Virginia Governor Kaine Proposes Income Tax Increase, First State Spending Cut

December 18, 2009

Lame duck Virginia Governor Tim Kaine (D) leaves office in a few weeks, turning things over to Republican Bob McDonnell. This year's $37.8 billion budget is a slight increase from last year's $37.0 billion and up even from 2007's $35 billion budget, but Kaine argues that a tax increase is needed to keep up with proposals for spending growth.

(The Washington Post commends Kaine for "reducing budgets by $7 billion" but that seems to be a false assertion. Unless they mean Kaine proposed $13 billion in new spending but only did $6 billion in new spending, and therefore "reduced" spending by $7 billion.)

Yesterday, Kaine floated the idea of reducing $950 million in relief sent to local governments in return for their reducing the car tax, a lightning rod issue in Virginia politics. Today, Kaine suggests that would be coupled with raising income taxes by 1 percentage point and dedicating the money to local governments, beginning in 2011.

Kaine's budget for 2011 would be $37.3 billion, a 1.3% reduction from this year, and for 2012 would be $37.8 billion, the same as this year. The budget numbers assume the state's revenues rebound significantly in 2011 and 2012, although it's unclear as to whether they account for the car tax/income tax change or not.

Get Email Updates from the Tax Foundation

We will never sell or share your information with third parties.

Follow Us

About the Tax Policy Blog

Subscribe to Tax Foundation - Tax Foundation's Tax Policy Blog The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.

Monthly Archive