Governor unveils ‘progressive’ Virginia budget: Cigarette tax ⬆️ Gas tax ⬆️ State car inspections 🚫

RICHMOND, Va. -- Virginia Governor Ralph Northam called the budget he proposed Tuesday to state lawmakers as "the most progressive in Virginia’s history." And for the first time in recent Virginia history, the commonwealth's Democratic governor will have a statehouse also controlled by Democrats.

"In November, Virginia sent a clear signal about the direction they want our Commonwealth to go. They want us to continue to build a Virginia that is welcoming and respectful of all, and a Virginia that takes care of its citizens when they need help the most," Governor Northam said. "Virginians want us to move this state forward, not back. They want a state where a child is supported in school, where we prepare for climate realities, and where people can afford to see a doctor when they need to."

Highlights of the governor's proposed budget include:

Increasing Virginia's cigarette tax by 30 cents a pack to help fund a new state-run healthcare insurance marketplace for people who aren't covered by an employer

"Smoking is the leading cause of preventable death in Virginia, and it directly causes more than $3 billion in yearly health costs in Virginia," the governor said. "Here in Virginia, we pride ourselves on being a low-tax state. But it makes no sense to cling to the bottom of the rankings for a product that costs us so much."

Increasing Virginia's gas tax 4 cents a year over three years to fund transportation infrastructure improvements

"We rely on motor fuels taxes for many of our transportation dollars. But modern vehicles use less fuel, which means that revenue isn’t keeping pace with the continuing need," the governor said. "We will raise the gas tax 4 cents a year over three years, then tie that revenue stream to inflation."

Eliminating Virginia's vehicle safety inspections

"We will eliminate vehicle safety inspections, which will save Virginians about $150 million each year," he said. "Data show that there is no connection between highway safety and these inspections. That’s why 35 other states don’t have them."

Cutting Virginia's auto registration fee in half

Creating a new tax electronic games of skill (slot machines)

"Our schools rely on our state and local governments to fund them, but we in turn rely in part on the Virginia Lottery, which has for decades provided a funding stream for our schools. But technology moves fast, and in just the last year we have seen a sharp rise in electronic games of skill. As these machines become more popular, our lottery sales have dropped. That takes money away from our schools, and that is not acceptable to me," the governor said. "We’ll impose a tax on these games of skill, and earmark that revenue to boost funding for our public school students."

Education
$35 million each year to extend broadband access to communities that lack it
$145 million to give teachers and support staff a three-percent pay raise, effective July 1, 2021
$99.3 million to hire more school counselors
$95 million in new funding for our early childhood education system
$72.5 million to provide tuition assistance for low and moderate income students
$45.4 million to increase funding for need-based financial aid for Virginia undergraduate students at our public colleges and universities.

Culture
Additional funding for a number of museums, cultural sites, and highway markers that help to better tell the story of African-Americans in Virginia.
Fund our new Director of Diversity, Equity, and Inclusion, so that she has the staff she needs to do this critical work.

Health
$12.8 million in general funds for home visiting services
$3.2 million to extend health coverage for new mothers

Environmental
$733 million in new funding for natural resources priorities
$400 million for water quality projects and programs
$20 million annually for the Virginia Land Conservation Foundation grant program
$40 million to invest in infrastructure improvements at the Port of Virginia, to accommodate offshore wind supply chain needs

"This budget takes care of vulnerable Virginians, invests in long-neglected needs, and puts money away for the inevitable rainy day," the governor said.

Republican State Sen. Tommy Norment (R - James City County) said he could tell the governor was caught up in the season of giving.

"It is apparent that it is Christmas time, and I have decided that it is apparent that Santa Claus Northam is going to have to get a second sleigh to carry all of these presents and goodies he wants to extend to the citizens of the Commonwealth of Virginia."

As the joint meeting of the House and Senate money committees continued following Northam's remarks, multiple Republican lawmakers said what they saw was approaching $500 million in new taxes to help offset the costs of some these new investments.

Northam said their revenue projections were based off a more conservative models than Republican lead money committees were forecasting.  Norment said state lawmakers, who will amend and tweak Northam's proposal during the 2020 General Assembly session, will check the Northam's administration's math on the amount of money Virginia is projected to bring in.

"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," House Majority Leader Todd Gilbert (R-Shenandoah) said. "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."

This is a developing story.

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