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| Northam proposes new taxes on tobacco, gasoline; leaves income tax untouched | |
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| RICHMOND — Gov. Ralph Northam proposed new taxes on tobacco and gasoline, along with eliminating the state’s requirement for a yearly vehicle inspection, in a two-year, roughly $135 billion spending plan unveiled Tuesday morning. | RICHMOND — Gov. Ralph Northam proposed new taxes on tobacco and gasoline, along with eliminating the state’s requirement for a yearly vehicle inspection, in a two-year, roughly $135 billion spending plan unveiled Tuesday morning. |
| The budget that Northam (D) presented to the General Assembly’s money committees makes sweeping investments in public education, protecting the environment and training the workforce, but it does not alter the state’s income tax to pay for them. | The budget that Northam (D) presented to the General Assembly’s money committees makes sweeping investments in public education, protecting the environment and training the workforce, but it does not alter the state’s income tax to pay for them. |
| Northam proposes $733 million in environmental spending, with big chunk for Bay cleanup | Northam proposes $733 million in environmental spending, with big chunk for Bay cleanup |
| Instead, Northam is counting on continued growth in tax revenue, believing that a slight economic slowdown is more likely than a recession. And he proposed putting historic amounts into the state’s reserve funds to guard against trouble and protect the state’s prized Triple-A bond rating. | Instead, Northam is counting on continued growth in tax revenue, believing that a slight economic slowdown is more likely than a recession. And he proposed putting historic amounts into the state’s reserve funds to guard against trouble and protect the state’s prized Triple-A bond rating. |
| “It’s the most progressive budget that Virginia’s ever seen, but it preserves basic financial integrity,” Northam spokesman Grant Neely said. “Governor Northam has figured out a way to do both at the same time.” | “It’s the most progressive budget that Virginia’s ever seen, but it preserves basic financial integrity,” Northam spokesman Grant Neely said. “Governor Northam has figured out a way to do both at the same time.” |
| The governor is likely to face a supportive audience in next year’s General Assembly, where fellow Democrats will hold majorities in both the House of Delegates and Senate for the first time in a generation. To sweeten the deal, Northam included $100 million in unallocated funds that lawmakers can use for priorities of their own. | The governor is likely to face a supportive audience in next year’s General Assembly, where fellow Democrats will hold majorities in both the House of Delegates and Senate for the first time in a generation. To sweeten the deal, Northam included $100 million in unallocated funds that lawmakers can use for priorities of their own. |
| “This is the governor recognizing there is new leadership . . . and there may be different priorities than the old leadership had,” Secretary of Finance Aubrey Layne said. | “This is the governor recognizing there is new leadership . . . and there may be different priorities than the old leadership had,” Secretary of Finance Aubrey Layne said. |
| The governor could veto anything lawmakers devise. For their part, lawmakers could amend his whole budget into oblivion if they wanted to do so. But the move is a sign of the excitement Democrats feel about the chance to consolidate power. | The governor could veto anything lawmakers devise. For their part, lawmakers could amend his whole budget into oblivion if they wanted to do so. But the move is a sign of the excitement Democrats feel about the chance to consolidate power. |
| Northam has spent the past week previewing components of his spending plan. He proposed $22 million to fight racial disparity in the mortality rate among women during childbirth; $95 million for early-childhood education; $733 million for cleaning up the Chesapeake Bay and other environmental issues, although most of that spending would be bond-financed; and $145 million to make community college tuition-free for low- and middle-income people seeking skills for some professions. | Northam has spent the past week previewing components of his spending plan. He proposed $22 million to fight racial disparity in the mortality rate among women during childbirth; $95 million for early-childhood education; $733 million for cleaning up the Chesapeake Bay and other environmental issues, although most of that spending would be bond-financed; and $145 million to make community college tuition-free for low- and middle-income people seeking skills for some professions. |
| He also is proposing a promise that no locality would see a decrease in its funding for K-12 education, and he would commit $145.1 million for a 3 percent pay raise for teachers. | He also is proposing a promise that no locality would see a decrease in its funding for K-12 education, and he would commit $145.1 million for a 3 percent pay raise for teachers. |
| Northam’s staff said the budget is based on conservative projections for economic growth, with tax revenue expected to be up 4.5 percent next year and 3.7 percent the following year. | Northam’s staff said the budget is based on conservative projections for economic growth, with tax revenue expected to be up 4.5 percent next year and 3.7 percent the following year. |
| The governor proposed putting $300 million into the state’s two reserve funds to get them up to $1.9 billion by the end of fiscal 2022, or about 8 percent of the state’s budget. | The governor proposed putting $300 million into the state’s two reserve funds to get them up to $1.9 billion by the end of fiscal 2022, or about 8 percent of the state’s budget. |
| His budget proposes creating a state health-insurance exchange and using tobacco taxes to lower premiums for residents who participate. | His budget proposes creating a state health-insurance exchange and using tobacco taxes to lower premiums for residents who participate. |
| Northam would double the state’s cigarette tax to 60 cents per pack from 30 cents, which would remain among the lowest in the nation. That plus a 20 percent jump in taxes on other tobacco products would generate more than $120 million per year toward decreasing insurance premiums. | Northam would double the state’s cigarette tax to 60 cents per pack from 30 cents, which would remain among the lowest in the nation. That plus a 20 percent jump in taxes on other tobacco products would generate more than $120 million per year toward decreasing insurance premiums. |
| Virginia would have to seek a federal waiver to set up a reinsurance program to deliver the lower premiums. | Virginia would have to seek a federal waiver to set up a reinsurance program to deliver the lower premiums. |
| The budget also would increase the state’s gasoline tax by 4 cents per gallon for each of the next three years and then index it to inflation. That money would offset annual debt service for the state’s transportation fund. | The budget also would increase the state’s gasoline tax by 4 cents per gallon for each of the next three years and then index it to inflation. That money would offset annual debt service for the state’s transportation fund. |
| At the same time, Northam proposes eliminating the requirement for an annual vehicle safety inspection and cutting the state vehicle registration fee in half, which his staff said would save Virginians $280 million over the two-year budget. His office said there is no data showing a relationship between vehicle inspections and safety. | At the same time, Northam proposes eliminating the requirement for an annual vehicle safety inspection and cutting the state vehicle registration fee in half, which his staff said would save Virginians $280 million over the two-year budget. His office said there is no data showing a relationship between vehicle inspections and safety. |
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