Virginia gubernatorial candidate Terry McAuliffe’s campaign today released a new report, “Cuccinelli’s $8 Billion Tax Plan,” describing how Ken Cuccinelli’s budget gimmicks and support for eliminating the corporate income tax could cost the Commonwealth at least $8 billion over four years and deplete necessary funding streams from localities for education, transportation, and other critical investments that will keep Virginia competitive in the 21st century.
The report comes on the heels of a push from the Cuccinelli camp on Wednesday suggesting that McAuliffe’s budget and tax proposals could cost Virginia $17 billion over four years.
The full report from the McAuliffe campaign on the Cuccinelli budget and tax plan is below.
Cuccinelli’s $8 Billion Tax Plan
Ken Cuccinelli has proposed massive tax breaks for the wealthiest Virginians and corporations and has offered no specifics on how he will pay for them, which alone would blow a $1.4 billion hole in the state budget each year. To compound that, Cuccinelli’s running mate E.W. Jackson said he and Cuccinelli want to fully eliminate the corporate tax rate, which would create an additional $660 million loss in revenue in addition to Cuccinelli’s $1.4 billion proposed cut, which already included a one third reduction on the corporate tax rate.
In total, Cuccinelli’s plans would reduce state revenue by $2 billion annually if Cuccinelli and Jackson continue to offer no specifics on how to make up for the lost revenue, costing the Commonwealth at least $8 billion over four years and placing greater burdens on Virginia’s middle class families.
Cuccinelli’s tax plan: “More likely to manufacture an unnecessary budget crisis”
Under Governors Warner and Kaine, Virginia won the title of the best state for business. This in part is because of Virginia’s “already-low tax rates, and its tax regulatory system,” as the Virginian Pilot editorial board stated. However, over the last three years, Virginia has dropped to 5th, much in part due to its lack of up to date transportation infrastructure.
Ken Cuccinelli’s extreme tax proposal “is more likely to manufacture an unnecessary budget crisis that undermines the commonwealth’s fragile recovery, pushes a greater financial burden onto cities and counties and still leaves the state incapable of fulfilling its responsibilities,” the Virginian Pilot editorialized in May 2013.
The Pilot Editorial Board continues, that the plan would cut “$1.4 billion from the state’s annual budget at a time when Virginia’s general fund has already declined 1 percent,” and by refusing to indicate which programs he would cut in order to make up for the lost revenue, or which loopholes he would close to serve the same goal, Virginians are left to assume that they would have to pay higher taxes, or lose funding for education or transportation.
“What are you going to do to keep localities whole?”
When Cuccinelli announced his plan, Virginia’s Republican Lieutenant Governor Bill Bolling condemned the irresponsible gimmick, stressing the impact the lost revenue will have per year on Virginia’s communities and families. “What are you going to do to keep localities whole, or to keep the state whole, are you just going to expect people to further cut funding for education and transportation and health care?” Bolling questioned in an interview in May.
The Washington Post called Cuccinelli’s plan “fantasy,” and said it “would mean eviscerating education, public safety, infrastructure and social services, which together account for a large majority of that spending.” The longest-serving Republican member of the Virginia House of Delegates, Vince Callahan, who served for 36 years on the Appropriations Committee, said the cuts would be “draconian,” and that “money from cutting any loopholes is minuscule compared to the tax cuts Cuccinelli wants”—another voice discussing the real implications of Cuccinelli’s tax magic.
Cuccinelli wants to eliminate the corporate tax rate completely
While Cuccinelli’s initial plan, released in May, called for a reduction of the corporate tax rate from 5.75% to 5%, just four months later, his running mate E.W. Jackson told supporters that Ken Cuccinelli wants to eliminate the corporate tax rate completely. This would add an over $660 million loss in the state budget annually, and when added to Cuccinelli’s original tax cut plan over four years, could result in at least $8 billion in revenue loss during Cuccinelli’s term if elected.
In September 2013, E.W. Jackson stated that he and Cuccinelli “really believe that if you plan properly, you could do away with the corporate tax in Virginia.” He added that, “this is something Ken [Cuccinelli] won’t talk about, not because he’s willing to, but because he’s only got four years, of course.” If elected, Jackson pledged that he will “certainly work to make sure that we get rid of the income tax” too. Again another tax cut for Virginia’s wealthiest, with no specifics on which loopholes to close or programs to cut to make up for the lost funds.
Just a week before E.W. Jackson said those words, Cuccinelli assured his supporters that he and Jackson are “running together” and “running hard.”
Cuccinelli’s plan: Bad for business
Rather than boosting Virginia’s economic status, editorial boards and leaders from both parties from across the state have criticized Cuccinelli’s plan, saying that it could lead to economic turmoil and greater burdens on the middle class.
The Washington Post editorialized about the impact of Cuccinelli’s plan: “Mr. Cuccinelli suggests that cutting corporate income taxes by a third would transform Virginia into an irresistible magnet for businesses, which would grow at lightning speed. But what businesses, and which employees, would be content to live in a state whose budget starves its schools, social services and public safety?”
Vince Callahan expressed a similar sentiment, noting “It frightens me to put the Commonwealth of Virginia into the hands of someone who has no vision for Virginia.”
Cuccinelli’s tax proposals, his willingness to starve localities of funding for critical infrastructure and education funding, and his refusal to embrace the programs that actually encourage businesses to locate in Virginia and grow, such as business incentive programs, show his lack of understanding of what Virginia needs in their next governor. Even Republican Lieutenant Governor Bill Bolling criticized Cuccinelli’s business proposals, stating, “You can get rid of all our incentives, but let me tell you, there will be a price to pay for that…You’re not going to be a jobs governor.”
Virginians need leaders who will put pragmatism over ideology, who don’t use fuzzy magic to try to mislead Virginians into believing their irresponsible budget plans. Virginians haven’t fallen for Ken Cuccinelli’s “fuzzy math” or “tax magic”, and they don’t want a governor that will cost the Commonwealth at least $8 billion over a term.
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