The holiday season has arrived and we are in the final month of the countdown to the start of January’s General Assembly Session. It has been a very busy fall with no shortage of campaign “promises,” redistricting, constituent meetings, and numerous legislative briefings that included the Senate Finance and Appropriations Committee Retreat in mid-November.
The annual event is usually attended by elected Senators from every district in Virginia. It is a deep dive into the state of the economy with professionals and staff presenting the realities of Virginia’s revenues as well as the short and long-term expenses. Despite the pandemic, Virginia has a revenue surplus thanks to the infusion of ARPA funds and other federal monies earmarked for the Commonwealth. Let me remind you that this is a one-time good news story that cannot be factored into long-range fiscal planning.
Campaign rhetoric on tax relief often sounds sweeter than hard facts. Since Labor Day, the airwaves have been inundated with “Day One” pledges. To be clear, tax reform is not done with an executive order. With equal clarity, the legislature will play its significant role in any tax reform dialogue. Some of us still recall the infamous “no car tax” pledge, which continues to have a major local impact. It now costs taxpayers almost a billion dollars in the state spending plan.
The Governor-elect continues to look at eliminating the sales tax on groceries. Not a terrible idea, but again one with a serious impact on our localities. Local budgets are supplemented with millions of dollars that are generated from this revenue source. Those funds are often invested back into schools, community services, and other items that sometimes get shaved in leaner times. The lost revenue will need to be replaced, likely by the Commonwealth.
Another idea being considered involves the gas tax. Much of my adult professional career came as a gasoline/service station owner and operator. I speak from experience in saying that the $80 to $100 you may save from a 10 cent suspension of the state gas tax will be more than eaten up by the mechanic’s bill you get for a new tire and alignment after hitting a pothole that the revenue from the gas tax currently repairs.
Last fiscal year, the gas tax generated nearly $1 billion in revenue. This revenue goes towards supplementing Metro, the Virginia Railway Express, and also provides funds for road and highway maintenance. Potholes, road resurfacing, and snow removal on the main thoroughfares are the obvious items that require increased revenue, not a cut. To be candid, I hear from constituents more about road conditions than any other issue in the 35th District.
Covid-19 hit Virginia families hard. As we meandered through the unknown challenges of the pandemic, Governor Northam’s leadership helped minimize health risks and deaths. However, our kids experienced learning loss, minimal socialization, and in many cases developed mental health issues. With the schools shuttered, and the various roles of public education evolving, families coped as best as they could.
There was a migration to private schools as well as unique arrangements for those who could afford it. This is attributable to a 10 percent decline in public K-12 enrollment. As you may know, enrollment is the basis for local funding for public education. Annually, local school boards are allotted funds based on student enrollment. This process is called re-benchmarking. In 2021, school districts were “kept whole” with ARPA funds despite enrollment declines. That revenue stream will disappear as we move forward. Bear in mind that fixed overhead such as payroll, climate control, additional student assessments, and identified needs trend upwards.
Statistics show the significant benefit of early learning. There is no denying that the earlier a child gets into a structured program such as Pre-K, the better the chance for lifetime success. During the pandemic, enrollment in both Pre-K (by approximately 8 percent) and kindergarten (by approximately 4percent) declined. Virginia provided $50 million in the current fiscal year to expand the Virginia Preschool Initiative Program to include at-risk three-year-old’s, provide compensation supplements to early childhood teachers, and incentivize public-private delivery models of preschool. Public education reaches most Virginians. Going back to Richmond, I will continue to lead the fight for the next generation by building on long-term priorities.
I extend my sincere greetings of the season to each of you. As we continue to emerge from the grips of the pandemic, may you and yours enjoy good health and prosperity from the economic recovery we are experiencing. Best wishes for a safe and Happy New Year.