Members of the General Assembly are about to start balancing the books for a new budget. They may consider a proposal that could bring more cash flow to localities across the state.
Local governments don't really have a lot of options for raising revenue. There's the property tax, which is the big one. Beyond that, there's the sales tax, the meals tax and the cigarette tax. But not really a lot of flexibility, which is why the Commonwealth Institute is suggesting a new local income tax. Megan Davis is a senior policy analyst at the Commonwealth Institute.
"This could help localities better align their tax code with fairness while generating new and stable revenues for the things their communities care about," says Megan Davis, a senior policy analyst at the Commonwealth Institute." "Like schools, transportation and other local priorities."
The idea is that property taxes might not go up quite as much if local governments could also get a cut of incomes. Steven Haner at the Thomas Jefferson Institute predicts that this will be a very unpopular idea in the General Assembly, even among Democrats.
"Even though you think it's only the rich that pay income taxes, you can make $20,000 a year in Virginia and pay income taxes," Haner says. "As someone whose job it used to be to kill bills like this, it would take me about 10 minutes."
Members of the next General Assembly will be considering this idea along with many others on taxes and spending when they gavel into session in January.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
