Candidates for General Assembly assured 200 former civil servants on Wednesday, Sept. 10 that their age-related tax deduction was safe. But several candidates warned that other taxes could go up next year as Virginia looks to restructure its aged tax system.
“In 1994, we made a commitment to you all that we would implement the age deduction,” said Del. Tom Bolvin (R-43). “I think we need to keep that promise to our seniors.”
Sen. Linda “Toddy” Puller (D-36) agreed. “I don’t think we should go back on that agreement.”
The General Assembly hopefuls faced off at St. John's Methodist Church in Springfield in front of the Springfield chapter of the National Association of Retired Federal Employees.
Since 1994, people over 65 have been able to deduct $12,000 of their income from state income taxes. Those between the ages of 62 and 65 have been able to deduct $6,000 from their taxes. The deduction applies to all seniors, regardless of their income or assets.
BOTH SEN. Jay O’Brien (R-39) and his Democratic opponent Greg Galligan promised to keep the deduction in its current form, as did Del. Vivian Watts (D-39). Chris Braunlich, GOP
candidate for the 36th Senate district, said he was “inclined” against placing restrictions on the current deductions. Mark Sickles, Democratic candidate for the 43rd House District said he would work to keep the deduction.
Del. David Albo (R-42) also said he wanted to see the age deduction stay on the books. But he added that some changes might need to be made to the system.
“Honestly, I can’t understand why someone who’s making $300 – 400,000 a year should get this tax deduction just because they’re 65 years old,” he said.
Sen. Ken Cuccinelli (R-37) was unable to make the event but O’Brien read a statement on his behalf that said he would lean against elimination the age deduction. But, the statement said, “I am trying to take as few absolutist positions as possible with regard to changes in the tax code.”
A special commission of lawmakers is studying possible changes to the state’s tax code. Until the commission releases its recommendations, Cuccinelli said he would not take strong positions on specific tax issues.
This appeared to be a departure from his previous hard line position against taxes, which led him to pledge to pass legislation capping real estate tax increases at 5 percent.
His Democratic opponent, Jim Mitchell, said he would favor a gradual change in the way the tax deduction system works but vowed, “We will not be balancing that budget on the backs of Virginia seniors.”
Sen. Dick Saslaw (D-35) reiterated Cuccinelli’s position, saying “I have been very reluctant to commit to anything with respect to how our tax code is written.”
Nevertheless, he added, “I don’t think [members of the tax-restructuring committee] are going to do away with the age deduction.”
Del. James Dillard (R-41) agreed. “I can tell you with certainty that the age deduction will not be eliminated,” he said.
The candidates promises did not satisfy Richard Raybold, area vice president for the association.
“Some of them were straightforward, some of them were trying to hide the fact they were waffling,” he said, adding that “most of them” were waffling.
IF LAWMAKERS are going to hold the line on the age deduction for seniors, they are going to have to raise revenue elsewhere or implement a new round of cuts to cover a budget shortfall that is projected to exceed $1 billion next year. But the state last year already cut $6 billion out of the budget, which caused Saslaw to note, “There’s nothing left. There are no gimmicks left.”
The amount of money the state brings in is going to have to increase, he said.
Several of the candidates mentioned raising the tobacco tax, now the lowest in the nation, as a possible way to make up some of the shortfall. Proposals to raise the tax on cigarettes died in last year’s General Assembly session and it is uncertain whether they will fare any better next year.
“Cigarette taxes are less than food taxes,” said Puller. “Something is wrong.”
Dillard warned: “Don’t be fooled by anyone who says you can do all these things and not have a revenue enhancement.”
Overall, taxes are going to go up, said Bolvin.
“We have to raise revenue,” he said. “Some people will pay less, some people will pay more.”
Elaine Kane, a former Department of Defense employee, said she was resigned to the prospect that some taxes would increase.
“I do think that taxes need to be raised,” she said. “It’s something that I or anyone hates to say, but I think that they do need to be raised.”
The prospect of higher taxes did not seem to bother Joe Casey either.
“As a practical matter, if we want to have education, we’ve got to pay for it. If we want to have roads we’ve got to pay for them.”
But raising more money promises to be a difficult battle in Richmond next year as several lawmakers are holding firm on “revenue-neutrality,” which would require that the overall state revenue stay the same even as tax rates are adjusted for various segments of the population.
“If it is not revenue neutral in the aggregate I think it is going to be politically impossible to get it through,” said Del. Tim Hugo (R-40) in an interview last week.
“The farther you get from the Beltway, the less you see it,” he added. “The votes aren’t there.”