Last year, Republicans in the General Assembly continued their altruistic spay and neuter program targeting local governments. Instead of addressing spending and taxation in the Commonwealth, Republicans in Richmond look to save taxpayers money by disabling counties from generating revenue.
Your counties pay your police, your firemen, your teachers, your schools, and invest in infrastructure aimed at creating higher paying jobs. The Commonwealth, however, seems to have decided that these services aren’t important to most Virginians, who would rather see schools and police stations in shambles than see any revenue interruptions in Richmond.
State Senator Amanda Chase, whom I very much appreciate, has – on behalf of local businesses – proposed SB 836.
A bill to reduce local revenue collections is among a growing list of pre-filed legislation to be considered in the upcoming General Assembly session. SB 836 (Chase) requires that a locality tax businesses based on “Virginia taxable income” rather than “gross receipts,” which is the current practice. Such a mandate would have a significant fiscal impact on the 48 counties that employ the Business Professional Operating License (BPOL) tax. VACO
Now, it’s one thing to cut taxes at the State level.
I, and millions of other Virginians in the Commonwealth, would greatly appreciate lower State income taxes. However, as a devout attendee of my local Board of Supervisors and a citizen-supervisor of county income and expenditures, I can tell you how hard our Caroline County Supervisors, staff, and county employees work to ensure low taxes and quality services. County departments frequently come in under budget in order to save money for local taxpayers, investing that money in cash for infrastructure investments.
This legislation, however, will make it harder for Caroline County to raise revenue.
A technical report by Virginia’s Join Legislative Audit Review Commission (JLARC) in 2013 found that changing the basis of the BPOL tax from gross receipts to income (when compared to actual 2012 collections) would reduce local revenue from the tax by approximately 95 percent. The report also concluded that such a change “… would make the tax more difficult for businesses to understand and comply with, and would require more resources for local governments to administer.”
There is nothing admirable about cutting the taxes of other governments, especially when those governments are responsible for providing most of the real services citizens of the Commonwealth enjoy on a daily basis. This legislation is akin to the Federal Government passing legislation banning sales taxes in the 50 States.
I am not personally a fan of BPOL taxes. I believe they unfairly target small business operators. However, in rural counties, the vast majority of businesses are, in fact, small business operators. These decisions should be left up to county citizens, not imposed upon them by Richmond.
What’s really going on here? Republicans in Richmond want to campaign on cutting taxes, only, they don’t want to cut their own taxes. Businesses looking to avoid (often unfair) BPOL taxes, who aren’t having luck repealing those taxes at the local level, go to representatives in Richmond and ask them to strong-arm localities. That’s exactly what this legislation does.
Think this is a tax cut that will help small businesses? Think again. Counties will have to raise revenue some other way and Richmond continues to decrease local options. So, if SB 836 passes, get ready for increases in property, sales, and (if you live in towns or cities) excise taxes. When the Commonwealth attacks a locality’s ability to raise revenue in one area, the county is forced to increase taxes in another area or to reduce services overall.
I understand exactly why Senator Chase has introduced this legislation. It’s a crappy tax. However, it is not Richmond’s job (Yes, I get we’re a Dillon Rule State) to make this decision. This decision should be up to the local electorates and their duly elected representatives. I trust my Caroline County Board of Supervisors to make the right decisions. Now, if you don’t trust your local county Board of Supervisors, then my suggestion is that you replace them. Don’t go crying to your Delegate or State Senator asking them to do the job your Supervisors seem disinclined to do.
SB 836 is a tax on property owners. Plain and simple. This legislation has been referred to the Committee on Finance.
In particular, I would like to see a Nay vote from Senator Jill Vogel, Senator Ryan McDougle, Senator Siobhan Dunnavant, Senator Frank Wagner, and Senator Mark Obenshain.