Virginia Will Enter Next Session with Money Surplus

by Tyler Arnold

 

Virginia lawmakers will enter their next regular session in January as the state continues to record budget surpluses.

The commonwealth finished the last fiscal year with a surplus of nearly $2 billion and the state revenue collections continue to exceed expectations. Some economists are warning against using the excess money to increase spending during the legislative session.

“Virginia shouldn’t be looking to spend its budget surplus,” Adrian Moore, an economist and vice president at free-market Reason Foundation, told The Center Square. “With today’s economic uncertainty and the state’s public pension and other debts, Virginia should either put the surplus into a rainy day fund, pay down some of its unfunded pension liabilities, or even consider modest tax refunds to taxpayers struggling with inflation.”

Chris Edwards, an economist at the free-market Cato Institute, told The Center Square the state should look toward cutting taxes with the surplus money. He noted most states with a Republican governor have used surpluses to cut individual or corporate income tax rates.

“Virginia needs to get on board the tax reform express and pursue income tax rate cuts,” Edwards said.

Edwards suggested the governor should consider reforms to the Business Tangible Personal Property tax and the Business, Professional and Occupational License tax. The former collects revenue through taxes on business machinery and equipment, which he said discourages investments. The latter is a hidden tax, which he said undermines investments and hurts workers.

“Youngkin should cut these taxes to draw investment and jobs to Virginia,” Edwards added.

When the commonwealth recorded its large surplus to end the last fiscal year, the governor indicated it was a sign Virginians paid too much money in taxes. Last month, he reiterated his intent to cut taxes, but added that the state must be cautious because the country may be headed into a recession.

– – –

Tyler Arnold reports on Virginia and West Virginia for The Center Square.
Photo “Glenn Youngkin” by Glenn Youngkin. Background Photo “Virginia State Capitol” by Martin Kraft. CC BY-SA 3.0.

 

 

Related posts

3 Thoughts to “Virginia Will Enter Next Session with Money Surplus”

  1. RedCar

    The tax surplus can help to do roads without more toll roads. Road improvement should be done without more toll roads which disproportionally work against the lower income parts of the economy, the people most dependent on decent roads.

    The federal government will continue to borrow and spend to the point where it will inevitably have to shift some of the burden to the states. Virginia is well positioned to get ahead of the curve so the infrastructure issues will not overcome us when the inevitable happens.

  2. RedCar

    I would like my taxes cut as much as anyone; however, the prospect of a recession still looms and I believe it will come on fairly rapidly without enough time to react. Therefore, I believe a certain amount of circumspection is needed. There are several things that could be done with the money without a tax cut – notable among them the roads. Since there is supposedly also a bucket of federal “infrastructure” money out there it might be time to really do something about I-81 and I-64 east of Richmond as well as a third north-south avenue to bypass the Washington, D.C. area. Another infrastructure item, one which should fit into the climate change ideology narrative is that of the electrical transmission infrastructure. Regardless of your views on climate change, the transmission infrastructure is badly in need of upgrade. Every weather event, no matter how big or small, causes power outages and each of them causes misery (especially among the lower income and rural populations) and lots of money (same folks, but also across the general economy). That won’t get better if climate change ideology continues to hold sway. Either way it needs doing and a tax surplus is a a lever to get it done.

  3. Pat

    How about lets fulfill a promise made 25/30 years ago and get rid of the personnel property tax on vehicles???

Comments