RICHMOND, VA (WWBT) - Democratic Governor Ralph Northam wants to boost education funding and state reserves, along with giving tax breaks to lower-income families. He laid out his budget proposal before the Joint Money Committees on Tuesday, but Republican leaders say it’s middle class families that will end up paying too much for it.
Northam’s proposed budget relies on the new federal tax cuts bringing the state a projected $1.2 billion windfall over the next couple of years. Republicans say that’s because many Virginia tax payers will end up paying more state taxes than they should.
Northam wants a $268 million increase in education spending, including boosting a planned teacher pay raise from three to 5 percent, increasing average salaries by about $2,500 a year.
“We’re losing great teaching talent to our neighbors in other states because they pay them more. A good teacher can turn a child’s life around, and we should pay them enough so they don’t have to take a second job just to get by,” Northam said in his speech to the House Appropriations and Senate Finance committees.
The Governor also wants to provide $80 million for low-cost loans to build new schools, which some Richmond schools desperately need.
After a House Select Committee studied school safety this year, Northam wants to beef up school security.
“I’m proposing money to expand training for our school resource and school security officers, for our threat assessment teams, and to enhance training and technical assistance on school safety,” Northam said.
He also wants to increase funding for affordable housing to cut Virginia’s high eviction rate, boost environmental conservation and expand broadband access in rural communities.
Republican leaders say they support funding many of those initiatives, but question how to pay for it. Since more taxpayers are expected to take the new larger federal standard tax deduction, Republicans want to change a state law requiring them to also take the state standard deduction, saying otherwise they’ll pay too much.
“I should be able to itemize and not be injured because I’ve got to do standard or itemization. And that’s where the bulk of the money is coming from,” said Republican House Appropriations Committee Chair, Delegate Chris Jones.
Northam also wants to make the Earned Income Tax Credit refundable. Lower income families that qualify could use the credit to offset any taxes they might owe, plus receive a refund check for any remainder of the credit.
“This work credit, which we already have, goes to our working, middle-class Virginians like our teachers and first responders,” Northam said.
Republicans say families who do have to pay taxes would end up paying for those refunds.
“Those are individuals that are not paying taxes that we’re going to write them a check for what they haven’t used of the Earned Income Tax Credit. But yet there are working Virginians who are paying the taxes under his proposals that have absolutely no relief,” said Republican Co-Chair of the Senate Finance Committee Tommy Norment.
The Governor is also calling for a law to require internet retailers to charge state sales tax on purchases in Virginia. Currently, when retailers don’t collect the sales tax, shoppers are expected to pay it on their tax returns, though many don’t.