I've got to admit it's getting better (Better)
A little better all the time (It can't get no worse)
I have to admit it's getting better (Better)
It's getting better
~The Beatles, "Getting Better All the Time"
If Governor Ralph Northam’s address this week to the Joint Money Committees, still chaired by members of the opposite party, was a Beatles song, it would have started with “You have to admit it’s getting better, a little better all the time.”
In fact, the 2019 General Assembly Session presents a once in a lifetime opportunity to make significant investments for Virginia’s long-term success including in education, broadband access, affordable housing, and protecting our natural resources. And it can be done while shoring up our reserves, preserving our AAA bond rating and providing targeted tax relief.
So, where is this money coming from?
Virginia is on positive financial footing resulting in better revenues than anticipated and all indicators suggest that these positive economic trends should continue. This, coupled with a few other things happening this year, creates an opportunity to adopt a budget that truly reflects our priorities.
Governor's Proposed Budget Amendments for 2018-2020
Internet Sales Tax
State Governments are now able to charge and collect sales tax on all internet sales, regardless of whether online merchants have a physical presence in the Commonwealth. Given the amount of conversation surrounding the internet sales tax, this is something that we all expect to address this session.
Federal Tax Conformity
The Governor’s budget assumes that, as in previous years, the General Assembly will conform to changes in the federal tax code. Conformity is usually a routine, straightforward action that comes before any conversation we have on tax policy. Because of the changes to the standard deduction, fewer Virginians will itemize on their state income tax returns. So, while the total tax burden for many in our area will decrease, Virginia’s income tax receipts are expected to rise.
Earned Income Tax Credit Refundability
The Trump tax cuts are mainly benefiting high earners and corporations – that’s why Governor Northam proposes targeted tax relief that will let working Virginians in every locality and every region keep more of their paychecks. $216.3 million (one time, sunsets with Trump tax cuts) will make the Earned Income Tax fully refundable, which will provide an estimated 600,000 working Virginians with targeted tax relief.
Every child in the Commonwealth deserves access to a world-class education. To compete with other states on attracting and retaining the best teaching talent, the Governor proposes adding $88 million to provide teachers a long overdue 5% raise effective July 2019. Another $80 million in one-time revenues will go toward state aid for school construction through low-interest loans and $70 million will be added to support high-needs students and supplement general aid on a per pupil basis.
Student Health and School Safety
Virginia is a nationally-recognized leader on school safety, but we need to take a more holistic approach when it comes to creating a safe learning environment for our students. $36 million will fund additional school counselors, the first-installment of a three-year, phased strategy to hire enough school counselors to reduce caseloads to 1:250 across all grade bands, the nationally-recognized best practice.
Higher Education Affordability
Although Virginia’s public higher education system is top-ranked and well-regarded, having best-in-the-nation colleges and universities won’t mean much if our students can’t afford to attend them. More than $20 million will go to additional need-based financial aid for public colleges and universities and the Tuition Assistance Grant Program.
Higher education institutions will also be required to develop tuition predictability plans for in-state undergraduates, outlining the expected cost of tuition and fees for at least three years.
Virginia families should be able to count on stable housing. The Housing Trust Fund, which supports local and regional efforts to address housing affordability would get an additional $16 million with $2.6 million going for expanded legal assistance for Virginians facing eviction proceedings.
Energy and Environmental Protection
The Governor proposes investments to improve water quality and to protect the progress we’ve made on restoring the Chesapeake Bay. This means $90 million to fund technical assistance for eligible farmers to prevent pollution from farm runoff and $50 million (one-time) to the Stormwater Local Assistance Fund to help urban and suburban areas reduce pollution coming off impervious surfaces.
Reliable, safe infrastructure is critical to our economy and quality of life. $75 million (one-time) will go to the Virginia Transportation Infrastructure bank to help fund infrastructure projects across the Commonwealth. $20 million (one-time) to develop build-ready sites, furthering Virginia’s ability to compete for large manufacturing companies.
You can review the Governor’s complete proposed budget here.