Senate Majority Leader Saslaw Spars with Secretary of Finance Cummings over Administration Analysis That Virginia Is Lagging Economically

Secretary of Finance Stephen Cummings told the Senate Finance and Appropriations Committee on Tuesday that while General Fund revenues are performing well, there is an overall lack of economic growth in Virginia. That’s similar to the message from a letter Governor Glenn Youngkin sent to the Senate Finance and House Appropriations chairs last Friday. Tuesday’s discussion between Democratic senators and Cummings illustrated the policy divide on finance between the administration and the Senate.

Cummings said that January 2022 was the sixth consecutive month of revenues exceeding the prior year by more than 15 percent. “So, pretty remarkable times,” Cummings said.

“Obviously, the extraordinary level of revenues for the government is great, but that does not indicate success in our economy,” Cummings added. “It’s the result of external factors, and in our opinion, taxes that are too high.”

Cummings said a better evaluation would be based on comparisons with competitive states to Virginia identified by Youngkin: North Carolina, South Carolina, Tennessee, Georgia, Florida, and Texas.

“We’re lagging in population growth, job growth, and recovery from the pandemic,” Cummings said.

He said that Virginia’s low unemployment is also misleading, and highlighted 300,000 job vacancies in the state, making it difficult for companies to get workers. Additionally, he said, workers are leaving Virginia.

“We’ve had a net out-migration of 100,000 people out of Virginia going to other states,” Cummings said.

Senate Majority Leader Richard Saslaw (D-Fairfax) responded, “Listening to you, you’d think we were the poorest, most bankrupt state in America and everything’s going to hell in a handbasket. Companies are lining up, let me repeat that, lining up to come to Northern Virginia. Would they be doing that if we were taxing them out of existence? I mean, give me a break. How do you explain that and the fact that virtually none of us here ever get email saying, ‘Oh geez, you need to cut taxes.’ Then you saw the Wason poll yesterday that came out that […] the public doesn’t agree with you at all, or most of them don’t?”

Cummings said, “We have data here that supports everything I just said, and I do believe there is a problem here, because the state is not growing jobs. It’s not growing the economy.”

The presentation comes as both the Senate and the House of Delegates are about to pass their budget proposals. Youngkin has criticized the Senate proposal for not containing enough tax cuts. As part of the broader policy discussion in Virginia, a Wason Center poll published Monday showed voter preference for more government services instead of tax cuts. Meanwhile, Youngkin has asked Virginians to contact their legislators in support of tax cuts. After the proposals are passed, the chambers will have to reconcile the two separate versions into one compromise.

After the presentation Committee Chair Janet Howell (D-Fairfax) told Cummings, “I’ve been here 30 years now, and I can count on both of my hands the number of complaints I have gotten from Virginians about Virginia taxes. But I get on a daily basis, every day for 30 years, stories from people, pleas from people for better services, and I think that that is what we are going to find is a very different approach from this administration.”

State Senator Jennifer McClellan (D-Richmond) told Cummings that Virginia’s K-12 education isn’t fully funded, and that behavioral health needed to be fully funded as well.

“What I hear in my district, and when I’ve traveled around the state, is a desperate cry for fully funded K-12,” she said.

McClellan continued, “In some parts of the state it’s better than others, not because of the instruction provided but because, are we meeting the needs of the students in that community. So when you’re balancing out ‘Are we overtaxed or not,’ think about, ‘Are we meeting health care and education needs of our children and our families? Because businesses do look at that in deciding where to go.”

“I 100-percent agree with that, that those are all factors that are considered,” Cummings said. “I guess that my general answer to this and to Senator Saslaw’s comments is we have to be able to explain why we are not growing them.”

Later, Saslaw also challenged calls to cut the gas tax, saying that crude oil prices are the major factor in rising gas costs.

He said, “I didn’t think there was anybody left on this planet that believe that taxes has something to do with the price of gasoline. I mean, you all have got to be the last ones?”

During the meeting, Republicans focused on a point where Cummings said Richmond’s job recovery was just 30 percent after COVID-19 losses — worse than the rest of the state. Republicans asked what was driving that and posed some potential answers, but Cummings said he’s still trying to learn more.

“It’s stunning, honestly,” Cummings said.

“We don’t have a good answer for that, but we want to dig into it, because I think there’s got to be specific issues that Richmond needs to understand and see if we can address,” he said.

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Eric Burk is a reporter at The Virginia Star and The Star News Network. Email tips to [email protected].Photo “Richard Saslaw” by Bc979. CC BY-SA 4.0. Photo “Stephen Cummings” by Secretary of Finance. Background Photo “Virginia State Capitol” by Martin Kraft. CC BY-SA 3.0.




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