Youngkin proposes another $1 billion business, VA income tax cuts – NBC4 Washington

Virginia’s finances could cut another $1 billion in tax cuts and increase government spending. Glenn Youngkin said Thursday as he unveiled his proposed amendments to the biennial state budget.

The Republican governor called on lawmakers to lower corporate and income taxes. In a speech in Richmond, Youngkin noted that his vision is fiscally responsible and will not only help families cope with a bleak economic outlook, but also make Virginia more competitive in attracting new businesses.

“This budget speaks to the reality of a looming economic storm. It also speaks to the need to accelerate results and the fact that our state’s finances have never been stronger,” Yankin, a former private equity executive, told the House and Senate Member of the Currency Committee.

The governor’s proposed amendments to the 2022-2024 budget will serve as a starting point for negotiations when the politically divided General Assembly convenes in January. Spending plans typically undergo major revisions before lawmakers send them back to the governor for his consideration and possible further revisions.

Youngkin campaigned last year on promises of tax cuts and signed a roughly $4 billion tax relief bill earlier this year.

This time, he’s asking lawmakers to raise the standard deduction again and lower the top income tax rate from 5.75 percent to 5.5 percent, starting at $17,001, if general fund income meets expectations. His office estimates that the package of reforms he proposes will save an average family of four $578 a year.

His plan does not include a reintroduction of the gasoline tax holiday or a complete repeal of the grocery tax that was lowered earlier this year.

In addition to reducing the corporate tax rate from 6% to 5%, Youngkin wants to create a statewide 10% corporate income tax deduction for small businesses and “pass-through entities.”

Some Democrats expressed concern about the proposals at Thursday’s meeting. Treasurer Stephen Cummings has defended the focus on corporate tax rates, which he calls “headline figures” an important signal for businesses deciding where to set up shop.

In another briefing document shared with reporters ahead of Thursday’s speech, the governor’s office noted that Virginia was able to maintain tax revenues despite growing concerns about the impact of inflation, rising interest rates and the possibility of a recession next year. reduce.

“With a conservative budget and unprecedented balance sheet strength, the Governor believes the Commonwealth is in an excellent position before, during, and after challenging economic conditions,” the document said.

It noted that the state’s rainy day fund balance is on track to reach $4.2 billion by the end of fiscal year 2024.

On the spending side, Youngkin needs $450 million to identify and acquire industrial properties. Youngkin has said he thinks the state needs to work harder on building business-friendly sites to attract major manufacturing employers. The funding would top the $150 million allocated to so-called “megasites” earlier this year, plus the more than $100 million spent on a range of sites over the past decade, but a previous Associated Press review held.

The governor proposed an additional $427.7 million for public education, which he said would combat the loss of learning from the pandemic and increase funding for his “Lab Schools” initiative.

He wanted to pay teacher retention bonuses next August and fund salary increases, proposals that were quickly shot down by the Virginia Education Association.

Youngkin called for spending $674 million on “long-delayed environmental projects and Chesapeake Bay initiatives,” including efforts to clean up the waterways that flow into the bay.

Under his proposal, the city of Richmond would receive $100 million to help address glaring problems with its aging combined sewer system, which carries both wastewater and stormwater and often overflows, dumping sewage into waterways, including the James River. waterway.

The governor is also seeking an additional $230 million for initiatives to improve behavioral health services, a goal he outlined at an event Wednesday.

Republicans who control the House of Representatives praised Jankin’s proposal.

House Appropriations Committee Chairman Barry Knight, a Virginia Beach Republican, said he thought the governor’s plan was “a great place to start.”

He said the budget was well crafted and the tax cuts sustainable because some of them came with triggers, meaning they would not take effect unless revenue forecasts were met.

“We know it’s a cost to the government. We know we have some excess revenue, but — you know — our crystal ball isn’t that far ahead,” he said.

Democrats, who control the state Senate, have been less generous. Janet Howell of Fairfax, co-chair of the Senate Finance and Appropriations Committee, predicted that Jankin’s tax cuts would be “extremely controversial.”

“We have a long list of unmet needs in the state, something that the General Assembly has promised for years and we haven’t delivered on. So this is our opportunity to deliver on what we’ve promised,” she said.

Youngkin – who has not publicly ruled out a possible 2024 presidential run – ended his speech by urging all lawmakers facing elections in 2023 to work together.

“In the next few weeks, are you going to be haunted by the partisan animosity of the election year? Or are we going to rise above and prove together, yes, we can get things done?” he said.

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