Northam’s budget plan would raise gas and tobacco taxes, but not income tax

Governor Northam proposes state budget

RICHMOND, Va. (WWBT) - Virginians may soon pay higher gas and tobacco taxes, but won't have to have an annual vehicle inspection.

Those are just some of the proposals Governor Northam laid out in his $135 billion two-year state budget plan today.

The budget includes a ten percent increase in K-12 education funding, more than $1.1 billion for higher education, and $400 million for Chesapeake Bay clean-up.

Northam suggested several changes to taxes and fees to fund his proposals, including eliminating the required vehicle safety inspection.

“First, we will eliminate vehicle safety inspections, which will save Virginians about $150 million each year. Data show that there is no connection between highway safety and these inspections,” said Northam.

He also wants to cut vehicle registration fees in half, from an average $40 bucks a year to about $20.

But the gas tax would go up four cents a year for three years, from $.22 per gallon to $.34, to fund road improvements and mass transit.

“I think if you ask would you rather sit in traffic all day or would you rather have access to other modes of transportation, such as rail and transit I think the choice is clear,” said Northam.

His budget also proposes $145 million for his G3 plan, “Get Skilled, Get a Job, and Give Back.” It would provide free community college tuition for low-income students in needed fields in exchange for community service.

But Senate Majority Leader Senator Tommy Norment (R-Williamsburg) says he’s not so sure about that idea.

“I’m perplexed. I think it’s a creative idea. I’m just not sure how we’re going to pay for it,” said Norment.

Northam also wants to double the state cigarette tax from $.30 to $.60 a pack, and the tax on tobacco products, such as vaping cartridges, from 10 percent to 20 percent of the manufacturer’s price. He says that revenue would help the state launch its own insurance exchange and reduce insurance premiums.

“By changing it to a state marketplace, we can save Virginians over $50 million and have a lot more control over it,” said Northam.

“In the past the tobacco industry has opposed that for a variety of reasons. But I think the atmosphgeric conditions have changed as it relates to tobacco and in a great deal because of the vaping crisis,” said Norment.

The Governor also wants $7.6 million to implement gun control measures, including universal background checks, a one-gun-a-month limit on purchases, and a “red flag” law allowing judges to order weapons be temporarily confiscated from people found to be a threat to themselves or others.

Northam also called for additional funding for museums, historical sites and highway markers honoring African-American history.

House Majority Leader Todd Gilbert (R-Shenandoah) issued the following statement in response to the proposed budget:

“House Republicans are carefully reviewing the Governor’s two-year budget presented Tuesday. The addition of hundreds of millions of dollars in higher taxes by a Democratic governor is predictable. But going further to repeal a fund specifically designed to bring tax relief to Virginians passed just last year is disappointing.”

“Nonetheless, the Governor’s emphasis on K-12 education is laudable, and House Republicans look forward to working together with the incoming majority to craft a budget that invests in the core functions of government and protects our AAA bond rating. As always, we will bring responsible and conservative ideas to the table, and do everything possible to ensure that taxpayer funds are spent wisely.”

“We look forward to finalizing an on-time, balanced budget that reflects the priorities of our Commonwealth.”

The General Assembly session begins in January. Democrats will have the majority in both the House and Senate.

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