Governor Ralph Northam touted Virginia’s 2021 $2.6 billion surplus and economic recovery in his annual revenue speech to a joint meeting of the Senate Finance and Appropriations, House Appropriations, and House Finance Committees.
“I am here today to update you on the Commonwealth’s revenues for the fiscal year that ended on June 30. And it’s good news. Really good news,” he said, according to prepared remarks of the Wednesday speech.
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As part of his “Investment Week” announcing American Rescue Plan Act (ARPA) allocation proposals, Governor Ralph Northam announced $862 million for Virginia’s unemployment insurance trust fund, depleted during COVID-19.
“Shoring up the Commonwealth’s unemployment insurance trust fund is a smart investment that will prevent Virginia businesses from paying higher taxes and allow our economy to continue surging,” Northam said in a Tuesday announcement.
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Virginia ended Fiscal Year 2021 with a $2.6 billion surplus, the largest in Virginia’s history, with a 14.5 percent revenue growth over FY 2020.
“We have effectively managed Virginia’s finances through the pandemic, and now we are seeing the results—record-breaking revenue gains, a recovery that has outpaced the nation, and recognition as the best place to do business,” Governor Ralph Northam said in a press release.
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Virginia’s minimum wage is going up to $9.25 an hour on May 1. The change is the result of 2020 legislation, part of several pro-worker changes initiated by the Democrat-controlled General Assembly in 2020 and 2021. Advocates say the change will boost the economy by enabling more people to pay rent and spend money in Virginia businesses. But opponents say the increase violates free-market principles and will harm employers who have to increase their hourly compensation while dealing with a COVID-19 economy.
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The Virginia General Assembly is moving forward with legislation that would effectively make employers who received Paycheck Protection Plan (PPP) loans liable for state taxes. Bills that would practically exempt all income from the forgiven loans have been replaced with legislation that caps how much of the loan is exempt. Business advocates warn that the taxes could surprise the struggling businesses that the PPP loans were meant to help.
The bills bring Virginia’s tax code into conformity with the IRS; Virginia’s tax law doesn’t automatically change to match federal law, so state legislators pass tax conformity bills.
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Delegate Joseph McNamara’s (R-Roanoke) HB 1790 will allow public schools to declare unscheduled remote learning days instead of snow days — but he’s not trying to eradicate snow days.
“I want kids to have snow days, and I want them to go out and build snowmen, and throw snow balls and have grilled cheese sandwiches,” he said. “I’ll use Roanoke County as an example. Several years back, they missed about 13 days of school in about a month and a half period. And when you have situations where you have ice in the mountains areas and kids can’t get back in to school for days sometimes, it’s not really a snow day. It’s a nasty, ugly day, and so this would give schools another opportunity.”
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Delegate Joe McNamara (R-Roanoke) has pre-filed HB 1787, legislation for the 2021 General Assembly session that will exempt business owners from state taxes on forgivable Paycheck Protection Program (PPP) loans. PPP loans are part of broad COVID-19 relief funding meant to help small businesses keep paying their employees.
When the PPP was passed by Congress in March 2020, the forgivable loans were exempt from federal taxes, but Virginia’s tax structure means the forgiven PPP loans are not automatically exempt from state taxes. McNamara said that could lead to confusion for business owners.
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Two Republican state delegates released a joint statement on Tuesday calling for the Speaker of the House Eileen Filler-Corn (D-Fairfax) to work with members on finding a way to hold in-person meetings during January’s regular General Assembly session.
Delegates Christopher Head (R-Roanoke) and Joseph McNamara (R-Roanoke County) said in the statement they are preparing to be in Richmond for the start of the regular session.
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