Delegate Mark Cole

The BPOL Tax: A Bicentennial Only Local Governments Could Celebrate

The local governments are at it again. Every year during session they use the tax dollars of those they represent — us! — to lobby directly against our interests. The best example is their years-long opposition to property rights protections, at which they finally failed this session. (By the way, if they claim to represent their residents, why are they afraid of a vote by those same people to ratify or reject property rights?) Now, they are trying to scuttle HB 10, patroned by Delegate Mark Cole (R-88, Fredericksburg), which would give a modest — and fair — amount of tax relief to small and family owned businesses by prohibiting localities from increasing their BPOL Tax for four years above what it is during the 2011 license year. But that doesn't sit well with the local government lobby, which has an unquenchable thirst for our hard-earned tax dollars.

The BPOL Tax is one of the least fair of all taxes because it taxes the gross receipts on a business, not its profits. For example, a business that brings in receipts of $500,000 but loses $100,000 gets taxed on the $500,000! This kills small and family owned businesses and stifles job creation.

While local governments talk about their "pain" who speaks for the hardships facing small businesses and individuals? It's almost funny how government always asks us to sacrifice but itself never sacrifices anything —  especially local governments who see themselves as their own entity, rather than stewards of their communities' interests, and are in the game to preserve their interests and power, not unlike any other special interest or industry.

HB 10 passed the House by an overwhelming bipartisan majority (88-12) early in session, but only now is getting its day in the Senate, where it will be heard tomorrow morning in the Finance Committee. One of the many fun things devoid of an already dour session this year is a little-bill- that-could. You hear of them every year, a bill that comes out of nowhere and does some good things. Maybe HB 10 is it.

Last year, Delegates Cole and Sal Iaquinto (R-84, Virginia Beach) were successful in passing some helpful changes to the inherently unfair BPOL Tax, which is "celebrating" its bicentennial year this year — originally levied to pay for the War of 1812Unlike this modest bill, which has a sunset provision, the BPOL Tax was never discontinued when it accomplished its goal 200 years ago — a never-ending tax of dreams for the Big Government types. It's time for a little more for fairness and suppression of the Big Government appetite.

Not only is the BPOL Tax bad policy, it is particularly heinous during a slow economy. The bill also gives localities the option to impose the BPOL Tax on the Virginia taxable income of a corporation, the net income of a sole proprietorship, and the net income of a pass-through entity, which simply is the right and just way to tax businesses.

With so much going on this session, the little-bills-that-could get lost in the pack. But HB 10 can make an impact for tax fairness, job growth and small government with a victory tomorrow in Senate Finance. While local governments fight for themselves, we can fight back.

Please contact senators on the Senate Finance Committee (click here) and urge them to vote for HB 10 tomorrow!

A Funny Thing Happened On The Way To Small Business Tax Relief!

A funny thing happened Friday afternoon on the way to some much needed tax relief for small and family-run businesses: HB 1437, patroned by Delegate Mark Cole (R-88, Spottsylvania), which would grant localities the power to keep or discontinue the dreaded BPOL Tax, was recommitted to the Senate Finance Committee from the Senate floor even though that committee earlier in the week passed in unanimously!

Now, we need your help. Please contact senators, on the Finance Committee, and ask for their vote tomorrow morning to report this bill back to the Senate floor!

Here's what happened: Early last week the bill passed out of the Finance Committee unanimously and went to the full Senate in the "uncontested bloc." That’s where bills without dissenting committee votes go and almost always are passed, without controversy, in a group. However, on the bloc's "third read" Friday — the vote which would've sent HB 1437 to Governor Bob McDonnell — Senator Charles Colgan (D-29, Manassas), who chairs the Finance Committee, pulled it out of the bloc and his motion to "recommit" the bill to his committee did not meet opposition.

We're not sure why this bill was sent back to the Finance Committee, where no interest groups spoke in opposition it. It passed the House 94-5, but we've seen in the past that big, bipartisan margins in the House mean nothing in the Senate.

