March 3, 2023
Va. lawmakers should put kids before corporations
At this moment, as lawmakers negotiate over the vastly different budget proposals that are on the table, the stakes are unusually high for families in Virginia. That is because the proposals from Gov. Glenn Youngkin and the House of Delegates would put the needs of profitable corporations over families.
For skeptical readers, let us review the numbers. The centerpiece of the governor’s plan is a corporate tax cut that would lower rates from 6% to 5%. The price tag for this proposal is more than $360 million in this budget, and it balloons to over $680 million in the next budget cycle. This is the most expensive tax proposal that has been put forward in this biennium.
If this idea is adopted, then corporations would pay a lower tax rate than the 5.75% that many working families in Virginia pay on their income. But the Youngkin administration has indicated they want to go even further and cut corporate taxes to 4% in the future. It is hard, based on these facts, to imagine a more clear example of prioritizing corporations over people.
Other ideas from the governor and House of Delegates, like lowering the personal income tax rate, would give the lion’s share of the benefit to people with the highest incomes. This is because the threshold for Virginia’s top tax bracket of 5.75% is $17,000, which means that a teacher who makes $42,000 a year is in the same tax bracket as a millionaire. To lower the top personal income tax rate to 5.50%, as the governor wants to do, helps the millionaire far more than the teacher. But with a cost of over $330 million, this proposal would blow another hole in the budget.
So what does it look like to prioritize kids and families, rather than corporations? It looks a lot like the Senate’s budget, which rejects the governor’s tax proposals and instead invests an additional $1 billion in direct aid for public education relative to the current budget. That is compared to just $321 million in additional direct aid for public education in the governor’s budget, of which only a paltry $24.1 million is for ongoing initiatives to improve K-12 public schools.
To illustrate what this could mean, let us again talk numbers. If the Senate’s proposal carries the day, it would provide the state’s share of funding for over 1,200 staff dedicated explicitly to the mental and physical health of our students, over 500 more instructors who provide support to English learner students, 1,900 temporary instructional assistants in schools facing the greatest barriers to student achievement and accreditation and an additional 6,500 support staff. All told, it would put nearly 10,000 additional staff in our schools to support our teachers and help our kids reach their full potential.
These facts signal a clear message: Virginia has the resources to be a leader in education and to make sure every student in every ZIP code has access to a high-quality education, but policymakers must choose to invest these resources rather than give them away.
There are other ideas that deserve to be in the mix too, especially as family budgets are tested by rising costs. For example, improving the state’s Earned Income Tax Credit by making it refundable at 20% of the federal credit would target relief to families who need it most — putting a few hundred dollars on average back in their pockets.
Unlike other costly tax proposals, such as the corporate income tax rate cut, improving the EITC to 20% refundability would cost just $36.5 million, leaving ample resources to fund and support our students, educators and school staff, as the Senate’s budget does.
As lawmakers search for a final budget deal, it is worth remembering that budgets are just as much about values as they are about numbers. Prioritizing corporations drains our shared resources and limits our ability to meet our shared goals. Prioritizing kids through family-focused tax policy and education funding is an investment in all of us.