The 2019 legislative session officially ended nearly two weeks ago. We will gather in Richmond again on April 3 for the reconvene session. I have the privilege of serving the 35th District as well as serving as a senior member on the Senate Finance Committee and as a budget conferee for close to 10 years. Legislators must be good stewards of the tax revenues that come from hardworking Virginians. I am proud of the sound fiscal policy that’s been a cornerstone of every budget I’ve placed my stamp of approval on. On a personal note, as a small business owner I know what it’s like to have to make payroll while at the same time supporting a family and prioritizing household spending decisions.
One important topic of concern this session was conforming Virginia’s Tax Code to the federal government’s in the aftermath of the Tax Cuts and Jobs Act of 2017 (TCJA). It was critical for us to amend the biennial budget closing out FY 2019 and lay out the spending plan for FY 2020. Tax conformity identifies the state’s adoption of the federal definitions of income and adjusted income for both individuals and businesses. This then produces the revenue basis for building a balanced budget.
Different perspectives within the majority party in both chambers led to a delayed enactment of the policy that included deductible adjustments as well as refunds for Virginians. Under the TCJA, top income earners were the ultimate winners. With a resolution on the 2018 conformity issue, Virginians now have a consistent and concise model for filing their state taxes. Because of this policy decision, individuals can expect up to a $110 refund and married couples $220. Further, the Virginia Tax Department received the green light to start processing 2018 returns that had been filed beginning in late January. Clearly identifying revenues, budget negotiators from the House and Senate began the process of prioritizing critical investments for the Commonwealth’s economic wellbeing.
Virginia continues its steady recovery from its dependence on federal spending. The new Virginia economy is more diverse and a collaboration between business and education is the source for workforce development. The amended budget now before the Governor included key deposits in the rainy-day fund ($262.9 million) for this year and future years. Additionally, the revenue cash reserve deposits will ensure Virginia’s AAA bond rating, maximizing the Commonwealth’s ability to amortize its long-term bond projects.
Economic development investments put Virginia on the map as the place to do business in our global economy. While Northern Virginia is the economic engine, the Commonwealth is best served when all parts are lifted up. Investing $15 million to accelerate broadband expansion in rural and unserved areas will have far reaching results. An additional $2 million to develop business ready sites and building will attract more high paying jobs and capital investments throughout the state.
Another aspect of the environment found in this budget is a large investment in water quality improvement. Mitigating stormwater issues, $10 million is earmarked along with $25 million for Alexandria’s combined sewer overflow project, which addresses long term problems in the Potomac River and Chesapeake Bay.
The Commonwealth is facing a serious teacher shortage. Current compensation levels place Virginia in the lower tiers of the national pay scale. We have funded 5 percent pay raises for the educators that are tasked with developing our most precious natural resource, Virginia’s children. We added additional funds for the At Risk Add On, a program that addresses the many issues surrounding economic disparity and diverse student populations. With these and many other stressors, we are providing funds for a reduced counselor to student ratio in our schools.
This is a tiny overview of critical investments Virginians can be proud of how their tax dollars are being spent. Putting this column together required thousands of hours from staff, legislators and the public. I supported this budget and stand by the priorities in it.