The BPOL Tax was established to fund the War of 1812. Not only has it outlived that purpose by 199 years, it is inherently unfair, taxing Virginia businesses on gross receipts rather than profit. That means companies that lose money still pay a tax! It punishes many small, family-run businesses that run on tight profit margins. In this down economy, government should do all it can to encourage job growth. The BPOL Tax kills jobs and stunts the growth of small businesses — which create 75 percent of all jobs in America.

This bill is entirely permissive. Localities, as unfair as it is, may still keep the BPOL tax if this bill becomes law. However, it allows them to tax businesses at the Virginia Taxable Income rate instead, which is entirely fair. Plus, this bill would return more decision-making authority to government closest to the people. Denying localities the option to end this tax after 199 years is indefensible. This option would give localities an edge in attracting new businesses and encourage the start up of new locally-owned businesses as well. 

State government should do all it can to help businesses thrive. Instead, we hear stories all the time, such as the small business owner in Norfolk who lost $70,000 last year, covered the loss with his savings, and still had to pay $4,000 in the BPOL Tax! Is that how we create jobs in Virginia?

The War Of 1812 Is History. The BPOL Tax Should Be, Too!

The pace of the General Assembly moves very fast, especially during the short session when committee hearings are compressed into a shorter period. Just this afternoon we were notified that HB 1437, patroned by Delegate Mark Cole (R-88, Spottsylvania), which would grant localities the power to keep or discontinue the dreaded BPOL Tax, is in the Senate Finance Committee tomorrow morning. This bill passed the House last week by a 94-5 margin. But we’ve seen in the past that big, bipartisan margins in the House mean nothing in the Senate. So, please contact members of the committee and ask them to vote in favor of this bill!

The BPOL Tax was established to fund the War of 1812. Not only has it outlived that purpose by 199 years, it is inherently unfair, taxing Virginia businesses on gross receipts rather than profit. Companies that lose money still pay a tax! It punishes many small, family-run businesses that run on tight profit margins. In this down economy, government should do all it can to encourage job growth. The BPOL Tax kills jobs and stunts the growth of small businesses — which create 75 percent of all jobs in America — by siphoning away capital they would invest in their businesses and use to hire new employees.

While the local government lobby, which uses your hard-earned tax dollars to lobby for more power at your expense, says it can't afford the loss in tax revenue, HB 1437 only gives localities the option of removing the BPOL Tax. Denying localities the option to end this tax after 199 years is indefensible. Just think: If localities had that option, they could compete against each other for businesses to locate in their city or county to create new jobs. The removal of the BPOL Tax will encourage the start up of new locally-owned businesses as well. 

It's time local governments stop complaining about the loss of revenue and showed concern for the loss of businesses and jobs. Local government always will be in business — but locally owned, small, family-run businesses do not have that guarantee. Government should do all it can to help them. A small business owner in Norfolk lost $70,000 last year, covered by his savings, and still had to pay $4,000 in the BPOL Tax! (See WSLS.com.) Is that how we create jobs in Virginia?

Your Constitutional Protections At Stake Tomorrow

The pace of the General Assembly moves very fast, especially during the short session when committee hearings are compressed into a shorter period. Just this morning we were notified that four important proposed constitutional amendments, passed last week by the House, already are scheduled for tomorrow morning in a Senate Privileges and Elections sub-committee. Usually, there is at least a day or two respite and time to regroup right before or after "crossover," but the pipeline is full of bills and the legislation continues to flow. We need your urgent help to contact members of the sub-committee and ask them to vote for these important constitutional protections. Only four votes stand in the way killing these highly popular and needed measures without the full debate of the Senate, much less the full committee. So, your action is needed now.

HJ 615, patroned by Delegate Bill Janis (R-56, Henrico) and Bob Marshall (R-13, Manassas), would safeguard your tax dollars by banning tax and fee increases in the budget bill. The budget bill is supposed to be a spending bill only. But in recent years, governors and legislators have stuck tax and fee increases in it (such as when Mark Warner pushed through his infamous tax increase). If those revenues are needed, delegates and senators should have the courage to vote on tax increases separately, up or down, not buried in a must-pass budget with deadline pressure to approve so that state government can continue to function.

