Budget & Revenue

Virginia lawmakers will face a decision at some point over how to respond to last year’s federal tax legislation and how federal changes will impact state income tax revenues. First, some context: As a share of the economy, state revenues are still not back to pre-recession levels which has led to large unmet needs in crucial areas like K-12 education, health care, and infrastructure. Deciding whether to conform to – or decouple from – federal legislation could mean the difference between hundreds of millions more in state revenues to invest in these key priorities or not. Legislators should not let this critical opportunity pass by. They should conform to the new tax law.

Special Session: Comparing the governor’s, House, and General Assembly budgets to the FY 2018 budget With no agreement on the...

Tomorrow, the U.S. Supreme Court will hear arguments on a dispute between South Dakota and the online retailer Wayfair over whether Wayfair is responsible for collecting sales tax for purchases and sending it to the state. If the Supreme Court rules in favor of South Dakota, policymakers in Virginia and other states should take notice and act to make sure big multi-state online retailers are collecting and remitting sales tax for residents of their states. 

This past Sunday the House and Senate money committees put forward their proposals for the state’s next two-year budget – amending what former Governor McAuliffe proposed this past December. And what a stark contrast they offer: House Appropriations invests hundreds of millions of dollars to improve vital public services with funds from accepting federal funds to expand health care coverage to thousands of Virginians, while the Senate Finance Committee proposes deep cuts to the introduced budget. 

The state’s next two year budget is now before state legislators. On Sunday, they will reveal their amendments to the budget introduced by former Governor Terry McAuliffe in December. The proposal before them makes important progress in a number of key areas of support for Virginians. What happens next will influence whether more Virginians have access to affordable health care, whether Virginia’s schools have more adequate and equitable state funding, and whether the state will have enough revenue to invest in families and communities. 

There’s so much good TV these days that some have said we’re in a new Golden Age of TV. That’s up for debate, but one fact is undeniable: more and more of our state tax dollars are subsidizing TV productions despite little evidence of lasting economic gains.

When it comes to helping working families, the federal earned income tax credit (EITC) is one of the biggest success stories we have, lifting three million children out of poverty each year. The credit provides extra support to millions of workers and their families, including over 600,000 working households across Virginia. For families struggling to make ends meet, the EITC helps them put food on the table, pay utility bills, and provide opportunities for their children. And research shows that the positive impacts of the credit can last a lifetime, extending even into adulthood for the children of families who received the credit. 

The House Appropriations and Senate Finance committees are currently considering the governor’s 2018-2020 budget (FYs 2019 and 2020) and amendments to the budget for FY 2018. Click here or on the image below for our summary level assessment of certain key changes in general fund revenues and spending proposed by the governor for FY 2019 and FY 2020 compared to the amended budget which passed in Spring 2017.

Virginia’s current revenue system isn’t keeping up with changes and growth in the overall economy, and that’s putting the future prosperity of families and businesses at risk.