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McDonnell Beats Back The Tax Hike

By Greg L | 17 December 2008 | Virginia Politics | 17 Comments

Governor Kaine is predictably calling for tax increases to help address a biennial budget shortfall, along with spending cuts.  Increasing the burden of government on the citizens during uncertain economic times when many of us have less is utterly ridiculous.  Given the choice between forking over an increasing amount of our declining incomes, or telling our government that they have to do with less just as we are, Virginians should be outraged at the notion that it’s time for us to pony up more.  Attorney General Bob McDonnell makes no bones about his distaste for this foolishness, albeit in more diplomatic language than I am inspired to use.

“We face a very difficult economic climate. The stock and real estate markets have contracted, and most businesses are not making new investments. The unemployment rate is rising, and people are hurting. Most citizens of Virginia have been affected. The budget of the Commonwealth has not escaped this downturn. The Commonwealth faces a shortfall of at least $3 billion. This significant deficit requires immediate action. The Governor has outlined a series of proposals. Some are sound and I will support them. Others I do not support.”

“Spending in Richmond has increased significantly. The budget has doubled over the past ten years. With this downturn in the economy comes the opportunity to look for efficiencies in government, and find the best ways to deliver quality government services at a reduced cost to taxpayers. We did this in The Office of the Attorney General. We cut our budget by nearly 15% over the past year. While we are only one small part of the overall government, this does show that spending can be reduced, without hurting the quality of our services.”

“The Governor has called for some significant reductions in spending. This is the proper course of action to address this shortfall, and I applaud this work. I am disappointed however that the Governor has called for a tax increase. You should not raise taxes in a recession, and you cannot tax your way to prosperity. Another huge increase in the cigarette tax would potentially threaten a Virginia industry at a perilous time, while increasing the tax burden on many Virginia citizens and small businesses when they can least afford it.”

“We must work together to guide the Commonwealth through this financial downturn in a responsible manner. By taking the right steps today we can position Virginia to rebound in the economic recovery that will come. This is the time to look at more innovation, prioritization and consolidation to save money. This is the time to revisit every function of government and ask hard questions. Find what works and keep it. Identify what does not and cut it. I urge the Governor and the General Assembly to work together to solve our budgetary deficit in a responsible, and taxpayer friendly, manner.”

No word on whether Governor Kaine is willing to forgo spending money on publicly-funded pre-K (read public day care) or any of the other “initiatives” he thought were so crucial for Virginians to spend their money on last budget cycle.  I’ve little doubt however that the House of Delegates at least will impose some fiscal sanity on our profligate Governor and perhaps our government won’t use this latest crisis as an opportunity to take even more of our hard-earned money away from us, just when we need it the most.

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  1. Greg L said on 18 Dec 2008 at 12:07 am:
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    Bill Bolling has also released a statement on this. In part, it reads:

    “I am very concerned by the Governor’s proposal to increase taxes by $167M. Throughout this process the Governor has repeatedly promised to balance the budget through spending cuts, not tax increases; and it is very disappointing to see him renege on this promise. The people of Virginia expect their leaders to keep their word, not break their promises.

    “I am also concerned that the Governor’s tax increases could have a devastating impact on tobacco industry jobs in Southside and the Richmond area. Given the overall economic slow down, these businesses are already suffering enough, and now is not the time to place additional tax burdens on their shoulders.

    “I also continue to be concerned that the Governor is basing the budget on overly optimistic revenue projections in the 2009/2010 fiscal year. At a time when the economy is struggling and state tax collections are declining, the Governor continues to estimate that we will see economic growth of 4% in the upcoming fiscal year. If we fail to meet these revenue projections, we could face additional budget shortfalls next year. A more prudent course would be to assume little or no revenue growth in the upcoming fiscal year and adjust state spending accordingly.

    “To prevent these dramatic shortfalls, provide more accurate revenue projections and solve these problems in the future, we need to pursue real budget reform and increased transparency in the budget process. I look forward to working with the Governor and the members of the General Assembly to address these concerns, restore fiscal integrity to the budgeting process in Richmond and adopt budget amendments that put our state back on a sound fiscal foundation.”

  2. AndyH said on 18 Dec 2008 at 8:00 am:
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    I like that Bolling actually points out a specific thing instead of just hand waving. He’s right about the revenue projections btw.

    One other thing to remember when talking about the state budget - about half of state revenues are distributed back to localities. A lot (I would guess 70%) of that money goes directly to school, police and infrastructure (paving, etc).

    Not a comment or a criticism, just a data point.

