Governor Glenn Youngkin asked the administration’s finance team to perform a mid-session review which added another $1.25 billion to the Fiscal Year 2022 revenue forecast. Youngkin highlighted the additional expected cash in a Friday letter to Virginia’s top money legislators as part of his push to save his broad tax reduction plan.
Youngkin wrote, “[T]he bottom line is taxes paid to the government are soaring and the revised revenue forecast estimates the Commonwealth will collect $1.25 billion more in the current fiscal year. That, of course, is on top of the additional $3.3 billion added to the original forecast last December. This is a staggering number, the largest mid-session re-forecast in anyone’s memory. The stunning amount of money being collected from taxpayers is the direct result of over taxation. Put simply, without significant tax relief, the Commonwealth’s general fund collections will grow by over 40 percent between 2018 and 2024.”
The extra money in the forecast is critical for Youngkin’s pitch to legislators who are currently crafting a budget. Democrats have highlighted Youngkin’s calls for significant increases in education spending and other areas alongside his calls for broad tax cuts. Both chambers unanimously passed bills to send $300 refunds to individual taxpayers, and there has been bipartisan support for at least a partial grocery tax elimination. However, Youngkin’s other key tax policies face resistance in the Senate.
In his letter to Senate Finance and Appropriations Chair Janet Howell (D-Fairfax) and House Finance Chair Barry Knight (R-Virginia Beach), Youngkin called the new forecast a “conservative view,” and emphasized that Virginia law requires adding $498.7 million of the additional expected revenue to the Commonwealth’s rainy day fund. That still leaves $751.4 million to spend.
“Given the surplus that these and the prior years’ results have generated, the Commonwealth is in an extraordinary position to strengthen our financial position by further building our rainy-day and other reserve funds, further reduce our long-term pension plan obligations, invest in a number of strategic one time capital projects and, most importantly, return taxpayer money back to them, reduce our ongoing tax burden, and maintain Virginia’s AAA bond rating,” Youngkin wrote.
On Thursday, Youngkin made an appeal to Virginians, asking them to contact their legislators in support of his tax cuts and refunds. His Friday letter argues that the growing revenue does not indicate that Virginia’s economy is actually growing.
Under the previous administration, Virginia received awards as a top state for business, but Youngkin said that Virginia is losing jobs and people to other southern states, and that his administration is focusing on workforce development and attracting talent.
“Looking back over the past eight years, or just since the pandemic began, Virginia is not competing at an elite level – despite our strong and unique assets and numerous accolades,” Youngkin said.
Youngkin also cited a high cost of living in Virginia, caused in part by taxes that are “significantly above almost all of our competitor states.”
He wrote, “All of that is why significant tax relief, including eliminating the grocery tax, doubling the standard deduction, providing a tax rebate, eliminating taxes on $40,000 in veterans’ retirement income, and deferring the most recent increase in the gas tax, should be the centerpiece of any bipartisan compromise on the budget.”
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Eric Burk is a reporter at The Virginia Star and The Star News Network. Email tips to [email protected].
Photo “Glenn Youngkin” by Glenn Youngkin. Background Photo “Virginia State Capitol” by Martin Kraft. CC BY-SA 3.0.
