RICHMOND, Va. — Governor Glenn Youngkin referred to Virginia's car tax as the "most hated tax" since the tea tax in Massachusetts, which led to the Boston Tea Party.
During his presentation to lawmakers of proposed amendments to the state budget Wednesday, the governor acknowledged that eliminating the car tax during the shortened 2025 General Assembly session is unlikely (sessions last 60 days during even-numbered years and 30 days during odd-numbered years, although lawmakers can vote to extend it to 45).
However, he expressed more optimism about providing tax relief to an estimated 1.9 million Virginians through a proposed tax credit program.
“If you earn as a single filer, less than $50,000 or as a dual filer, less than $100,000 you can get $150 for the $50,000 or up to $300 for the $100,000, and that will pay a typical Virginia family of four's car tax,” he said.
Youngkin proposed $1.1 billion to fund this program for three years, after which it would cost around $360 million annually.
He also expressed a desire to prevent Virginia cities and counties from using the car tax as a financial resource, stating, “We’ve included in our amendment a cap on the annual increase in the rate of the car tax. I think what's happened is that localities have forgotten that it's actually the people's money.”
In addition to addressing the car tax, the governor presented various proposals aimed at leveraging a budget surplus in the billions.
Several of these included announcements he has made in the days leading up to his presentation. This includes eliminating the tax on tips for the service industry, address rural and maternal health care, and withholding funding from localities and law enforcement agencies that do not comply with Immigrations and Customs Enforcement (ICE) detainers.
Youngkin said he is also proposing an additional $1-billion towards schools in areas like construction, support for at-risk schools, and a $50 million scholarship program designed to help low-income students attend private schools.
“This scholarship program funded by our revenue growth and not from a single penny of existing educational funding would serve 10,000 Virginians,” he said.
Furthermore, Youngkin proposed an extra $50 million to assist Richmond in rehabilitating its combined sewer overflow system.
The governor's proposals are now under consideration by the General Assembly, which is controlled by Democrats.
Del. Luke Torian (D - Prince William) commented, "We'll go over the Governor's presentation, and we'll see what is applicable, what we can do, what we can't do. We're just pleased that we have a surplus that we can address some one-time spending and address some of the needs that we've seen throughout the Commonwealth."
Last year, budget negotiations were marked by a lengthy battle between Democrats and Republicans, characterized by competing press conferences.
However, Torian noted a change in tone this year, highlighting Youngkin's optimistic approach during the presentation.
“He recognized that it's a collaborative effort to put together the budget, and so we will go forward with that intention in mind,” Torian said.
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