Tomorrow, the Virginia House and Senate will vote on both their own budgets (HB 30 and SB 30).  The problem is that both contain tax increases.       

Senate Bill 30 contains tax increases masquerading as “fees,” such as: the 0.5% tax on property/casualty insurance and an 18 cent per line “fee” on phone lines; together estimated to cost taxpayers $105 million over the FY2011-2012 budget cycle.   By no means is this is a comprehensive list. It is hard to understand how one could even try to call these “fees” they are simply tax increases.  To see ATR’s letter asking that all tax increases be stripped from SB 30, click here.
House Bill 30 contains a $60 million tax increase on businesses that is imposed with the elimination of the Section 199 deduction.  HB 30 decouples the Virginia code from the Federal tax code in turn raising taxes on Virginia’s businesses.  To see ATR’s letter asking that all tax increases be stripped from HB 30, click here.
Additionally, there is an obscure tax increase that has seemed to fly under the radar of many.  Governor Kaine, in his outgoing budget relied on $8 million from a tax increase that has been labeled a “mark-up.”  This “mark-up” is on alcohol sold at ABC stores.  By increasing the price on alcohol, the state is not only taking more revenue directly from the 2% “mark-up,” but they would also be collecting more revenue from the excise taxes.  To see ATR’s letter asking that this be stripped from the budget, click here.   
As Governor McDonnell stated in the State of the Commonwealth address, “Certainly the national and global economy has had a significant impact on the revenues and the budget in Virginia.  But that is only part of the story.  Ronald Reagan used to say ‘Government is too big and it spends too much.’  He was talking about the federal government at the time- but it applies to state governments as well” Governor McDonnell continued, saying, “Since I got elected to this body in 1991, state spending has more than tripled, far beyond the rate of growth in population and inflation. We can do better.”  Gov. McDonnell’s words sum up the problem.  The current problem is not a revenue problem, but rather is a symptom of out of control spending. 
Moving forward with budget deliberations, all of these revenue grabs need to be removed in order to build an acceptable budget for FY2011-2012.