“The only thing we have to do differently is everything,” Youngkin told supporters gathered at a Fairfax County construction company, describing a Virginia that he says cannot compete for jobs and crushes its residents with taxes. “Because to fix what is broken we can’t settle for half measures, we need a whole new approach to absolutely uproot the liberal bureaucracy that has taken hold of Richmond and to make government accountable to the people again.”
The campaign of Democratic nominee Terry McAuliffe, who is seeking a comeback after serving as governor from 2014 to 2018, dismissed Youngkin’s proposals as out of touch with the state’s fiscal reality.
“All of Glenn Youngkin’s Trumpian tax plans have one thing in common: they would lead to drastic cuts to public education and drive Virginia’s economy into a ditch,” McAuliffe spokeswoman Christina Freundlich said in a statement. She also noted in a phone interview that Virginia was recently named the best state for business by CNBC for the second-straight time.
McAuliffe has released numerous policy proposals on his website and regularly criticizes Youngkin for failing to provide specific ideas of his own.
A Youngkin campaign spokesman said that the new package is not a response to the criticism. “This is a response to voters,” the spokesman said. “This is what we’ve been hearing as Glenn travels all across the state.”
The centerpiece of Youngkin’s policy prescription is a package of one-time tax cuts totaling some $1.8 billion and recurring tax cuts amounting to about $1.4 billion per year, according to campaign officials who previewed details of the proposals for The Washington Post on the condition that the aides not be named.
Most of the one-time cuts would be paid for out of a surplus of some $2.6 billion that the state projects for the coming budget year, the campaign aides said, suggesting that the surplus was the result of over-taxation in the first place.
Gov. Ralph Northam (D) has said the surplus is the result of stronger-than-expected economic growth during the recovery from the coronavirus pandemic.
Much of the projected surplus is already committed under state law, including $1.1 billion that must be deposited in the state’s “rainy day” reserves fund; $314 million that goes to a water quality improvement fund; $116 million to the transportation trust fund; and several hundred million dollars that must be set aside for various budget contingencies, according to state officials.
Nonetheless, Youngkin’s team proposes using some of the money to pay for one-time rebates of $300 for individual taxpayers and $600 for couples filing jointly, as well as for suspending a recent increase in the state gasoline tax and enacting a tax holiday for small businesses.
Youngkin’s plan also calls for doubling the state’s standard income-tax deduction, making it $9,000 for an individual and $18,000 for a couple filing jointly. Campaign aides said that change would save the average married couple about $518 a year.
That appears to represent a step back from Youngkin’s statements earlier in the campaign that he was interested in eliminating the state income tax, which provides about 70 percent of the revenue in the state’s general fund each year. A campaign spokesman said that Youngkin’s proposals are a way “to give taxpayers relief as quickly as possible” and that his desire to eliminate the tax was “aspirational.”
Along with the income tax cut, Youngkin intends to propose eliminating the state’s 2.5 percent tax on groceries and exempting the first $40,000 in veteran retirement pay. Youngkin’s campaign aides said they were confident the state budget could absorb the loss of annual revenue at current expected growth rates.
Youngkin pledged to create 400,000 new jobs during a four-year term in office, though he did not offer much detail on how he would achieve such a massive number. He said he would aim to cut state business regulations by 25 percent — scaling up a pilot program that has been underway for three years — and aides said he would work with the General Assembly to streamline requirements for starting a new business as administered by the State Corporation Commission.
In education, Youngkin promised raises for schoolteachers, which aides said would cost about $100 million per year.
He also said he would create 20 new charter schools around the state at a cost of about $100 million. Even during its years under Republican control, Virginia government has resisted the charter school trend; the state has only a handful of such publicly funded, independently run schools — a fraction of the number in other states.
Youngkin drew a cheer from supporters when he vowed to keep public schools open five days a week — something that’s already required by state law. He also promised that “I will not allow covid lockdowns to ever occur in Virginia again,” speaking on a day when both hospitalizations and the seven-day average of daily cases in the state are at highs not seen since February.
The crowd cheered even louder when Youngkin said he would ban the teaching of critical race theory, which despite a conservative outcry is not part of the state’s education curriculum.
Youngkin also will propose spending about $200 million over the next two years to provide additional raises to state police, sheriff’s deputies and corrections officers statewide. The General Assembly recently approved one-time bonuses for those categories, using a portion of the $4.3 billion the federal government allocated for Virginia under the coronavirus relief plan.
Roughly $1 billion of that American Relief Plan money remains unappropriated, and Youngkin’s team proposes using much of that to pay for improving staffing at the state’s mental health facilities, investing in site readiness and other economic development efforts, and expanding workforce training.
Some of Youngkin’s proposals mirror efforts already underway. For instance, he is calling for all Department of Motor Vehicles offices to reopen for walk-in service, which the General Assembly has already set in motion. During a special legislative session early this month, lawmakers gave the DMV 30 days to submit a plan to reopen for walk-ins and 30 days beyond that to carry it out.
He also promises to modernize the Virginia Employment Commission, which struggled with outdated computer systems and a lack of staffing during the heightened demands of the pandemic. Northam and the General Assembly have dedicated some $800 million to replenishing the state’s unemployment trust fund and have ramped up hiring at the agency.
The Youngkin plan also calls for changes to the way localities handle personal property tax. Currently, if the assessment of a home goes up, a locality can easily keep its tax rate the same, meaning the homeowner pays more on the higher valuation. Youngkin would propose requiring that tax rates go down when assessments go up, unless voters in a locality approve otherwise.
Like virtually all of the campaign’s proposals, that would require action by the General Assembly — which always faces pushback when it meddles in the few revenue powers granted to the state’s localities.
Control of the House of Delegates is at stake in this year’s elections, with Democrats defending a 55-to-45 majority. The state Senate is not up for election; Democrats hold a 21-19 advantage there, with tie votes broken by the lieutenant governor.
Youngkin’s campaign aides said that if elected, he anticipates the GOP also gaining control of the House and winning the lieutenant governor’s seat. But “he intends to work with Democrats no matter what the makeup of the [House] or the Senate is,” a campaign spokesman said.
The proposals being rolled out by Youngkin’s campaign are essentially its version of the budget plan that Northam will unveil before the end of the year, in which he will set priorities for the same pots of money for the next two-year spending plan.
Because the state constitution prohibits a governor from serving consecutive terms, it will be up to the next governor and the General Assembly to modify and adapt that plan.