The Comonwealth Institue is an independent budget watchdog group, monitoring the monetary and fiscal policies of the state and providing independent analysis. Our reports, analysis and statements are posted here.
A Full Plate: Recovery Act's Food Stamps Increase Boosting Local Economies Across Virginia
Nearly 700,000 Virginians have been able to keep food on the table as a result of the increase in food stamp benefits passed as part of the American Recovery and Reinvestment Act last February, according to new dta released today by The Commonwealth Institute for Fiscal Analysis.
>>Click here for benefit data by locality
Virginia's Hidden Budget Revealed
A host of mostly unknown and unreported tax expenditure programs are draining the state’s revenue by more than $2.5 billion each year, according to new analysis by The Commonwealth Institute. Yet despite their large costs, Virginia does not regularly evaluate or report on them.
>>Read the full report (pdf)
Federal Tax Provision Could Cost Virginia $119 Million in FY09-11
An obscure business tax break in the recent federal economic recovery package threatens to cost Virginia and most other states billions of dollars over the next couple of years, according to a report from the Washington, DC-based Center on Budget and Policy Priorities. But state lawmakers can take simple steps to prevent the loss.
>>Read the full report. (pdf)
Federal Budget Funding Critical to Virginia’s Future. Congress should adopt a budget resolution that reflects needed priorities.
Recipe for Disaster
HJ789: A Costly Cap on the Commonwealth's Public Investment
A bill currently being considered by the General Assembly threatens to impose rigid limits on state expenditures on even the most essential services- a path that will severely inhibit the ability of the Commonwealth to maintain the current level of services, keep pace with changing needs, and cope with new challenges.
A Failed Promise
HB2437: Single-Sales Factor Apportionment
At a time when Virginia’s budget shortfall continues to grow beyond $3 billion, the Virginia General Assembly is considering adopting a new method of taxing Virginia manufacturers that will reduce revenues by over $55 million per year.
The 2009 Crossover Tax Report
The Governor’s budget amendments, introduced Dec. 17, 2008, included a series of tax policy changes that are estimated to generate at least $304 million in revenue each year. In addition, an array of other initiatives would have an effect on state and local coffers. Find our where these proposals stand and who voted them up and down in our new crossover update.
>>Go to the update.
>>Download the pdf
The Sales Tax Dealer Discount (pdf)
In the budget amendments created to close the state’s $3 billion budget shortfall, Governor Kaine proposed eliminating Virginia’s Sales Tax Dealer Discount program. Senate Bill 987 and House Bill 2383 aim to achieve this critical, needed reform. >>Read the Full Report
Download the full report: The Sales Tax Dealer Discount (pdf)
Download the press release: Virginia Taxes are being Legally 'Skimmed' (pdf)
Budget Amendments (pdf)
The state’s current budget shortfall of $2.9 billion has led to proposed cuts that will significantly affect education, health care and public safety. But the Governor’s proposal also includes some significant reforms to create revenue, even during the recession.
Governor’s Budget Puts Revenue on the Table (pdf)
A Statement from the Commonwealth Institute for Fiscal Analysis
Sales Tax Diversion (pdf)
Sales tax diversion programs were set up originally to compensate shopkeepers for the cost and burden of keeping records and transmitting tax revenue to the state. But the programs have become dated and have lost touch with technology and practice. And in Virginia it costs taxpayers over $64 million a year and it keeps that money from going to its intended uses.
New National Report Lays Out Approach to Restructuring Federal Estate Tax
President-elect Barack Obama has proposed to make permanent the estate tax rules that will be in effect in 2009 under current law, including the $3.5 million per-spouse exemption. This would be an improvement in the sense that it would prevent the estate tax from disappearing. But it would be a regressive and costly giveaway to the very wealthiest families in America, because it would mean that the tax would affect even fewer estates than it does now. A new report by Citizen’s for Tax Justice assesses the impacts of the estate tax for all states – including Virginia – and identifies ways that the federal estate tax should be restructured.
Click for Virginia Report
Click for full Report
A Balanced Approach to Balancing the Budget (pdf)
Virginia’s fiscal picture is darkening by the day. The latest revenue forecast from the Governor’s team of economic advisers has placed the budget shortfall for the current two-year budget cycle at close to $2.9 billion under a low-growth economic forecast. As the state’s policymakers work to secure Virginia’s fiscal future, it is important that a balanced approach be taken. A “cuts-only” strategy is not what the Commonwealth and its residents need during these tough times.
The Single Sales Factor
The Virginia General Assembly is studying whether to give Virginia’s manufacturers the option of calculating their state corporate tax using a different formula than other businesses. But there are significant drawbacks associated with this approach to corporate taxation.
123,996 Virginians Haven't Claimed Federal Stimulus Payments
123,996 low-income seniors, veterans, and people with disabilities in Virginia have yet to claim their economic stimulus payments from the federal government, according to The Commonwealth Institute for Fiscal Analysis.
The Road Less Taken: Creating Fairer Taxes, As Well As Better Highways
Governor Kaine and the General Assembly have a major crisis on their hands: they have a comprehensive plan to fix the Commonwealth’s transportation woes, but no money to pay for it. Funding schemes under consideration offer a variety of options including a range of tax increases. But another problem looms if the proposals currently being circulated are adopted: Virginia will have unintentionally hurt its low- to moderate-income wage earners more than higher income workers.
The 2008-2010 Budget and Caboose Bill
The General Assembly passed a compromise budget on March 13, 2008. The passed budget incorporates the General Assembly’s combined changes to the budget introduced by Governor Kaine on December 17, 2007. It also takes into consideration the revenue reforecast released in mid-February. The Governor has time now to consider the compromise budget and offer his amendments to it. The budget will then return to the General Assembly for a one day veto session on April 23.
The Single-Sales Factor (SSF): The Economic Development Tool That Isn’t
The General Assembly is considering a major change to the way Virginia taxes corporations (House Bill 1514). The new approach, a single-sales factor, is often heralded as a useful tool for economic development because it is said to make expansion of property and payroll within a state more attractive. But, there are significant drawbacks to this costly new approach. Before adopting it, lawmakers need to fully consider the effects that HB1514 is likely to have on Virginia’s economy.
How Property Taxes Hit Home: Understanding Property Taxes in Virginia
The Governor and General Assembly are offering a potential solution to the problem of rising property tax bills: a constitutional amendment to allow local government to rollback as much as 20 percent of a home’s value from property tax through what is called a homestead exemption. But the homestead exemption may not provide the relief people are looking for. Alternative reform proposals — such as a flat dollar exemption or a circuit breaker plan — could offer targeted relief to those Virginians most in need, without threatening the ability of local governments to provide the quality of services that residents have come to expect and demand.
The Governor’s Proposed Budget: 2008-2010
The Governor’s proposed budget lays out a reasonable approach for closing the funding shortfall in the current budget and modest expansions of programs in select areas for the upcoming biennial budget.
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