Virginia Lawmakers Crank It Up in the Virginia General Assembly 2018, Part 1

After what can only be described as an odd and subdued start to this year’s Virginia General Assembly, legislation is beginning to jell and move along the halls of the Pocohontas Building as lawmakers gather support for their bills.

Just below the capital, this is the building where our elected officials are in temporary residence while their new digs are constructed, a building which incorporates the original facade of a beloved landmark, the old General Assembly Building.

The body opened this month with a slight Republican margin of 51-49 and an inaugural speech by the new Governor. Much of Ralph Northam’s address was about bi-partisanship and working together, but ironically laid out the narrowest liberal agenda in the history of the Commonwealth.

Remember the old adage, “Be careful what you wish for”? Northam’s quiet approach to government intrusion on the lives of everyday Virginians and his plans to put both hands in their pockets may not be such a welcome relief. At least the bombastic McAuliffe conveyed his agenda in a less disarming way, leaving no doubt just what direction the state was headed, and begs the question: Is it better to get shafted with smile or a serene, thoughtful look?

Early on, like a broken record, it’s still all about Medicaid expansion, as if Northam and Virginia Democrat legislators cannot bear to bring themselves up to speed on what’s actually happening with the AHCA. The simple passage of time and its implementation in other states, plus yet another very simple concept called “basic math” should have made this all but a moot point.

We now know that Medicaid expansion will actually, in five years or less, leave many citizens (especially adults) with less or no coverage particularly if they are second time or re-enrollers in Medicaid. That scenario is often the case in this segment of the population as income levels are more likely to rise and fall.

Even Democrat pundits nationwide realize a fix is in order. Click here for a quick, accurate read of what actually happens when states sign on to Medicaid expansion.

The new data on all this is no surprise, locally at least, where we felt the effects of the AHCA from day one of its implementation. Lower-income working citizens and even some considered middle income, especially single mothers who had health insurance (or those who worked two jobs), lost their coverage because of the huge initial hike in price. Opting to accept the penalty for no insurance, these folks have to be near death to even consider visiting a doctor, and the IRS is now making moves to actually collect those penalties. The numbers of these families in this situation are real and not small. Let’s hope the Democrats get a new message and stop recycling the old one.

Look no further though, because newly minted Democratic Delegate Kaye Korey from HD38 in Falls Church is leading from the front, introducing House Bill 152 which would allow Virginians to purchase feminine hygiene products tax free. I know what you’re thinking. I made that up, right? Here’s a link to the bill which was referred to the Finance Committee where no power on earth could make me trade places with anyone there when this one comes up.

As a last word on the healthcare subject, let me suggest the following: instead of the same old tired (and outdated) mantra, and lobbying for and against an expansion program which is flawed and will not help those it was intended to help, how about our legislators take all this energy and pressure to both sides of the aisle in Congress to find a solution? Sounds trite, but imagine every Delegate and Senator from Virginia standing together in the halls of Congress asking for health care reform that actually works and fulfills its promises. Since our federal reps all want to come down here to Virginia at election time and ride everyone’s coattails, our GA might find they have more clout as a body than they think. That’s a story I’d want to cover.

In the meantime, take a look at some legislation that actually seeks to do something constructive for Virginians.

The most interesting bill in the 2018 General Assembly by far is one carried this year by Delegate Glenn Davis. Davis represents part of the City of Virginia Beach in the 84th District. HB 966 offers a solution to a real problem, and even more importantly, bridges the divide between Richmond and local government.

Just about every year some legislator, not necessarily Republican, seeks to be the “business advocate of the GA” and comes up with the novel idea to eliminate the Business Professional and Occupational License, otherwise known as the infamous BPOL Tax.

BPOL is a business tax still used in many localities on gross receipts. Traditionally, Legislator X gives no thought to the fact that its elimination equals an unfunded mandate for localities. When pressed about the effects to local government, the answer often is just short of vapid, something like, “Well, that tax just needs to go away.”

