Paul Blair

New Jersey Democrats Propose Massive $1.6 Billion in Annual Tax Hikes

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Posted by Paul Blair on Wednesday, June 18th, 2014, 4:52 PM PERMALINK


Democrat Senate President Stephen Sweeny (D-Glaucester) along with Senator Loretta Weinberg (D-Teaneck) and other New Jersey Senate Democrats just announced an income tax and business tax hike to address the state's $807 million budget deficit. Initial estimates suggest the plan will raise $1.6 billion in revenue, which would fund next year's pension payment. It wouldn't go to transportation, education, or public safety. 

The proposal raises taxes on those earning more than $500,000 and adds a 15 percent business tax surcharge. These massive tax hikes were announced on the same day that one of New Jersey's public employee pensions voted to sue over Governor Chris Christie's plan to defer a $900 million pension payment. 

Governor Christie has repeatedly called for additional reforms to deal with the ballooning costs of public employee pension, health benefits, and debt service that are engulfing the budget. In fact, 94 percent of the year-over-year growth from the current budget to the Governor's proposed budget for next year is going to the growth in these things, not education, transportation, or anything else. New Jersey Democrats clearly don't understand that curbing spending with legitimate long-term reforms is the only real solution to a $54 billion underfunded pension crisis. 

New Jersey is the next-to-last worst place in the nation to do business. According to the Tax Foundation, it has the highest property taxes in the nation, 9th highest corporate tax, 6th highest income tax, and 4th highest sales tax. The Democrat plan would raise the top income tax rate from 8.97% to 10.75%. Individuals making between $500,000-$1 million would pay 10.25%, up from 8.97%. Only two states impose higher state income taxes: Hawaii at 11% and California at 13.3%. 

Clearly Democrats have no interest in promoting economic growth. Instead of reforming the public pensions, they would rather run even more businesses and taxpayers out of the state. Between 1992-2011, New Jersey lost $22.3 billion in annual adjusted gross income to states like Florida, which does not tax income. It also lost more than 429,000 residents. The Democrat plan flies in the face of what neighboring New York (where the governor is a Democrat) was able to accomplish this year: tax cuts. Next year, New York is even poised to move ahead of New Jersey, passing along to them the dead last ranking for a business competitiveness climate. 

Governor Chris Christie is the only thing standing in the way of the Democrat plan to turn New Jersey into Detroit. He recently said, "I won't raise taxes on the people of New Jersey to pay for a Cadillac pension system." His proposal would pay $696 million in pension payments out of a scheduled $1.6 billion, and another $681 million next year. 

Republicans have an alternative to the Democrat tax hike, which can be read here. It eliminates the proposed tax hikes and prioritizes state spending. Democrats better come up with something else or they may forever seal their fate as clueless in the fight to stop taxpayers and their businesses from fleeing to more friendly states. 

Photo Credit: 
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ATR Opposes New Vapor Tax in North Carolina

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Posted by Paul Blair on Friday, May 23rd, 2014, 4:24 PM PERMALINK


As the summer session of the North Carolina legislature heats up, an omnibus tax bill is up for consideration that makes a few tax adjustments in the year following the historic tax reform package signed into law by Governor Pat McCrory

The House recently passed H.B. 1050,which among other things includes a 5-cent per milliliter tax increase on e-cigarettes and vapor products, which contain liquid nicotine. The companion bill is S.B. 763 and both bills await consideration in the Senate. 

Vapor products and e-cigarettes are already taxed at a sales tax rate of between 4.75 and 8.25 percent. Imposing an additional tax on these products will hurt North Carolina vapor companies and small businesses struggling to make ends meet. This is especially true of convenience stores, which have begun to rely on these products more heavily to replace revenue lost from declining sales with tobacco products.

While the overall bill may be revenue neutral, imposing additional taxes on these innovative products will chase business out of the state and onto the Internet, which is already a significant market for e-cigarette and vapor products.

Taking aim at e-cigarettes also works at cross-purposes with efforts to cut down on the harm associated with smoking. A number of studies have shown that electronic cigarettes stand to improve health and prevent disease. By choosing to “vape” e-cigarettes instead of smoking traditional tobacco, consumers get their nicotine fix without the combustion and smoke, which are responsible for many of the negative health effects of tobacco cigarettes.

