Eight-year-old Virginia O’Hanlon wrote a letter in 1897 to the editor of the New York Sun asking if there was really a Santa Claus. The editor’s response—“yes, Virginia, there is a Santa Claus”—became what is believed to be the most repeated editorial of all times. As the editor explained, “he exists as certainly as love and generosity and devotion exist.”
Virginians, not just by that name but residents of the Commonwealth as a whole, became true believers in Santa Claus last week as Gov. Ralph Northam presented his proposed budget for the next biennium. Record levels of revenue are available for appropriation as the state has been frugal during the pandemic while receiving record amounts of revenue from the federal government as well as a recovering economy. The Governor’s proposed budget is his last as he leaves office in January, and it will be up to the new governor and the General Assembly to decide what really happens to the additional monies. Certainly a wide range of requests that have lingered for years will be considered for funding.
Virginia is a triple A rated state financially, the best rating a state can receive, and is a repeat winner of the designation as the best state in which to do business. Of the $7.7 billion in new monies, Governor Northam has proposed that the biggest chunk amounting to $1.7 billion go to the “rainy day” reserves to help in future years if funding is short. Another billion dollars would go to the retirement system to reduce unfunded liabilities. Some of the new money would go into one-time capital projects rather than recurring cost projects including money for much-needed repairs to school buildings in some localities.
State employees and teachers whose salaries have lagged the private sector will receive a boost with teachers’ salaries projected to finally meet the national average. Much needed funds for mental health and public safety are also included.
The proposed budget includes $2.1 billion in tax policy adjustments that will be welcomed news to many taxpayers. The budget includes the elimination of the state’s 1.5% share of the sales tax on groceries that will be most helpful to low-income persons. In addition the budget includes one-time economic growth tax rebates of $250 for individuals and $500 for married couples. For the first time the Governor includes a proposal that I have introduced many times that would fund up to 15% of the federal Earned Income Tax Credit (EITC) for eligible families. Accelerated payment of the sales tax by merchants would also be eliminated.
Historically Black Colleges and Universities (HBCUs) would receive $297 million more for capital improvements, student support, and other needs if the budget is approved as proposed.
The proposed budget goes to the General Assembly where it must be approved by both houses. The new governor is certain to have some ideas as to how he would like to see the budget modified. Hopefully, however, there will not be too many grinches who will seek to spoil this wonderful holiday gift Governor Northam delivered.
Ken Plum is a member of the Virginia House of Delegates.
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