The Governor presented his budget amendments over the weekend, and while the focus was largely on the changes to who makes the appointments to the industrial-policy-writ-small board knonw as “GO Virginia,” there was no mention that McAuliffe had chosen to accept the General Assembly’s removal [1] of his proposed corporate tax slice (from 6% to 5.75%).
On one level, that’s not a surprise: the Governor had used the proposed tax cut as a sweetener for Medicaid expansion, which Republicans oppose on fiscal grounds (and should also oppose on policy – as Medicaid largely cuts off poor Americans from the actual health care market). When the GA dropped the cut, I was still upset. The notion that a mere $64 million could not be found to match the Governor’s tax reduction was and is silly.
Still, one has to press advantages in order to maintain them, and the Governor did no such thing. By not even mentioning the tax cut (not even a press release), he is allowing the discussion to shift to GO VA, leaving everything else for the memory hole. Meanwhile, any attempt to bring back the tax cut as a political issue now will get him as many questions about how much really wanted one in the first place.
In short, no one covered themselves wiith glory here – although the Republicans in Richmond have the benefit of consistency. More importantly, however, an opportunity to lower taxes in Virginia (there have been no tax cuts in the Commonwealth this century) has passed Richmond by. That might not matter to folks in Northern Virginia (where the competition is high-tax Maryland), but here in Hampton Roads (where next door, in North Carolina, they’ve dropped the rate to 5%), it’s a concern.