Opinion: Commentary: State Tax Plan Could Do More

Opinion: Commentary: State Tax Plan Could Do More

Amidst continuing revelations in the lives of the top three elected officials in Virginia’s state government, the legislature continues to work toward a final budget and tax conformity policy. Normally, tax conformity is handled early in session and is not a controversial subject. This year however, in the wake of the Trump Tax Plan, it has become a highly politicized issue as members of the Republican Caucus have used it as a chance to change tax policy.

Now that we have the Governor’s proposal and the House and Senate versions in conference committee, it is time to look at the tax plan that is the focus our budget.

SB 1372 is the legislation carrying the conformity plan with additional changes in the wake of new federal tax policy. It has a needed increase to the standard deduction, moving it up to $4,500 for individuals and $9,000 for married couples. It also offers a nonrefundable credit of $110 or $220 this fall for most tax filers. But, these two provisions aren’t enough to boost all of Virginia’s working families and provide nothing for Virginia’s lowest-income working families, many of whom are families of color.

This legislation leaves out policies that provide a targeted boost to low-income working families, like improving the state’s Earned Income Tax Credit (EITC). If an increased standard deduction is not paired with a refundable EITC, the plan will not provide much relief to a large segment of taxpayers. According to the Commonwealth Institute for Fiscal Analysis, taxpayers with incomes below $20,000 would receive less than the maximum benefit from the increased standard deduction and in many cases no benefit at all. African American households represent about 31 percent of Virginia’s households with income below $20,000 (compared to 19 percent of the state’s population).

This plan largely restores the state and local tax deduction for homeowners with high property taxes, but it did not include an important provision to rein in tax avoidance by profitable multinational corporations with overseas profits.

At a time when it has become painfully crystallized the many ways in which racism affects our state, we must demonstrate a commitment to address the harms of past and present-day remainders of structural racism found in our system of government.

SB 1372 did pass the House of Delegates, but only after a number of Virginia Legislative Black Caucus members, including myself, would not support it the first time through on the House Floor. We were able to negotiate additional funding back into the budget for some important programs and institutions including diversion program funding to address the increasing conviction crisis, additional funding for two of our Virginia colleges, and additional funding to help some of the state’s K-12 schools in the most need.

Even with the important items that were negotiated, the budgets passed in the House of Delegates and Senate of Virginia come with serious problems for our community. The Governor’s Budget included additional funding for education, healthcare, and housing programs. These programs were either slashed or severely reduced in the House and Senate versions of the budget. While some of this may change as negotiations continue and the conference committees does its work, the overall picture in Virginia is worth consideration.

Direct aid to public schools is slated to be cut by $143 million in the House budget ($87 million in the Senate budget). That means that Alexandria City Public Schools will lose out on up to $383,600 in direct aid to public education that was on the table this year. While some of this is in negotiation, it is interesting to note that the 18 school divisions with the most students of color, of which Alexandria is one, are impacted much more harshly than the 70 school divisions with the most white students. This is in addition to cutting $15 million in need-based financial aid, at a time of growing college costs and student debt. These budgets also include stripping money from mental health programs for incarcerated individuals and vaccine programs for children. One of the most worrisome aspects is the massive difference in the Governor’s proposal for the Housing Trust Fund, where the House reduced the amount included by $19 million. This is especially worrisome for our region with ever increasing issues of affordability.

I voted for the House budget in order to move it into conference, where I hope that through negotiation we are able to restore some of these priority agenda items. Otherwise, I may not be able to support the final version of the budget when it comes back to the House Floor for a vote.

Charniele Herring represents Alexandria City’s 46th District in the Virginia General Assembly where she serves as House Minority Caucus Chair and on the Courts of Justice, Counties, Cities & Towns, and Agriculture, Chesapeake & Natural Resources Committees. Follow Herring online at www.charnieleherring.com.