A new study funded by the charity Cancer Research UK published in the journal Addiction found that smokers trying to quit are 60 percent more likely to report success with e-cigarettes than with any other method. With e-cigarettes, the free market has provided a solution to a problem that social engineers have not been able to address through stiff government regulations. ​

Last year, the legislature passed the most significant tax reform package of any state in years. It brought tax relief to millions while reversing decades of taxes going in one direction: up. Though these two companion bills are not violations of the Taxpayer Protection Pledge, they do take a step in the wrong direction.

Other states, including Washington, Oregon, Hawaii, Massachusetts, and Vermont have all rejected efforts this year to raise taxes on e-cigarettes and vapor products. That’s because of the harmful impact on small businesses and concerns about public health. For these reasons, the vapor tax portions of HB 1050 and SB 763 should be stripped from the bills and considered individually, so that all sides can have an opportunity to debate the merits of the proposal.

Click here to read the full letter from ATR president Grover Norquist

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Governor John Kasich's Tax Shifting Scheme

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Posted by Paul Blair on Wednesday, May 21st, 2014, 4:52 PM PERMALINK


Now that Ohio primary season is over, legislators are free to begin work on the hot button issue of the 2014 legislative session: tax reform. Governor John Kasich's proposal defies the basic tenants of conservative tax reform. It redistributes the tax burden on the backs of low-income Ohioans while taking aim at the energy industry, which is creating thousands of jobs in eastern Ohio. 

The governor's proposal certainly starts off on the right foot. By further reducing the income tax by 8.5 percent and raising the personal exemption, taxpayers would get to keep more than $2.6 billion of their hard-earned income over the next three years. Unfortunately, Kasich's complete proposal engages in tax shifting that raises taxes on tobacco, energy, and small businesses.

As if President Obama's war on energy producers wasn't enough, Governor Kasich's first tax increase targets Ohio oil and gas with higher frack taxes. The industry supports thousands of jobs in Ohio, both directly and indirectly. The shale energy revolution will generate billions of dollars in economic activity, thousands more jobs, and in turn more income tax and sales tax revenue for the state without higher tax rates.

To suggest as OSU professor Mark Partridge did that a $847 million tax hike would be "inconsequential" defies common sense and logic. The governor's proposed severance tax would absolutely discourage investment in this sector of the economy.

Gov. Kasich also goes after low-income consumers with a proposed 60-cent increase in the cigarette tax. As a percentage of income, low-income individuals spend seven times more on cigarettes than wealthy ones. That¹s why tobacco taxes are extremely regressive, disproportionately burdening the poorest individuals the most. 

Even more, raising cigarette taxes does not necessarily mean more revenue for the state. In May of 2012 when Illinois raised the cigarette tax by $1-per-pack, the tax delivered $138 million less than expected. Before that, of the 57 tobacco tax increases enacted by states between 2003 and 2008, only 16 met initial revenue projections.

There's also a negative impact on small businesses. They often lose tens of thousands of dollars as a direct result as consumers purchasing tobacco across state lines. Convenience stores, for example, rely on cigarettes and other tobacco products for more than 40 percent of all store revenue. To avoid higher tobacco taxes, consumers have constantly demonstrated that they are willing to purchase the products in less expensive markets.

Anti-smoking activists and public health advocates should be concerned about the next target of Gov. Kasich's tax hikes: e-cigarettes and vapor products. His proposal would raise taxes by more than 700 percent on these products. This would cripple brick and mortar vapor shops and do irreparable damage to small businesses struggling to make ends meet.

Taking aim at e-cigarettes with higher taxes works against efforts to reduce the harm associated with smoking. A number of studies have shown that electronic cigarettes can improve health and prevent disease. By choosing to "vape" e-cigarettes, consumers get their nicotine fix without the combustion and smoke, which are responsible for many of the negative health effects of tobacco cigarettes.

Higher taxes on innovative products that reduce smoking and people¹s dependence on tobacco are misguided and will impede proven harm reduction methods. That is probably why bills to raise taxes on these products have stalled in the legislature.

