sales tax

Notice Those Gas Prices?

If you've filled up at the pump recently, you've noticed that it's costing a lot more. In fact, according to AAA, gas prices have risen 31 consecutive days. Unfortunately, if some members of the General Assembly have their way, the impact on your family is only just beginning. As we enter the final week of the 2013 session, the topic of funding transportation dominates. Currently, ten members of the legislature, five from each chamber, are meeting to work out a plan based on legislation introduced on behalf of Governor Bob McDonnell and several other proposals. If they can come to an agreement, the plan they concoct could be voted on very quickly, with little time for legislators or citizens to look at the details.

Some members of both parties want to hike the gas tax, either directly or through "indexing" it to inflation. The governor's proposal would eliminate the gas tax but replace the revenue with an increase in the sales tax. Other elements being discussed include giving local governments the authority to "raise revenue," i.e. raise your taxes, without having to do it through referenda. The price tag on the competing plans comes in somewhere between $800 and $900 million per year in increased funding for transportation, the majority of which comes from increased revenue.

While there is little doubt that transportation is an issue that needs addressing, we urge the General Assembly to keep in mind the devastating effect increased gas prices have had on Virginia's families and small businesses. Increasing that burden even more during a time where some are predicting $5 a gallon gas prices by the end of the year could have a disastrous effect on Virginians. We recognize that there are serious needs in the area of transportation and are hopeful a plan can be agreed to, but it cannot unduly increase the financial burden on our struggling families.

Please contact your Senator (here) and your Delegate (here) and urge them to not increase your taxes in the transportation plan!

A Positive Proposal On Transportation

Much of the discussion and attention of this year's legislative session thus far has been surrounding how to fund transportation. Governor Bob McDonnell initiated the discussion with a bold plan to be the first state in the nation to eliminate the archaic gas tax and replace that revenue with numerous other tax and fee changes. Yesterday, Senator Steve Newman (R-23, Forest) introduced a plan that would replace the gas tax with a sales tax of 5.5 percent on gas, but keep the state sales tax at 5 percent. This proposal is a very positive development in the debate surrounding how to fund transportation.

To this point, we have been monitoring the various proposals and debates in committee, knowing that the initial offers from Governor McDonnell and others would not be the final package. Unfortunately, liberals in Richmond have their own plans — and they include massive tax hikes in the billions of dollars that would cripple our economy and rip money from our families, already paying at least $3.60 a gallon for gas in some parts of the state, during some of the most challenging economic times we've ever faced.

Senator Newman's plan offers legislators an opportunity to address the needs of transportation — and there are needs — without increasing the tax burden on Virginia families. There is no doubt that the General Assembly has an opportunity this year to address an issue that has been challenging our elected officials for years. Senator Newman's plan is the best proposal we've seen at this point.

The House and Senate will vote on various plans, have more committee meetings, amendments, floor surprises and, ultimately, conference committee process that will change its content faster than the twists in an Albermarle County back road. So no one knows exactly what the outcome will be until the final days of session. We do know that we will oppose any plan that taxes Virginia families' hard earned income and that Senator Newman's plan has provided a new, improved platform from which to continue the discussion.

High Water Mark

This afternoon has been the high water mark thus far for the Special Tax Session of the General Assembly. Moments ago, Senate Majority Leader Dick Saslaw's 35 percent increase in the gas tax passed the Senate on a party-line vote of 21-16 (interestingly, two Tidewater Senators, Blevins and Quayle are absent today . . . hmmm). The bill now goes to the House where . . . for two hours this afternoon the House Rules committee drilled the state's transportation secretary and Minority Leader Delegate Ward Armstrong (D-10, Martinsville) on the Governor's tax hike bill. Republican Delegates Cox, Hogan, Landes, Griffith, and Speaker Howell, really led the charge. The most interesting moments were when Armstrong and the Governor's representative argued that "raising taxes won't affect people's actions" and that they don't believe higher taxes on new cars will reduce car sales or a higher tax on selling a house will make it harder to sell a house. Except when it comes to the gas tax, where Armstrong argued that a higher tax will hurt sales. Republicans were incredulous. 

