I hope you are staying cool in this summer weather! While I personally love the heat, it can also be dangerous. Heat was a factor in 1,577 deaths nationally in 2021, so please make sure to take care of yourself and check on vulnerable neighbors.
Annual Sales Tax Holiday
If you are like the Bulova family, your kids are getting ready to go back to school in just a few weeks. And, if your kids are like Grayson Bulova (our rising 9th grader), they may have grown a couple extra inches over the summer!
This weekend you can save money on back-to-school supplies and clothing during Virginia’s annual sales tax holiday.
The holiday begins Friday, August 5 and goes through Sunday, August 7.
Don’t have children? You can also enjoy tax free shopping on hurricane and emergency preparedness supplies as well as certain ENERGY STAR and WaterSense products.
Details can be found at Virginia Sales Tax Holiday. It’s a great time to stock up on gear for the new school year, plan for emergency situations, or simply invest in energy efficiency to save money for the long haul.
General Assembly Tax Reforms
Speaking of taxes, the General Assembly made several changes to tax policy that will go into effect for Tax Year 2023.
Not too long ago, at the beginning of the COVID-19 pandemic, Virginia had to cut its budget by $2.8 billion in the face of severe revenue shortfalls. Fortunately, our historically conservative budgeting process, in combination with a significant infusion of federal dollars, allowed us to weather the financial storm. Two years later, revenues are far outpacing forecasts – with FY2022 ending in a $2 billion surplus.
We do need to be careful not to get ahead of ourselves by creating new programs that can’t be sustained in the long term or by over-cutting taxes in a way that structurally unbalances our budget. However, the situation presents a rare opportunity to make much needed structural adjustments to our tax system.
It also comes at a time when Virginians are hurting with the impacts of high inflation.
In the end, I believe the General Assembly struck a good balance between one-time rebates (which do not create a long-term obligation) and changes to our tax system. Here is an overview of the major items.
State Tax Rebate Checks. Everyone who paid state income taxes for Tax Year 2021 is eligible for a rebate check. Single filers will receive up to $250 and couples filing jointly will get up to $500. Checks will be distributed in October. Click here for details. A rebate program provides the most flexibility since it can be used on gas, food, clothing, or any other items.
Tax Policy Changes. In addition to one-time rebates, the General Assembly made several permanent changes to tax policy:
In all, these changes are expected to reduce the average family’s tax burden by more than $1,000 in Tax Year 2023.
In addition to tax reforms, we were able to make significant one-time expenditures to help ensure that our budget is structurally balanced and to address long-standing needs. This includes $750 million to stabilize the Virginia Retirement System, $499 million to further bolster the revenue stabilization fund, and $2.5 billion to implement previously authorized but unfunded infrastructure improvements and deferred maintenance that otherwise would have been funded with debt.
A Problem – Legislating Through the Budget
One of the things I love about Virginia’s legislative process is the “one-object rule.” This is enshrined in the Virginia Constitution and means that each bill can only address one issue. As a result, most bills are only a couple of paragraphs or pages long. The system creates transparency by ensuring legislators and voters know exactly what is being voted on. This makes us patently different than what happens in Washington, where massive omnibus bills are often the norm.
The budget is supposed to abide by this rule and deal only with appropriations-related items. That doesn’t mean there isn’t language directing how money should be used. That is totally appropriate. But it does mean we should avoid creating new laws through the budget bill.
While the General Assembly has not always lived up to the spirit of this rule, the most recent budget presents a caution flag that we need to take very seriously. As noted in this Virginian-Pilot article, the budget includes several items that should have been debated as separate bills. And in fact, some of them were debated – and defeated – during the regular session. This includes language on casinos, criminal justice reform, and marijuana possession – just to name a few. Since the final budget is negotiated by a conference committee and is an up-or-down vote, legislating through the budget means the public is denied an opportunity to weigh in. We need to do better in the future.
House and Senate Page Programs
The House and Senate Page Programs are now accepting applications for the 2023 General Assembly session!
These are fantastic learning experiences where students have an opportunity to gain valuable civic and professional experience by working directly with legislators and legislative staff. Applicants must be 13 or 14 years old by January 11, 2023 and in good academic standing. The position is paid, and pages live in Richmond during session (they come home on weekends). The program ends with a mock session where pages introduce, debate, and vote on legislative initiatives on the House and Senate floors. Click here for more information and let me know if I can answer any questions.
It is an honor to serve you! Please don’t hesitate to contact me if I can be of assistance.