March 28, 2019
Legislators Should Act During Reconvened Session to Increase Opportunity
Legislators have the opportunity to take action on April 3 to strengthen our communities so that every Virginian, no matter what they look like or where they were born, has a better shot at reaching their full potential. This includes proposed changes by the Northam administration such as improving the supply of affordable housing, ending driver’s license suspensions solely due to unpaid fines and fees, broadening the benefits of Virginia’s recent tax bill to include more working families who are struggling to make ends meet, closing loopholes to make sure wealthy out-of-state corporations pay their fair share, and putting more counselors in schools in future years to help every child succeed. Taking these steps won’t fix everything, but they are concrete steps legislators can take this year to build towards prosperity for all of us, no exceptions.
Building a Budget that Expands Opportunity
The state budget is one of the most important policy documents that is considered by legislators each year, providing resources for the building blocks of opportunity such as education and public health. The administration has proposed a number of amendments that would improve the budget compared to what was passed by the General Assembly in late February.
Below are some highlights from the proposed changes:
Making Virginia’s tax code fairer
Under a new state tax law, many Virginia tax filers will receive checks of up to $110 (or up to $220 for married joint filers) later this year. However, as written, this provision was set to provide little to nothing for many of Virginia’s lowest-income working families, many of whom are Black and Latinx families. Many of these families have lower incomes and lower income tax bills due to employment barriers and discrimination that reduce their earnings. Meanwhile, many of these same families are paying a high share of their income in sales and excise taxes. Under a proposed amendment, these one-time checks would be available to about 149,000 additional taxpayers with incomes of less than $50,000, so long as they have state income tax liability after factoring in all deductions (but before applying tax credits). The check amounts will equal the amount of a family’s state income tax liability before credits (up to $110 for individuals, or $220 for married couples).
Sales tax legislation passed during the 2019 General Assembly session makes a commonsense update to Virginia’s sales tax requirements to align our state’s tax system with the rise of e-commerce. Requiring large online retailers and marketplace facilitators to collect sales tax will provide additional resources for state and local governments, increasing funding for K-12 education, transportation funding, and other budget priorities. A proposed amendment clarifies that all large internet retailers and marketplace facilitators must comply with the new requirements as of July 1. Previously, there was the potential for large marketplace facilitators to apply for and receive a 90-day waiver from the law – which came with a potential state and local revenue loss of over $40 million.
Removing barriers to work by expanding access to driver’s licenses
The amendments include language restoring access to driver’s licenses for individuals who have only failed to pay fines, court costs, forfeitures, restitution or penalties assessed against them and states that the Department of Motor Vehicles (DMV) shall not charge a reinstatement fee for them. Money was included in the governor’s introduced budget to pay for these costs and the proposed amendments include technical fixes to make sure the DMV has sufficient resources to provide high-quality services. Currently, working Virginians who are too poor to pay court costs can lose their driver’s license, forcing them to choose between breaking the law and losing their only way to get to their job. Removing this barrier is particularly important for Black communities – Legal Aid Justice Center has found that “African American people make up only twenty percent (20%) of Virginia’s population, but receive nearly half of the orders of suspension for unpaid court debt. In addition, African American people make up nearly sixty percent (60%) of convictions for driving with a suspended license where the reason for license suspension is unpaid court debt.” Many advocates, including Legal Aid Justice Center, have worked for years to see this important reform, and you can contact your legislator to support this change.
Providing funding to make sure every Virginia community is counted in the 2020 Census
The amendment restoring $1.5 million of funding for Census outreach is vital for making sure we get a fair count of our community members – particularly in areas that are hard to reach and in communities of color. There’s a reason the NAACP is suing the federal government over the lack of Census funding – it’s because they are see the writing on the wall that insufficient funding will lead to an undercount in communities of color. The federal government isn’t doing their part this time around, and an undercount would have major implications for equal representation and federal funding that helps boost low-income communities, particularly communities of color. Voices for Virginia’s Children has an action alert so you can ask your legislators to support this amendment.
Boosting the availability of affordable housing
The proposed amendment would increase the availability of affordable housing by providing an additional $4 million this year for Virginia’s affordable Housing Trust Fund. There are 1.8 million Virginia families who are paying more than they can afford for housing, and this particularly hits families of color. Families of color in Virginia are less likely to already own their homes, in part because they are less likely to inherit a home. While 69 percent of white Virginia households own their homes, due to the historical and continuing barriers facing communities of color such as mortgage discrimination, only 44 percent of Black households own their homes. And 3 in 10 Black households pay more than 30 percent of their income toward housing costs, compared to less than 2 in 10 white households. The numbers are almost identical for Latinx communities, who also face discrimination and are less likely to have inherited homes. Virginia can and should increase support for the Housing Trust Fund, which is primarily used to increase the supply of affordable homeownership and rental housing.
In addition to the proposed improvements to the state budget, the administration made a number of recommended changes to other legislation and also vetoed some bills. We have previously highlighted some of the punitive anti-immigrant legislation that the governor vetoed. Below are some other important recommended changes and vetoes that legislators will be considering on April 3. (This is not a comprehensive list – you can find more information on the governor’s recommendations and vetoes through the state Legislative Information System.)
Increasing school counselors going forward
The General Assembly-approved budget will increase funding for school counselors by $12 million. This investment will increase the number of counselors in schools and reduce student caseloads for counselors to 455 students in elementary schools, 370 students in middle schools, and 325 students in high schools. Yet, because these staffing levels are still below the recommended standard of one counselor for every 250 students, the governor amended legislation to make further progress in future years. Starting in 2020-2021, the state would provide an additional $24 million (as estimated by proposals this year to reach the same standard) to fund additional counselors in schools.
Restoring consumer protections for Virginians on the individual marketplace
The governor has taken several steps to address legislation that would have eroded consumer protections for those with pre-existing conditions, saddled consumers with high out-of-pocket costs, and led to higher premiums for those on the federal marketplace. Vetoes on bills that would have expanded access to catastrophic and short-term, limited-duration plans is a step in the right direction for health care consumers who get their insurance on the individual market.
Gov. Northam also took action on legislation that would have further deregulated Association Health Plans leading to minimal state oversight, the erosion of protections for those with pre-existing conditions, and higher premiums for those on the federal marketplace. The initial bills would have made them more widely available, leaving a larger share of Virginians at the risk of becoming underinsured. Northam’s proposed substitute to legislation dealing with Association Health Plans, while still posing some risks to consumers, is a big improvement over the original language. They would restore important protections for those with long-term diseases, strengthen oversight of such plans, and limit which groups could offer these plans.