Between 1992-2011, Ohio lost more than 390,000 people and $19.6 billion in annual adjusted gross income to business and tax friendly states like Florida, Tennessee, and Texas, all states that do not tax income. That's why lowering and eventually eliminating the income tax is a goal that governors and legislatures nationwide should work towards. There are, however, ways to accomplish this without needlessly targeting innovative products and industries with higher taxes, especially when higher taxes on those things may not generate more revenue for state coffers.

There are a number of states getting tax reform right, North Carolina and Kansas most recently. Governor Kasich's proposal does not simplify the tax code - the jungle of Ohio¹s chaotic municipal income tax system remains intact - it instead engages in little more than tax shifting. 

Tax reform in Ohio should include a reduction of the number of income tax brackets - there are currently nine - and address the out of control and burdensome municipal income tax regime. It absolutely should not pick winners and losers. Pro-growth tax reform takes a willingness to make tough choices, which Governor Kasich's proposals fail to do.

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ATR Opposes 75 Percent Tax On E-Cigarettes in New Jersey

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Posted by Paul Blair on Wednesday, May 21st, 2014, 6:00 AM PERMALINK


The New Jersey state Senate Health, Human Services, and Senior Citizens Committee recently passed a bill imposing a massive 75 percent tax on e-cigarettes sold in the state. The bill mirrors a proposal put forth by Governor Christie earlier this year, which we wrote about here. ATR opposes Senate Bill 1867 and all efforts to raise taxes in New Jersey. 

At the end of April, state officials announced that the New Jersey budget shortfall grew to $807 million. Though that staggering number can be directly attributed to the higher taxes that took effect with last year's fiscal cliff deal, New Jersey's primary driver of long term budgetary issues is its addiction to overspending. This can only be addressed with reforms that deal with the costs of public employee pensions, health benefits, and debt service costs which comprise more than 94 percent of year-over-year budget growth. The state's pension system alone is $54 billion underfunded - an issue Governor Christie has called for additional reforms to address.

Raising taxes is a harmful distraction from these issues. Tax hikes on innovative products, like e-cigarettes, that save lives is a step in the wrong direction. This bill will chase business and revenue out of the state and onto the Internet, which is already a significant market for e-cigarette and vapor products. Small businesses, like convenience stores, stand to lose tens of thousands of dollars, which is particularly troubling in a time of tepid economic growth.

We urge the Senate Budget Committee to reject this bill and begin to face the facts on the pension, health benefits, and debt service cost crisis. Tax hikes won't make these issues go away. 

Our letter to the Senate Finance Committee can be read here. 

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Nevada State Senate Candidate Becky Harris Supports Higher Taxes


Posted by Paul Blair on Monday, May 12th, 2014, 3:01 PM PERMALINK


In her bid to secure the Republican nomination for Nevada's 9th state Senate district, Becky Harris refuses to take higher taxes off the table by signing the Taxpayer Protection Pledge. At a public forum, Nevada voters asked her to explain her position and her answers were telling... 

Question: "Economics and taxes are very important to me. Have you signed the No Tax Pledge and if not, why?"

Becky Harris: "That's a great question! I have not signed the No Tax Pledge and I'm not going to sign the No Tax Pledge because I'm interested in looking at comprehensive tax reform." 

First off, the Taxpayer Protection Pledge does not require opposition to revenue neutral tax reform; any tax increase must simply be tied to an offsetting tax cut of at least equal size. That information is available publicly here and is sent with a copy of the Pledge to every candidate for state and federal office. FactCheck.org has debunked this myth, summarizing that the pledge "explicitly allows elimination of any specific tax deduction or credit if matched dollar-for-dollar by an overall cut in rates." 

But Becky didn't stop there. 

Becky Harris: "I think it's a little disingenuous to sign a No New Tax Pledge… signing the Pledge kind of limits maneuverability and ability to look at a variety of different options that might be on the table."

For someone who takes pride in being a small business owner, this is concerning. Clearly Becky knows exactly what her plans are if she wins: raise the overall tax burden on hardworking Nevada taxpayers and small businesses. The only thing disingenuous in this race is Becky Harris's claim that the Pledge gets in the way of tax reform. The reality is that it gets in the way of her plan to grow government and raise taxes. 