HJ 539, patroned by Delegate Mark Cole (R-88, Spotsylvania), is another important safeguard to your hard-earned tax dollars. It would require a three-fifths super majority vote of the General Assembly to raise state taxes and the same super majority for your city, town or county governing body to raise local taxes.

HJ 593, patroned by Delegate Bill Carrico (R-5, Galax), would protect Virginians' right of religious expression by allowing prayer and the recognition of religious beliefs, heritage and traditions on public property, including public schools. This will safeguard from court action, for example, students who offer prayers at school assemblies.

HJ 614, patroned by Delegate Tag Greason (R-32, Potomac Falls) would allow the General Assembly to provide for loans and grants to, or on behalf of, candidates for the military chaplaincy who attend in-state nonprofit institutions of higher education whose primary purpose is to provide religious training or theological education.

Urgent action is needed since the sub-committee meets tomorrow! If these resolutions die in sub-committee, the opportunity to incorporate them into the Virginia Constitution will be set back three more years. Contact the members and ask they vote for HJ 615, HJ 539, HJ 593 and HJ 614 tomorrow morning in Senate Privileges and Elections sub-committee.

General Assembly Week In Review: Several Victories, Much Craziness (And More To Come)

Nothing adequately can explain the pace of the General Assembly. Especially the short session. More goes on that we can — and would love to — report. It is no exaggeration to say that we could employ an entire news team to cover all that we see (and hear). Lobbying and blogging is a killer. But here's a week in review of some significant legislation.  We had several legislative victories this week, including five resolutions to amend the Virginia Constitution this morning in the House Privileges and Elections Committee:

HJ 593, patroned by Delegate Bill Carrico (R-5, Galax), is a religious liberty amendment that protects public prayer. It passed by a 14-7 vote after some committee liberals raised several objections.

Also regarding religious liberty, HJ 614, patroned by Delegate Tag Greason (R-32, Loudon), which prohibits the state from blocking tuition loans and grants to students seeking theological education for the purposes of becoming a military chaplain. It passed with only three dissenting votes. This bill was debated thoroughly in sub-committee earlier in the week. The state already pays the salary of chaplains and Delegate Greason's amendment would allow for tuition assistance as well.

Three limited government resolutions also passed. HJ 539 requires a super majority vote by the General Assembly and local governing bodies to increase state and local taxes; and HJ 540 limits increased spending by the General Assembly and local governing bodies to the previous year's level plus the percentage increase in population and inflation. Both are patroned Delegate Mark Cole (R-88, Spottsylvania). HJ 539 survived a procedural vote to kill it, and then was reported by an 13-8 vote, while HJ 540 passed by a 11-9 vote. 

Finally, this morning, after extensive debate, HJ 615, patroned by Delegate Bill Janis (R-56, Henrico), the House Majority Whip, passed by a 14-7 vote.  This resolution precludes tax and fee increases in the state budget. Any revenue increase, including the termination of tax credits, would have to be introduced as a separate bill for an up or down vote. In recent years, governors and lawmakers have buried such increases within billions of dollars of spending in the budget. Even when promulgated, many lawmakers had no choice but to vote for such budgets or else precipitate a government shutdown.

The proposed constitutional amendments to protect property rights were carried over and will be heard a week from today. Yesterday, there was good news on taxes: The House passed by a 94-5 vote HB 1437, also patroned by Delegate Cole, which would allow localities the option of ending the BPOL tax. This tax, which was started 199 years ago to fund the War of 1812, is a job killer and well passed its own life expectancy. The same day, by a 97-2 vote, the House approved HB 1587, patroned by Delegate Sal Iaquinto (R-84, Virginia Beach), which would exempt start-up businesses from the BPOL tax for two years.

