UPDATE: Governor McDonnell has amended the transportation bill which the General Assembly will take back up on April 3. You can read the amended version at this link. In short, the Governor, following the Attorney General’s road map, has put a ticking time bomb in the tax code.
The upshot of Attorney General Ken Cuccinelli’s advisory opinion, as employed by Gov. McDonnell, is that the General Assembly can tax just about anything under the sun and not run afoul of the constitution if the legislation is properly camouflaged.
McDonnell extended the regional taxing authority across the entire state, slightly lowered taxes on hybrid vehicles and the car titling tax as well as adjusting the real estate and hotel tax hikes, which will reduce the new taxes on Virginians to “only” $5.9 billion instead of the original $6.1 billion.
While the amended bill is closer to constitutional, though not entirely so, legal challenges are promised if the General Assembly sends it back to the governor for his signature.
If you have a problem with big government liberalism in Virginia and don’t want $5.9 billion in new taxes – please contact your State Delegate and Senator and tell them NO before its too late.
Article X, Section 1 of Virginia’s constitution requires that all taxes “levied and collected under general laws” be “uniform upon the same class of subjects within the territorial limits of the authority levying the tax.” Article X, Section 4 includes the additional requirement that real estate is subject to “local taxation only” — not a levy imposed by the General Assembly in Richmond.
Virginia’s constitution is clear that the General Assembly can impose only uniform taxes across the state for similar activities. But the bill that emerged from the House-Senate conference committee last weekend upsets the historic balance between localities and state government; it contains new provisions about taxation, some of which would effectively set up a two-tier system for residents in certain parts of the state. It’s difficult to see how some of these provisions could survive legal challenge.
Paul Goldman and Norman Leahy at the Washington Post are referring to the recently passed massive tax increase pushed by Governor McDonnell and passed with the help of a few Republican sell-outs that imposed $6.1 billion in new taxes on Virginia’s citizens, or $1.2 billion per year tax increase.
The bill would raise Virginia’s sales tax on non-food items from 5.0 percent to 5.3 percent statewide. But the bill also says that in areas of Northern Virginia and Hampton Roads, merchants would be required to charge more, bringing the total tax to 6 percent. The revenue from this additional tax is to be spent on transportation projects in those areas.
Then there is the “regional congestion-relief fee,” applicable only in Northern Virginia, that is expected to add $750 to $1,000 to the cost of buying and selling a home in the region. Simply calling a measure a “regional congestion-relief fee” doesn’t change the reality that this is really a tax on real estate. The “fee” is tied to the price of the land — reflecting real estate conditions, the surrounding neighborhood and more. That’s a tax, and the state Supreme Court ruled as much in 2008, when it struck down the General Assembly’s previous attempt to impose a regional congestion fee.
The fourth provision involves a 3 percent tax on hotel and motel bills in Northern Virginia.
There are a number of issues with this legislation, including that the four discriminatory taxes were not part of the original House or Senate bills. This flies in the face of long-standing Virginia practice, dating to the Jefferson Manual on legislative order, that legislation emerging from conference committee must not have surprise elements. Conference committee bills must be voted on, up or down, without amendment; the rule is intended to protect taxpayers from last-minute backroom deals.
Few should know better than Gov. Bob McDonnell (R) that state legislators don’t have the power to impose a discriminatory local tax. He was the state’s attorney general when his office defended before the state Supreme Court the General Assembly’s previous attempt at a transportation tax package. The court rejected the argument.
You might also remember that McDonnell caved on ObamaCare to get needed Democrat votes to pass these new tax increases. “The Medicaid deal called for allowing a panel with 10 legislators to authorize expansion of the federal health-care program for the poor, elderly and disabled if certain reforms were implemented as part of the federal Affordable Care Act. It was a compromise between a House bill, which would have required the entire General Assembly to approve expansion, and a Senate bill, would would have allowed the state health officials to do so.”
Attorney General Ken Cuccinelli has already stated that this deal is illegal “It is my opinion that the General Assembly may not delegate final legislative authority regarding budget or other matters to a committee composed of a subset of members of the General Assembly. To oversee Medicaid reforms as the commission is envisioned to do actions toward that end would require a vote of the entire legislature — at least 51 votes in the 100-member House and 21 in the 40-seat Senate — to comply with the state Constitution.”
McDonnell won election on promises that he would not raise taxes and that he would not set up state Obamacare exchanges. Yet, in one fell swoop, he broke both of those promises, to further his “future” political career.
I find myself in agreement with Erick Erickson at RedState: If you are a conservative, Bob McDonnell thinks you’re an idiot. Instead of standing on principle he caved to what the media calls “leadership” which is really just big government liberalism.
McDonnell sold out his base for sure. I am not certain that applies to his principles. And, considering that he had a few so-called conservative Republicans voting for this massive tax increase, I find myself wondering if he even sold out his party.