The Budget
The State Budget is projected to have a shortfall of $4.5 billion for the 2010-2012 biennium1. The Great Recession has not only increased the needs of struggling Virginia families, but has lessened the state’s ability to help. We’ve already cut $6-7 billion over the past two years.
Cuts Alone Risk Families & Future
If we try to close this large budget gap exclusively through cuts, we put both Virginia’s families and future at risk. By cutting spending, the state will have to lay off workers and cancel contracts with vendors- actions that make our economic challenges even worse. This problem is too big to solve with cuts alone. What we need to do is take a balanced approach to balancing the budget.
Unaudited Corporate Tax Breaks Drain Resources
Unfortunately, we have been slashing support for low- and moderate- income Virginians while giving away lavish tax breaks to Virginia’s biggest, richest corporations. Last year, at the 2009 legislative session, the Virginia General Assembly, during a very tough budget year, passed a $55 million a year tax break to some of Virginia’s biggest, richest manufacturing corporations through a technical change to the state’s corporate income tax. There is absolutely no research showing that this policy creates jobs. Of the three states that had net gains in manufacturing jobs between December 2001 and December 2007, not one operated under the giveaway scheme passed in Virginia.
Another giveaway is the dealer discount program, which allows retailers to keep a piece of the sales tax they collect from consumers. Each year, about $64.3 million is skimmed off of the sales tax. The vast majority of benefits go to a very limited number of large businesses. For example, Wal-Mart alone receives more than $4 million.
People Before Profits
The only thing these misguided and immoral tax policies do, are further bleed revenue from away from education, health care, and other services that all Virginians rely on. We must reject these immoral policies that funnel money from the poor to the rich and make sure we prioritize taking care of people before corporate profits. Virginia’s low- and moderate- income residents should be prioritized before Virginia’s biggest, richest corporations. To do that, we need to analyze the cost of these tax expenditures and discuss whether the public benefit merits the expense. SJ 21 and HB 355 would create greater government transparency and accountability, and would inform discussion about our priorities as a commonwealth.