Earlier this week, the House of Delegates passed another Family Foundation priority piece of legislation:  HJ 542, The Repeal Amendment. Patroned by Delegate Jim LeMunyon (R-67, Chantilly), it would repeal any federal law if two-thirds of the states agree. The bill was hotly debated in both committee and on the floor of the House of Delegates, with opponents making subtle and not so subtle accusations of racism toward supporters.

Next week is the final week before "Crossover," and with many bills still left to be debated, almost anything imaginable will happen. Even some unimaginable.

Constitutional Protections At Stake Friday Morning In House P&E

Tomorrow morning, the House Privileges and Elections Committee will consider a number of important constitutional amendments. Please contact committee members at the link above and encourage a vote for all three resolutions. One, HJ 615, patroned by Delegate Bill Janis (R-56, Henrico), will safeguard Virginians' tax dollars by banning tax and fee increases in the budget bill. If those revenues are needed, delegates and senators should have the courage to vote on tax increases separately, up or down, not buried in a must-pass budget with deadline pressure to approve so that state government can continue to function.

Delegate Mark Cole (R-88, Spottsylvania) has two resolutions before the committee. One, HJ 540, will limit the amount state and local government can spend each year to the previous year’s budget, plus the percentage increase in population and inflation. This is a proven way to limit the size and scope of government. His second resolution, HJ 539, would require a super majority vote by the General Assembly and local governing boards to impose a tax increase.

The fourth resolution, and a major priority by several limited government advocates, is HJ 647, patroned by Delegate Rob Bell (R-58, Charlottesville). It passed sub-committee by one vote and its full committee vote was delayed a week. In committee and behind the scenes, local government interests, who use taxpayers' hard-earned money to lobby against their own citizens, and large utilities and telecoms, are throwing every resource they have to defeat this proposal. Afraid of allowing Virginians to vote on the issue of protecting their own property, these special interests think property is private only until such time as they need it for their redevelopment schemes or transportation boondoggles. No less than 10 government and corporate special interests testified against the resolution in sub-committee, with only The Family Foundation, The Farm Bureau and the Virginia Agribusiness Council speaking in favor.

When the U.S. Supreme Court issued its deplorable Kelo decision several years ago (see Examiner.com's Kenneth Schortgen for a new, heinous eminent domain case), it said federal courts could not protect property owners from local and state governments. But it did rule that states could protect their citizens and basically invited states to enact their own protections. Most states did. Why are Virginians still waiting for their legislature to act?

These much needed policies will protect Virginia families’ homes, farms and businesses; enact honest state budgets; and put a limit on out of control taxing and spending. Together, these proposed constitutional amendments form a unique opportunity to reform state and local government, limit its power and focus it on its proper role.

Gala Update: First Huckabee, Now Springsteen!

First we announced the blockbuster news that the keynote speaker at our Annual Gala on Monday, October 26, would be former Arkansas governor and Fox News host Mike Huckabee, whom you can hear in an exclusive interview at 5:30 this afternoon (or on archive, later) by clicking here. (For more information, click here.) Now we have are proud to announce that our musical guest will be none other than Springsteen! No, this isn't a cheap trick, where we will use a projection program to simulate an in-person appearance. This will be the real, live thing!

As those who were born in the USA, a land of hope and dreams, we don’t want our principles to fade away. We believe that better days are ahead for the American land. It’s not a leap of faith to believe that glory days await for those willing to stand up and fight for our principles. We weren’t born to run, we were born to stand! So, we bring you Springsteen! That's Alana Springsteen. The eight-year-old extraordinary talent is going to sing the national anthem to kick off the Gala. Check out this phenom at her Web site, here

Governor Huckabee isn't the only national media figure who speak at the Gala. Bishop Earl Jackson also will join us. Bishop Jackson, former director of the Christian Coalition’s Samaritan Purse, is a nationally recognized pro-family leader who appears regularly on national television. Joining him in the program are Speaker of the House of Delegates Bill Howell (R-28, Fredericksburg) and Delegate Mark Cole (R-88, Fredericksburg), who will make a special presentation.

