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Morning Poll: Tax cuts or funding boosts?

Virginia Capitol in Richmond (staff photo)

Good news: Virginia is flush with cash.

State tax revenues have been unexpectedly robust — billions more than first anticipated — and that has Republicans and Democrats in Richmond at loggerheads over what to do with the money.

From the Virginia Mercury last month:

Virginia’s new governor marked his 30th day in office with a state tour meant to build support for his tax-cutting plans, which have gotten a mixed response in the politically split legislature.

Parts of it, such as a plan to give every Virginia taxpayer a one-time rebate of $300, have passed with strong bipartisan support. Other proposals, like eliminating the state’s grocery tax and suspending a scheduled increase in the gas tax, have been a tough sell in the Democratic-controlled Senate.

The budget remains in flux, with the state legislature adjourned until a special session is called, allowing lawmakers to work out their differences. While Republicans are calling for nearly $5.5 billion in tax cuts and rebates — plus, more recently, a temporary gas tax holiday — Democrats want more modest tax cuts, targeted to those with lower incomes, while boosting funding for priorities like education.

From the Richmond Times-Dispatch:

The House budget includes almost $5.5 billion in tax cuts and rebates, but the Senate continues to insist on deferring the centerpiece of the governor’s tax plan — the doubling of the standard deduction for income tax filers — until a joint subcommittee completes a comprehensive study of Virginia tax policy in the coming year. Doubling the standard deduction would reduce state revenues by $2 billion over two years.

The Senate has agreed to partial repeal of the 2.5% sales tax on groceries, but has balked at eliminating the 1% that goes directly to local governments and has approved a less generous tax exemption for military retirement income than the House. It also has approved smaller tax rebates this year than the House and rejected a 12-month rollback in the gas tax as meaningless to soaring prices at the pump.

In general, what do you think the state should do with its unexpected extra revenue, if you were to select one thing as Richmond’s top budget priority?

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