carlyle, a private equity investment firm, as he prepared to run for governor.

Youngkin outlined his proposals Thursday morning to members of the General Assembly’s money committees, who will consider them as amendments to the state’s two-year spending plan when the legislature convenes its next session on Jan. 12.


https://www.washingtonpost.com/dc-md-va/2022/12/15/youngkin-tax-cuts-virginia-budget-proposal/

[EdinVA]

I wish these idiots would get rid of all the dam tolls....

[Right_in_Virginia]

He said “the clear consensus” of business leaders and economic experts is that “Virginia will follow the national economy into a recession next year which could last at least six months.”

But Youngkin said forecasts of future state revenue, even with the possibility of a recession, showed that Virginia can afford the cuts.

And while some of the biggest ticket spending increases he proposes are one-time investments made affordable because of the state’s current surpluses and reserves, Youngkin said the pay increases and other continuing expenses would be affordable even with the tax cuts.

Tax cuts

The governor’s new tax plan would lower the top individual income tax rate from 5.75% to 5.5%, despite a recent state study that recommended moving in the opposite direction to make the state’s income tax system fairer to Virginians who pay a higher share of their income in taxes than the wealthiest taxpayers.

Youngkin acknowledged that “we basically have a flat tax in Virginia,” but his proposal would cut state tax revenues by $330 million in the second year of the two-year budget, which he signed in June, and an additional $700 million a year in future years.

He proposes to help low- and middle-income taxpayers with another increase in the standard deduction for those who don’t itemize their deductions on income tax returns — raising the deduction by an additional 20% to make it double what it was before he took office a year ago.

A recent study by the Joint Legislative Audit and Review Commission focused on ways to make the state income tax system more progressive — so that those who earn the most pay the most — but it said the nearly 80% increase in the standard deduction approved this year is a step in the right direction.

“I think that’s an incredibly effective way to provide tax relief, especially to Virginians who need it most,” Youngkin said.

The governor wants to provide tax relief to businesses by cutting the corporate income tax rate from 6% to 5% — reducing state revenues by $362 million in the two-year budget — and providing a new 10% tax credit to small businesses, such as limited liability companies and S-corporations, that report income through their individual tax returns. The tax credit would cost $160 million in the two-year budget.

“It’s a way to provide a tax break directly to small businesses,” he said.

Youngkin isn’t asking for a second bite at the sales tax on groceries. The current budget eliminated the 1.5% state portion of the tax, while leaving the 1% that goes directly to local governments for their budgets. But he does want to eliminate the minimum age, now 55, for veterans to exempt up to $40,000 in military retirement income from state taxation under a plan adopted earlier this year.

In addition to tax cuts, the governor proposes an additional $450 million to bolster Virginia’s inventory of large sites that are ready for the big economic development projects he wants to attract in competition with North Carolina and other states, mostly in the South.

“We find ourselves as Virginians on the losing side of competitive battles with the states around us,” he said.

K-12 schools

Education remains among Youngkin’s top priorities, with almost $428 million proposed to help public school students recover the learning lost during the pandemic by paying for reading specialists in fourth and fifth grades and math specialists in kindergarten through eighth grade.

The money would pay for teacher retention and performance bonuses, and provide an additional $50 million for the nontraditional lab schools that remain one of his biggest priorities. The money would make up what the General Assembly cut when it approved $100 million for lab schools earlier this year.


More:  https://richmond.com/news/state-and-regional/govt-and-politics/youngkin-seeks-additional-1-billion-in-individual-corporate-tax-cuts/article_ed007e7e-6ba2-5242-b2c2-dd976aecd5cc.html

[Hoodat]

I wish these idiots would get rid of all the dam tolls....

I was shocked when they took down the Hampton Roads toll booths.

[Right_in_Virginia]

I wish these idiots would get rid of all the dam tolls....

What part of the Commonwealth do you live in @EdinVA ?

[EdinVA]

What part of the Commonwealth do you live in @EdinVA ?

The I66 corridor... every time Younkin lowers income taxes he raises the tolls...

[Right_in_Virginia]

The I66 corridor... every time Younkin lowers income taxes he raises the tolls...

Damn.  You're losing money in that corridor