While few in local government would disagree, the fact is, if the tax were eliminated at the GA level, taxes on Virginia citizens would have to be raised to cover the costs of services the GA does not have to consider. Our legislators don’t have to worry their pretty heads about public safety, school buses, and landfill operations.

Broadly speaking, every time the Virginia General Assembly seeks to control everyday operations in unique counties and cities in the Commonwealth by interrupting income streams or the subversion of land use, the average citizen shells out more in taxes or rights, or both. A good example of this “one size fits all” governance occurred two year ago when the GA removed the proffer tool so that citizens, not developers, now pay for the services required in new residential development like schools and public safety.

Please remember, because I hear rubber burning, that residential development is revenue negative. The intake from residential real estate will never ever cover the cost of even one child in a local school system for one year, so the inability to have a developer proffer to offset this expense is a real true handicap.

To understand Davis’ tax reform bill, which is indeed what HB 966 actually is, a video interview with Chris Saxman of Virginia FREE is well worth the listening time. At first glance this looks like just a new tax on services, but the multiple taxes it eliminates could be a real stimulus to business and the creation of jobs. When businesses decide to come to a locality, the net result is an expansion of the tax base, new jobs, and can also create a surplus for things like more money for schools and quality of life for the people of that locality.

Davis makes the case, just as we have seen right here in Caroline, about the changing economy and direction of business in the 21st Century. This year our proposed WalMart was axed, along with 600 stores nationwide, as they seek to be, not a storefront, but an online provider of goods like Amazon.

In another example, the Main Street of our Town of Bowling Green, our county seat, has lost over a dozen retail businesses in the last two years but retains its area service providers which are clearly the future fuel for the economy. You can’t get your hair cut or your heat pump installed or fixed on the internet, right? He makes the case that it’s not if, but when, service taxes come into play.

In talking to Davis directly about HB 966, he said he thought long and hard about how to solve the issue to encourage businesses to locate in those localities which still have BPOL, but not penalize the locality in eliminating a funding source. He had some help from the Thomas Jefferson Institute which has been studying the issue, but the courage to draft tax reform legislation, which is never safe, goes to Davis.

He is the ONLY legislator I have spoken with in the past three years who has given consideration to the localities relationship with Richmond. The initialization of this legislation would essentially put the burden on Richmond with tax code reform offering a tax credit to businesses who pay BPOL, while protecting localities who need that income. This kind of thinking goes a long way to mending the relationship between local government and Richmond. It’s very telling that the measure is supported by strong advocates for local government, the Virginia Municipal League and Virginia Association of Counties.

While the impact statement is not up yet, I will be following HB 966 and its progression as it, hopefully, makes it way through finance. No matter how this bill shakes out, thanks to Delegate Davis for thinking about what actually happens at the local level and its impact. It’s one of the few good faith efforts I have seen in the last few years from the GA that signals to local government that the state does care, and supports and recognizes and appreciates the very diverse localities in the Commonwealth.

If you don’t think the threat to the lines and boundaries of Virginia counties and cities and the seats of small governments as they were historically founded is real, know that every year the GA funds a study, or more than one, and creates a group or two whose findings are the same. Regionalism is the answer, although more often than not its cloaked in how much cheaper it would be to “provide services.”

If you didn’t catch GO Virginia’s efforts last year at Stealth Regionalism check out Part One, Part Two, and Park Three, right here on Bearing Drift.  Recently published on Virginia Business, there’s a better quick recap where business leaders simply tell you on video how much better it would be to divide us into five or six grids although they admit it would be a real political nightmare. Just know that political nightmare wasn’t so insurmountable after all, and has some to fruition in other states.

Stay tuned for more coverage of the Virginia General Assembly. Next up will be legislation from Senator Bryce Reeves and Delegates Freitas, Murphy, Fariss, Head, and Cline, whose bills support and encourage one of Virginia’s newest and brightest “industrial tourism” industries, the growing distillery business.

Don’t know what industrial tourism is? Why that’s an industry where residents and visitors alike are willing to travel for the “cultural experience” to see how food, drink, and other goods are produced in a unique setting specific to the region, and better yet, spend money when they get there. Good stuff for localities. Good stuff for Virginia.