  3. Ted said on 18 Dec 2008 at 9:05 am:
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    I always find it amazing that whenever the subject of budget cuts of as little as 2-3% comes up we are told that we must be prepared for reductions in services. Not just nice to have services, but services such as police, fire, and education.

    Someone explain to me how a 2-3% budget cut in any particular department can result in the reduction of government services. If an administrator can’t do his job with 97% of his budget he should either be fired or the department should be abolished because it is obvious the money is being wasted on what is nothing more than a government jobs program.

    In the late 70s when I was in the Army we made do with some pretty severe budget restraints. It wasn’t pretty and it hurt, but we did what we had to do and were still able to get the job done.

    All levels of government need to be able to do the same and should be constantly reminded that it is OUR money they are spending, not theirs.

  4. Anonymous said on 18 Dec 2008 at 12:16 pm:
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    Obamarama said he wanted change.
    Between him and Kaine, that is all we will have left in our pockets.

  5. Johnson said on 18 Dec 2008 at 1:24 pm:
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    How much would we save if we kicked the illegal aliens out of state?

  6. anonymous said on 18 Dec 2008 at 1:25 pm:
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    “he should either be fired”

    The usual method of disciplining government workers is suspension with pay.

  7. Johnson said on 18 Dec 2008 at 1:41 pm:
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    I like the “suspension with pay” option. We called it “days on the beach”.

  8. citizenofmanassas said on 18 Dec 2008 at 2:05 pm:
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    How much more of a shortage would the Commonwealth have if timmy’s brain washing k for everyone program was implemented? Now timmy wants to cut services, after calling for a major increase in spending last year and the year before.

    As for tax increases, given that we have more liberals living here, more taxes may not be so unpopular as thought. Just look at what the State of NY is proposing to tax, and you can see why timmy does not mind tax increases.

  9. Pat.Herve said on 18 Dec 2008 at 4:32 pm:
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    raising the taxes on cig’s - should have been done years ago.

    I would support the loss of jobs due to sales tax increased on cig’s - does anyone realize how much money we spend on healthcare related to cig’s? and while they are at it, they should ban smoking in restaurants.

  10. CONVA said on 18 Dec 2008 at 9:00 pm:
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    RE Pat.Herve: Then they will tax the sugar content in food, then the fat content in food, then, then, then. It never stops with socialists until they have control of all the money so they can distribute a little to the kennel kept denizens and keep the remainder for themselves. Best not endorse ANY TAX INCREASE, and demand the government live within their means just as most Americans do.

  11. Harry said on 19 Dec 2008 at 8:02 am:
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    Is this the tax increase of $0.30 on a pack of gigs? As you are aware the state medicaid bill for smoking caused illnesses is $400 million, so consistent with Republicans belief in user fees the gig tax shold go to about $1.20/pack, don’t you agree?

  12. citizenofmanassas said on 19 Dec 2008 at 9:09 am:
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    Do you recall under Clinton the luxury tax that was passed by Congress? They wanted to tax luxury “big ticket” items such as large boats, etc. What happened? People stopped buying those larger boats. So, while taxes may be needed, there comes a tipping point where people will stop buying as much if the price gets too high for them. And, that does not help the economy or tax revenues.

  13. Pat.Herve said on 19 Dec 2008 at 11:05 am:
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    by that logic, we should be giving cig’s away for free. Yes, tobacco and it other products are a big industry, but it DOES harm people, we know it, they know it, yet, we still market it to people. If increased cig taxes reduces use, I am all for it - knowing that it will lead to some job loss - hopefully job loss in the healthcare arena due to less need due to cigs.

  14. citizenofmanassas said on 19 Dec 2008 at 2:18 pm:
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    No, they should not be free. The tax and spend folks think they can just keep raising taxes and come up with all sorts of revenue forecasts based on those taxes, and that just is not always the case. So, before the Commonwealth starts to plan future revenues based on a tax, they need to be careful they do not overstate the value of the tax increase.

  15. monticup said on 19 Dec 2008 at 10:57 pm:
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    Sorry, Herve. When people stop smoking they live longer. This means more people growing old and needing medical services. Most of the medical dollar is spent on the elderly. So to save money, more people should smoke.

  16. CONVA said on 24 Dec 2008 at 5:33 pm:
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    The “BRAIN SURGEONS” in Richmond should learn to prioitize. Education, safety and infrastructure in that order. If that eats up all the revenue then so be it. If there is any left over, put it in the rainy day fund and make it impossiblr for the socialists to spend it on anything other than the three above. Make it known to the kennel kept denizens that the party is over.

  17. Harry said on 31 Dec 2008 at 2:16 pm:
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    CONVA, education, safety and infrastructure makes up 91% of the state general fund budget.

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