That's precisely why nearly every US House and Senate Republican has signed the Taxpayer Protection Pledge, including Budget Committee Chairman Paul Ryan and House Ways and Means Committee Chairman Dave Camp, two of the most powerful budget and tax-writing Republicans in Washington. Senator Dean Heller, Representative Mark Amodei, and Representative Joe Heck are also signers of the federal Pledge. The only people who use the "Pledge gets in the way of tax reform" line are people who admittedly want to raise taxes. 

The Pledge doesn't get in the way of tax reform at the state level either. The most recent state to pass significant tax reform was North Carolina. The Governor, who is a Pledge signer, signed a historic tax reform package into law last summer, which cut the personal income tax, reduced the corporate income tax, and eliminated a number of credits and deductions along the way. The plan was Pledge-compliant, supported by ATR, and reduced the tax burden on taxpayers and small businesses in The Tar Heel State. 

In her bid to fill the seat currently held by Democrat Justin Jones, Harris faces Republican Vick Gill, who has made a personal written commitment to oppose higher taxes by signing the Pledge. 

"I applaud Vick Gill for signing the Taxpayer Protection Pledge. Gill has made the bold decision to put his anti-tax rhetoric in writing and voters know exactly where he stands on taxes now," said Grover Norquist, president of Americans for Tax Reform. 

"The Pledge clearly and unambiguously endorses revenue-neutral tax reform and equally prohibits a net tax increase. To suggest otherwise reveals that your true motives include increasing the overall tax burden on Nevada taxpayers and small businesses. Becky Harris's willingness to raise taxes should concern voters in the 9th District. " continued Norquist. 

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Rhode Island Weighs Tax Reform

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Posted by Paul Blair on Tuesday, May 6th, 2014, 4:23 PM PERMALINK


The Rhode Island legislature has toyed with the idea of reducing the state sales tax for the past year. The small size of Rhode Island opens it up to lost business as taxpayers can easily purchase less expensive goods without real effort in neighboring states. That's precisely why reducing the sales tax from 7% to 3% is a good idea.

Cross border purchases will have the predictive effect of new revenue for the state. A reduction in the sales tax would also lessen the overall tax burden on Rhode Island low-income families while creating jobs that will provide opportunities for upward income mobility. The 4 point reduction in the sales tax will create more than 13,000 jobs according to the Rhode Island Center Freedom and Prosperity. 

A dynamic analysis of the tax reform proposal projects that although the state would lose $433 million in sales tax revenue, income tax receipts will increase by more than $200 million as well as revenue collected on cigarettes and alcohol. With greater economic activity and population growth over time, the state would also likely experience higher revenue from a wide range of things including gasoline. According to the report, the net state budget impact would be less than $50 million, a figure easily addressed with small spending cuts.

The bill is being sponsored by Democrat Representative Jan Malik, who says, "We have to find a way to lower taxes to make us more competitive with other states." 

Rhode Island has one of the highest statewide sales tax rates in the nation, though the application of the tax is extremely narrow, applying to only about a quarter of goods and services. The best designed tax system has a broad base and low rates. Dropping the rate to 3% addresses the second and is certainly a huge step in the right direction. Genuine tax reform should address the issue of Rhode Island's narrow sales tax base as well, in a revenue neutral way. 

"This important legislation would take a step in the right direction towards reversing course on decades of uncompetitive and anti-growth tax policies that cripple the Ocean State economy. Whether this bill’s full impact is phased in over several years or adopted immediately, it is a bold move in the right direction. The full legislature should have the opportunity to debate this bill’s merits which include more jobs, more investment, and a reduced burden on Rhode Island taxpayers," said Grover Norquist, president of Americans for Tax Reform. 

Rhode Island's sales tax isn't the only tax that is among the highest in the nation. The corporate income tax stands at 9%, which is the 6th highest among states levying a corporate income tax. The Ocean State has a long way to go to boost business and tax competitiveness and bills that address both of these issues should be debated by the full legislature in the coming weeks. 

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Florida Governor Rick Scott Delivers on Promise, Cuts Taxes by $500 Million This Year

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Posted by Paul Blair on Monday, May 5th, 2014, 1:44 PM PERMALINK


Last week, the Florida House and Senate unanimously passed another $105 million in tax relief on the final day of the legislative session. This brings the total for 2014 to $500 million, meaning Governor Rick Scott delivered on his March promise, to the dollar.

