By Stefanie Jackson
Virginia politicians representing citizens from Accomack and Northampton counties gave their constituents a preview of the first session of the 2019 general assembly at the semi-annual Eggs & Issues breakfast sponsored by the Eastern Shore Chamber of Commerce Dec. 5.
State Sen. Lynwood Lewis announced the six-week session will begin Jan. 9.
Virginia passes a two-year state budget in every even numbered year, so 2019 will serve as what Lewis dubbed a “tweaking year” in which adjustments are made to the budget prepared by former Gov. Terry McAuliffe and submitted by Gov. Ralph Northam.
Lewis said Virginia is one of the last states to recover from the Great Recession, but the state economy is in good shape.
He cautioned the audience that “the rubber band snaps back eventually” and Moody’s financial forecasters predict a mild recession in late 2019.
But Lewis added the state’s rainy day fund is “robust” and Virginia is one of only a few states to maintain the highest rating of “AAA” with all three bond-rating agencies, meaning it is financially strong and able to repay its debts.
The state has a $500 million budget surplus, but Lewis indicated that money will be spent on “bills in the drawer” like healthcare and the state retirement system.
He said state unemployment stands at 2.9 percent, the lowest it’s been in 11 years and almost a record low. He acknowledged that Accomack and Northampton counties “still have ground to make up” in lowering unemployment.
According to the Virginia Employment Commission, the current unemployment rate is 3.4 percent in Accomack and 4.7 percent in Northampton.
Both Lewis and Del. Rob Bloxom emphasized the need for Virginia to examine tax conformity, or how well state tax laws align with federal tax laws.
State legislators are undecided whether they want to conform to the current federal tax code that will no longer be in effect in four years.
Lewis and Bloxom offered different ideas on how to improve Virginia’s tax code. Lewis conveyed Northam’s interest in making the earned income tax credit refundable on the state level as it is on the federal level, at a cost of $250 million.
(When tax credits are nonrefundable, taxpayers cannot be refunded more money than they paid. When tax credits are refundable, taxpayers are paid the total dollar value of the tax credits even if they do not owe taxes or are owed a refund.)
Bloxom is considering raising sales taxes and eliminating the state income tax.
He believes his most controversial idea is allowing a noncitizen working in Virginia to obtain what he calls a “driver’s privilege card” so any Virginia resident working in the state, even if that person is not a citizen, can legally obtain a driver’s license if they have a valid passport.
In the pursuit of fairness, Bloxom favors requiring state parks to pay transient occupancy taxes like privately owned campgrounds. He also supports requiring an online business to charge sales taxes like a business operating in a physical storefront.
As an accompaniment to the proposal to charge sales taxes on online purchases, Lewis said legislators are considering offering state funding for school infrastructure. The estimated cost for all current construction needs of Virginia public schools is $3 billion to $6 billion.
“Traditionally, that has been a local responsibility,” Lewis said, “but we’re so down the rabbit hole” legislators feel obligated to step in. He cited Northampton High School as a prime example of a school that needs assistance.
By Stefanie Jackson