More than 1,100 seats now are reserved and space is running short, so if you haven’t reserved your seat please do so today as we may reach capacity soon! We have contracted with the Richmond Marriott, directly across the street from the Gala's venue, the Greater Richmond Convention Center, for a block of rooms for Gala guests. To make reservations for the significantly discounted group rate, please contact the Marriott at 1-800-228-9290 and mention The Family Foundation Gala. For questions, or to register by phone, please call The Family Foundation at 1-804-343-0010, or e-mail dan@familyfoundation.org for more details.

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Quote Of The Day

From one of our favorite senators, Janet Howell (D-32, Reston), who previously graced the QOD when she admitted she didn't have to read a bill to vote on it, comes this gem today, while chairing the Privileges and Elections Committee: When presenting a bill, Delegate Mark Cole (R-88, Spottsylvania) admitted it had a fiscal impact of around $75,000. But, he said, "it's already in the House budget."

Senator Howell, in the leadership of the Senate's  majority party and member of the Finance Committee, asked:

"Is it in the Senate budget?"

Umm, senator, the Senate famously and deliberately refused to pass a budget by its deadline last week (see Washington Examiner, here). Let's see. Senator Howell doesn't read the bills upon which she votes and doesn't pay attention in Finance Committee. Yes, we're in good hands.

 

Special Tax Session Fast Approaching

Just four years ago, Virginians were asked to pay for a massive tax increase, the brainchild of former Governor and current Democrat U.S. Senate candidate Mark Warner and former Virginia Senator and lifelong RINO John Chichester. (Visit tomorrow for the untold background on this, the largest tax increase in Virginia history.) As a result, billions more dollars from working families in Virginia have poured into the coffers in Richmond. In the three state budgets since, state government has spent nearly $100 billion of your money. The result? They're back for more. Regardless of Governor Tim Kaine's (contact him here) rhetoric about working families in Virginia expecting a "free lunch" for not wanting to send more of their hard earned money to Richmond, the fact remains that there is plenty of revenue in Richmond to pay for core government services. 

But for the politicians, there just isn't enough money to pay for those services and everything else they want. There never will be enough for their voracious spending appetites, all while Virginia taxpayers get nothing close to a free lunch — and it is incredibly arrogant for the governor to suggest that we are.

This Monday, June 23, the General Assembly will meet at the capitol for what we've dubbed the "Special Tax Session" because, despite the rhetoric about a "transportation crisis," there are no guarantees that revenue from any new taxes will go solely to transportation. Any new tax money will go into the general fund and be spent any way Virginia's political elite wants it to be spent. It's telling that one of the biggest supporters of the tax increase is the Virginia Education Association. Exactly what interest should the teachers union have in a tax increase for "transportation"? Their excitement clearly indicates they've been given a free run through the pork trough if the tax increase passes.

The lack of a guarantee that transportation will become a priority is just one of the many reasons that the General Assembly should reject the call for tax hikes. See our interview with Delegate Mark Cole (R-88, Fredericksburg) and his response about the raid on the Transportation Trust Fund. The fact that transportation spending makes up just 13 percent of the budget, while education makes up 40 percent and social services 30 percent, indicates that transportation never really has been the priority it should. To complain about a "crisis" now is disingenuous. If there is a crisis, it's a crisis in leadership, not of citizenship. What leader, beside Jimmy Carter, criticizes his constituents?

But most importantly, to ask Virginia's working families to pay even more in taxes when they are facing extraordinary and ever-rising gas and food prices, a collapsed housing market, job insecurity and a sluggish economy, is the unrestrained arrogance of elitism, of someone out of touch with, perhaps, "bitter" people. Your elected officials — especially your delegate and senator — must not feel this lack of restraint the governor apparently feels. Send a clear message to your representatives that you oppose higher taxes and fees.

Remember: The politicians will raise your taxes if they think you don't care, because they can sell it to you as something necessary, as in transportation, then spend it any way they choose. So you must let them know you are paying attention. Click here and send an e-mail to your delegate and senator and urge them to oppose higher taxes. Then forward this link to your friends and family so they can make their voices heard as well.