These were his words in his March State of the State Address:

“Together, we have cut taxes 24 times already and my hope is that we are about to cut them again... by another $500 million this year. As I tell the hard-working people of Florida as I travel our state: We want you to keep more of the money you earn because it's your money!”

S.B. 156, the first round of tax cuts was a $395 million tax cut which repealed a car tax increase signed into law by former Governor Charlie Crist in 2009, will save Floridians between $20-$25 per vehicle registration. That unanimously passed the House by a vote of 116-0 and Senate 40-0.

The most recent tax relief package includes new sales tax holidays for hurricane preparedness, back-to-school shopping, and energy saving appliances in September. It also includes the elimination of taxes on college meal plans. This $105 million tax cut also passed both the House and Senate unanimously.

Though the governor originally called for "cutting the tax on business leases and rolling back the business tax," the sales tax relief still takes a step in the direction of letting Floridians keep more of their hard-earned money.

The governor agreed, saying, “This is an extraordinary year. Let’s think about what we accomplished. $500 million back in Florida families’ pockets."

This stands in stark contrast to former Governor Charlie Crist’s fourth year in office, and record of accomplishments in general. The Republican, turned Independent, turned Democrat raised taxes by $2.2 billion, breaking his Pledge to oppose higher taxes, and has little economic accomplishments to speak of.

Click here to read our “Tale of Two Governors: Charlie Crist vs. Rick Scott.”

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ATR Launches Campaign Against Seminole County "Penny Tax"

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Posted by Paul Blair on Wednesday, April 30th, 2014, 1:36 PM PERMALINK


County Commissioners in Seminole County, Florida are asking taxpayers to fork over more money to pay for special projects after a series of "temporary" sales tax increases expired in 2012. County commissioners at the time decided not to renew the 10-year sales tax increase because they had at least $40 million in reserves. 

After spending nearly all of it, they're asking voters to approve a measure on the May 20 special election ballot that would raise the sales tax to 7 cents on the dollar for another 10 years, yielding more than $630 million in higher taxes for the county to spend. Americans for Tax Reform opposes the massive tax hike and has launched a campaign to educate voters about where their money is going and convince them to reject the "Penny Tax." 

A recording of the first call to registered voters can be heard here

"Hi, this is Linda Adams from Americans for Tax Reform calling to alert you to a tax increase on the May 20th ballot in Seminole County. The "Penny Tax" is a massive $631 million sales tax increase. County Commissioners took millions from the last tax increase meant for roads and spent it on the federal SunRail train project. They can't be trusted to spend your money the right way. If you're sick of getting nickel and dimed, vote AGAINST the Penny Tax. This call was paid for by Americans for Tax Reform."

The two 10-year sales tax increases that ran back to back took hundreds of millions of dollars from Seminole County taxpayers to fund a number of special interest projects. The first tax increase from 1991-2001 redirected $46 million for the federal train project known as SunRail, $36 million of which was spent between 2011-2013, according to an analysis of SunRail contributions remitted to FDOT from the county. That tax increase was designed to improve roads and safety but some was spent on SunRail, which was neither. 

Voters and taxpayers alike should be suspicious about what County Commissioners claim their tax dollars are being spent on. An audit report released Tuesday shoes that Seminole County had a balance of more than $210 million as of last September. As the Orlando Sentinel notes, "county officials say that money already is set aside for projects." Voters should demand more transparency than a promise that $210 million in funds is already dedicated to projects. 

Don't get nickel and dimed, vote against the Seminole County "Penny Tax." 

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West Virginia's Lance Wheeler Challenges Dr. Tom Takubo to Sign Pledge in 17th State Senate District


Posted by Paul Blair on Tuesday, April 29th, 2014, 2:21 PM PERMALINK


Efforts to regain control of the West Virginia legislature for the first time in more than eighty years have led to a number of competitive primaries throughout the state. One such race is West Virginia's 17th state Senate district in Kanawha County, a district that went 57 percent for Mitt Romney in 2012. 

In a recent editorial board meeting with Charleston's Daily Mail, all three candidates sat down for a meeting to discuss taxes, regulations, transportation, and a number of other issues. Of note, only one of the candidates refuses to take tax hikes off the table by signing the Taxpayer Protection Pledge to West Virginia voters: Republican Dr. Tom Takubo. His Republican opponent Lance Wheeler brought that up in the editorial board meeting. 