No vote was taken, delayed by the Speaker until "after the Senate does something." Word is that the entire House of Delegates will get the opportunity to vote on the Governor's package, and on the statewide hike in the gas tax. Neither will be killed in committee. Republicans want Delegate Brian Moran (D-46, Alexandria), candidate for Governor, and others on record. 

There are also rumors that the General Assembly will be back for at least a day or two next week.

If nothing else, this week has proven to be great political theater. No one believes any policy of substance will materialize, but the debates have been great and the competing strategies interesting to see evolve. Only time will tell which strategy will prevail.

Floor Fireworks

The General Assembly convened today for its special "tax session," and the rhetorical fireworks started flying right away. After Governor Tim Kaine urged passage of his $1 billion tax hike while he addressed a joint session of the House and Senate, members of the House Republican caucus went on the attack. Delegate Kirk Cox, the majority whip, (R-66, Colonial Heights) ridiculed the governor's defense of the Virginia Department of Transportation. Delegate Bill Janis (R-56, Henrico) criticized the governor for ignoring the financial difficulties of "average Virginians" while asking for higher taxes. He also kept up his attack on Kaine for being "absent" during this process, saying he is more interested in "campaigning for the Vice Presidency." 

House Majority Leader Morgan Griffith (R-8, Salem) ripped the Governor for failing to provide any leadership and bringing the GA back without having gotten consensus on a plan. Griffith was particularly critical of the governor's inability to find a Senate patron for his transportation bill (at least as of the beginning of today's session). "Normally we come to special sessions to close the deal, not start the debate," Griffith said.

Democrats supporting the tax hikes accused opponents of being "closed minded."

Consensus around the capitol is that no legislation will pass this week. Most believe that Kaine called the special session knowing the legislature would fail to pass his tax hike so he can use it as a campaign issue next year. That said, the debate should be interesting — and the rhetorical battle is probably just getting started.

Poll: What Do You Think Should Happen At The Special Tax Session?

We all know what the governor and many legislators want to happen at The Special Tax Session starting June 23. But what do you think should happen? Then, after you vote, post your solutions, ideas and comments on this thread. Who knows? Maybe somebody in the General Assembly will like what you think. Remember our lottery idea? If you are creative enough, anything is possible. Voting ends June 25.

Truth In Reporting: The Special Tax Session

Governor Tim Kaine surprised absolutely no one when he rolled out his transportation — er, make that tax — plan Monday. It includes nearly $1 billion tax and fee increases under the guise of fixing transportation for what he and the media mistakenly call a transportation special session of the General Assembly to begin June 23. Truth in reporting requires us to call it a Special Tax Session. Governor Kaine's plan doesn' leave out much. It increases the sales tax in Hampton Roads and Northern Virginia from 5 to 6 percent, something rejected by voters in those regions in 2002. Governor Kaine also would have us pay more for cars by increasing from 3 to 4 percent the motor-vehicle titling tax as well as another $10 increase in the cost to register our vehicles. Governor Kaine doesn't stop there: He also proposes an increase in the grantor's, or property seller's tax, of 10 cents per $100, just as the real estate market is tanking. Detect a theme here?

How anyone can fathom adding a tax to house sales right now, on top of the fee for mortgage and refinance originations as part of former Democrat Governor Mark Warner's 2004 record tax increase? (By the way, does he like his successor's plan?) What does this show of Governor Kaine's understanding of basic economics? Why do he and other liberals complain about getting branded as big taxers and spenders when they thoughtlessly and reflexively propose more tax increases for every problem (real or imagined)? The fact that spending cuts and prioritizing never seriously are considered shows a true lack of imagination, leadership and courage.

There are at least two reasons why we do not support increasing taxes for "fixing transportation." One is the lack of a constitutional amendment to protect Virginia's Transportation Trust Fund from being raided. The other is the depression era law that controls how Virginia funds its transportation needs. Until those two issues are resolved, Virginians should not be asked to send more money to Richmond to fund a broken system.

It is a misnomer that conservatives are anti-tax. We're anti-tax increases when taxpayer money is wasted on useless programs that often are counterproductive, when taxpayer money is not used for constitutional purposes, when politicians want to start new programs (especially during a shaky economy) to buy their "legacy" (pre-K, anyone?), and when government is so big and bloated that waste and abuse are rampant. When spending is cut in real terms and re-prioritized, and only constitutional functions of government are funded, then let's talk about taxes.