Youngkin $300 Tax Refund Bill Advances in House Finance Subcommittee

 

A House of Delegates Finance subcommittee advanced a bill to provide a $300 income tax refund for individuals and $600 for married persons for the 2021 tax year, a key promise from Governor Glenn Youngkin’s Day One Game Plan.

“Virginia has seen a steady increase in its tax revenues, and it’s far exceeding the forecasted growth, largely due to an increase in non-withholding taxes and a standard deduction below the federal level. Virginians have overpaid on their taxes as evidenced by the state’s surplus, and should have some of their money repaid. The aid given to Virginia from the federal government to facilitate the Commonwealth’s response to the COVID-19 pandemic resulted in Virginia ending its 2021 fiscal year with a surplus of over $2.6 billion,” HB 935 sponsor Delegate Roxann Robinson (R-Chesterfield) said in the Monday subcommittee meeting.

After Youngkin won the election, then-Governor Ralph Northam included a smaller refund of $250 for individuals, $500 for joint filers in his budget proposal.

Youngkin’s Deputy Secretary of Finance Charles Kennington spoke in favor of the bill.

“The bill before us antes up what is already in the budget,” Delegate Vivian Watts (D-Annandale) said. “This increases it 20 percent. And essentially, what we’re doing, however you identify the surplus, we’re taking that surplus, let’s say round numbers, $1 billion, and returning it directly to taxpayers at a time when, arguably, because of COVID, they need it most. I’m going to be supporting this measure only out of a relative choice that I look  at what is being proposed in the total agenda for additional budget amendments over and above what the outgoing administration presented.”

Watts argued that the bill is progressive in a way, unlike a flat tax rate across all income levels.

Yes, Every Kid

She said, “When you say the same thing to everyone, that can be described as quite regressive. Well, that’s if you’re taxing at that level, the same percentage to someone who’s barely making it is a really hard bite compared to those who are $150,000, $250,000. Whereas when you’re returning money the same to everybody, it is a much bigger help to those at the lower income who received $300 than someone at $150,000 receiving that same amount. Therefore on returning it, of all the alternatives that I see out there that are being presented by the Governor in his priorities, it is the only one that I am comfortable with, while I would prefer a bill that’s coming up about finally making earned income tax credits more refundable, it is the only one that I see that has this progressivity to it. It is also the only one that’s dealing with arguably one-time surpluses until proven otherwise in a one-time return directly into taxpayers pockets when they need it the most.”

Delegate Richard ‘Rip’ Sullivan (D-Fairfax) said he wanted to see a more targeted refund that would make more money available to those at lower income levels. Delegate Candi Mundon King (D-Prince William) noted that the impact statement of the bill includes a $202.8 million dollar impact in the 2022-23 fiscal year.

“I appreciate the spirit of this, and I know that for low-income families, this will definitely have an impact,” Mundon King said. “My concern is our support for human services, particularly those with disabilities, and how this could potentially impact that, not knowing where this money will come from or impact.”

Delegate Joe McNamara (R-Roanoke) said the $202.8 million was probably coming from the surplus.

The bill passed seven to two, with Watts joining all the Republicans; Sullivan and Mundon King voted against recommending that the Finance Committee approve it.

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Eric Burk is a reporter at The Virginia Star and the Star News Digital Network.  Email tips to [email protected]. 

 

 

 

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