Lance Wheeler: "One of my top priorities is jobs. If we're going to fix the jobs crisis here, we have to do it by lowering taxes and limiting the amount of regulations. I actually signed the Taxpayer Protection Pledge, which pledges as a state Senator I will never vote to increase taxes on West Virginians or their businesses." (4:50) 

Lance Wheeler: "I've signed the Taxpayer Protection Pledge, which I'm not sure my opponent in the primary Tom Takubo has signed yet…I will make the pledge that I will not raise taxes... We do not have a revenue problem here in West Virginia, we have a spending problem."

Dr. Takubo: "I tell my patients, wait until you make any decisions…To handcuff myself is the wrong thing to do and if you're experienced enough, you know that. You gotta keep options on the table." (17:00)

Despite going on to acknowledge that there is unnecessary waste and bureaucracy in Charleston, Dr. Takubo refuses to put his opposition to higher taxes in writing by signing the Pledge because he wants to keep "options on the table." After discussing tax incentives and the medical community for a few minutes, Lance Wheeler pushed back. 

Lance Wheeler: "What you just heard there is the classic politician dancing around the question. He just said that he will not sign the Pledge to not increase taxes on West Virginians but you should take his word for it. That's not the type of leadership West Virginia needs. West Virginia needs someone who will sign on paper with witnesses like Delegate Skaff has done that they will not increase taxes…I will stand by that Pledge and I urge Tom Takubo [to] sign that Pledge as well because it is necessary to tell the people of West Virginia that you will not be increasing taxes anymore." (19:56) 

Delegate Doug Skaff, the other candidate in the race is a Democrat and the Assistant Majority Whip in the House of Delegates. That makes the only candidate to not sign the Pledge Republican Dr. Tom Takubo. 

ATR commends Lance Wheeler and Delegate Doug Skaff for putting in writing their personal written commitment to oppose higher taxes by signing the Taxpayer Protection Pledge. We urge Dr. Tom Takubo to take tax hikes off the table by signing the Pledge as well because as Wheeler rightly points out, West Virginia doesn't have a revenue problem, it has a spending problem. 

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New Poll: Majority of Virginia Voters Oppose Medicaid Expansion

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Posted by Paul Blair on Friday, April 25th, 2014, 12:28 PM PERMALINK


A new poll from Christopher Newport University's Center for Public Policy shows that a majority of Virginia voters oppose the Democrat-led effort to expand Medicaid in the Commonwealth. The state health program isn't the only thing voters have soured on; Democrat Governor Terry McAuliffe's approval rating now stands at 44 percent, down from a February poll that showed 53 percent of voters were optimistic about his governorship. 

At 53 percent, and by a 12 point margin, Virginians say that they oppose Medicaid expansion. A February survey showed general support for Medicaid expansion, 56 percent to 38 percent. That's a 15 point drop in support for expansion in two months. 

The February poll dug deeper by asking respondents if they would still support expansion if Virginia had to spend more state money to cover a decreased share of the program paid for by the federal government and only 41 percent said they would. Republicans in the legislature have continued to warn (in unison) that a reliance on the federal government for a 90 percent match for Medicaid funds is unreasonable, given Washington's debt and spending problem. ​​As the pollsters point out: "Republican skepticism concerning expansion has gotten through to voters.​"

“Democrats are losing the debate on expanding Medicaid in Virginia,” said Dr. Quentin Kidd, director of CNU's Wason Center for Public Policy. “This is mostly because they are  not convincing Independents that it will work. Voters seem to be moved by Republican  skepticism. Significantly, even in the Democratic-friendly territory of Northern Virginia, support leads opposition by only 2%.”
 
The ramifications of the Medicaid debate could be staggering if Democrats refuse to pass a clean budget that does not include Medicaid expansion. On July 1, the state government shuts down. Teachers and cops won't get paid. All state services stop. 78 percent of voters say they would blame Governor McAuliffe if that happened, which makes sense given his promise to shut the government down over Medicaid expansion last year
 
If there's anything to be extrapolated from the poll with U.S. Senate ramifications in Virginia, only 28 percent of respondents think the U.S. is headed in the right direction. That's a tough indicator if you're a U.S. Senator who was the 60th vote for Obamacare
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