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Cox calls for returning $730 million in extra revenues to Virginians as tax rebate

Cox calls for returning $730 million in extra revenues to Virginians as tax rebate

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Del. Kirk Cox, R-Colonial Heights, claimed a re-election victory for his House seat on Nov. 5, 2019.

Del. Kirk Cox, R-Colonial Heights, said Tuesday that the state should use around $730 million in additional projected revenues to cut checks for Virginians to the tune of $190 for individuals and $380 for families.

Cox, who is seeking the Republican nomination for governor, pitched the proposal as a way to shore up Virginia families struggling as a result of the pandemic.

“This plan takes the $730 million that the reforecast came down with, and does a straight tax rebate. The feeling is that families have really struggled — no question about that — and this would help them with what they need to do. That could be an electric bill, clothes for kids, tutoring expenses,” Cox said in an interview.

Cox titled his pitch “give it back,” recalling the checks that went out to Virginians in 2019 after the state saw a revenue windfall tied to federal tax reform. Cox was the speaker of the House at the time. Republicans are now in the minority in the House and the Senate.

Asked who would be eligible to receive the checks, Cox said he would defer the details to the legislature’s budget leaders. Right now, the House and Senate are getting ready to reconcile their separate budget proposals.

“This gives the General Assembly leaders time to work out the details. We can work out exactly what those parameters are,” Cox said.

Cox is seeking the GOP nomination in a crowded contest that includes state Sen. Amanda Chase, R-Chesterfield; former Pentagon official Sergio De La Peña; entrepreneur Pete Snyder; former Carlyle Group CEO Glenn Youngkin; and Peter Doran, former head of a Washington think tank.

The politics of Cox’s rebate proposal was not lost on anyone, from Gov. Ralph Northam to the leaders of the General Assembly money committees.

“That sounds like somebody is running for governor,” House Appropriations Chairman Luke Torian, D-Prince William, said Tuesday.

Torian said the House budget, adopted Friday, does not reflect the additional $730.2 million that Northam identified for the budget at the beginning of this week. However, Torian said the additional revenue would be “quite beneficial” in helping House and Senate budget negotiators settle their differences on key issues, including raises for teachers and state employees, and additional deposits in Virginia’s reserve funds.

“I think it bodes well for the decisions we made prior to the mid-session reforecast,” he said.

Cox, a retired teacher and a member of the House Appropriations Committee, voted against the House budget, which includes a 5% raise for teachers and a 3.5% increase for state and state-supported local employees, such as sheriff’s deputies.

The Senate budget proposed increases of 3% for teachers, state employees and other state-supported local employees, who lost raises that had been included in the two-year budget that the assembly adopted on March 12. That was the same day the governor declared a public health emergency because of the COVID-19 pandemic.

“The COVID pandemic chopped nearly $3 billion off Virginia’s budget, and the latest positive news is really about climbing out of that hole,” Northam spokeswoman Alena Yarmosky said. “This campaign proposal would mean less money for small businesses, public health, vaccinators, teachers, police officers, state troopers, and everyone who’s working so hard to get us past this pandemic.”

“Virginians get that — they understand there’s an election this fall, and what’s going on here,” Yarmosky said.

The additional money, combined with higher revenues forecast in the budget that Northam introduced before Christmas, would restore almost $2 billion of the $2.7 million in revenues the governor and General Assembly removed from the budget adopted in special session last fall.

More than half of the additional revenues Northam identified on Monday, about $410 million, represents “cash in the bank” in the current fiscal year that the administration wants spent on one-time expenses.

The remaining $320 million will come from higher revenue forecasts in the second year of the budget, beginning on July 1, primarily from sales tax collections that have been better than expected because Virginia now taxes internet sales.

The governor also increased the forecast for revenues from taxes on corporate income and deeds, wills and other court filings. He did not change the forecast for individual income taxes, which represent about 70% of all revenues for the state general fund to pay for core government services.

In contrast, the tax windfall in 2019 that Cox cites in his proposal represented additional income taxes that Virginia would receive as a consequence of changes made to federal tax code in the Tax Cuts and Jobs Act that President Donald Trump signed at the end of 2017.

The General Assembly adopted a package of changes in 2019 that included one-time checks of $110 for individual taxpayers and $220 for couples, but only if they had paid at least that amount in state income tax.

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Staff writer Michael Martz contributed to this report.


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