As the 45-day General Assembly session is set to begin in Richmond one week from today, Republicans will begin their first battle of the statewide election year preserving Virginia’s traditional low-tax, business-friendly atmosphere with a one-member majority in both the House of Delegates and State Senate. In a state that has been trending more blue over the past few election cycles, Governor Ralph Northam (D) is trying to push through a tax hike that would impact at least 600,000 middle-class taxpayers who take the standard deduction.
“This ain’t your granddaddy’s Democratic Party,” Delegate Tim Hugo (R-Loudoun) said to The Washington Times, adding that “we’re one heart attack away from a leftist liberal takeover of the General Assembly.”
The Northern Virginia legislator said the governor’s plan would amount to a massive transfer of wealth from Northern Virginia to other parts of the state, benefiting many people who pay no federal income taxes. Northam presented his 2019 budget amendments to committees in Richmond last week, proposing $2.2 billion in new state spending, $1.6 billion of which would be recurring after his term ends.
Last year’s Tax Cuts and Jobs Act signed by President Donald Trump doubled the standard deduction – now $12,000 for single filers and $24,000 for joint filers – a provision designed to benefit the middle class. Like many states, Virginia’s standard deduction is conforming, meaning that is matches the federal deduction. Rather than advance a routine conformity measure, however, Governor Northam has opted to redirect bigger returns for taxpayers towards his spending package through the state’s general fund.
Democrats have refused to respond to the tax hike directly, instead blaming the Trump Administration and Republicans. Meanwhile, the Virginia GOP has pledged to offer an alternative budget which keeps $1.2 billion in the hands of taxpayers.
The encroaching Democratic Party will work to subsidize not only the earned income tax credit (ETIC), but also the gross underestimates the Commonwealth made on Medicaid expansion. Delegate Hugo said the Democratic caucus “miscalculated,” explaining that “$460-some million is not an insignificant number, and that’s one of those things we’re going to have to deal with also.”