The monster inside the local income tax bill

When I first made note that the Senate had approved adding Portsmouth to the list of localities that would be given the power to impose a local income tax, I made a mistake: I took the legislative summary posted on the General Assembly’s LIS page to be an accurate description of what the bill would do.

Thanks to the indomitable Tim Wise, I now see that summary is not just misleading, but downright wrong.

Yes, the bill, SB1313, would give Portsmouth the power to impose a local income tax. It would remove the existing requirement that the tax would have to first be approved in a referendum. It also removes the sunset provision for any such tax.

But upon looking at the bill language, rather than the LIS summary, I discover that Sen. Stosch removed the referendum/sunset provision for all localities that have been granted the income tax power. He also removed the provision that monies raised from these taxes be used exclusively for transportation.

What this means is that Senate Republicans, with ample Democratic backing, have given Arlington, Fairfax, Loundoun and Prince William counties, and the cities of Alexandria, Fairfax, Manassas, Manassas Park, Norfolk and Virginia Beach the right to pass their own income tax ordinances whenever they choose and use the money for whatever purpose they wish.

The tax can be no higher than one percent, but would have to apply equally to individuals, trusts and corporations.

If this all sounds somewhat familiar, it should: on his way out the door, then-Gov. Tim Kaine proposed that local governments that did not want to go along with a full return of the car tax could, instead, opt for a one percent local income tax.

Here’s hoping the House of Delegates decides to kill this bill.

And here’s wondering why so many Senate Republicans (including one or two self-described “conservatives”) were so eager to implement, if only in part, Tim Kaine’s final budget plan.

  • Dan

    Never simply rely on the LIS summary. They’re extremely unreliable.

  • I have asked myself the exact same question, because Fairfax was included in the list and given our 3-1 ratio of Democrats to Republicans, a tax increase is pretty likely if they get this power unchecked by the voters. I’m glad Chap Petersen, at least, voted against it. I have to give him credit for that.

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