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Breaking News: A Budget Compromise

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The following is from Del. Paul Krizek (D-Fairfax) on the budget bill. I’m not sure what to think of this yet…

The big news today is the announcement that we, Democrats and Republicans, Senate and House, and the Administration, have come to an agreement on a tax deal that will benefit ALL hardworking Virginians, and not just those at the highest income levels. Indeed, every Virginian who pays personal income taxes will see lower taxes under this compromise plan. As a member of the House Appropriations Committee, I am especially pleased that coupled with the budget which I voted for earlier in the week, we are investing in our Commonwealth in important ways like through teacher raises and more school counselors, benefiting more than 4 million Virginia taxpayers, all the while maintaining our AAA bond rating.

First, it is important to note that this bill will provide conformity with the new federal tax law. Without conformity, Virginia would have needed to make significant changes to our financial systems causing confusion and delays. This was something that the Democrats insisted upon. Now, Virginians will be able to file their taxes in a timely manner. It is important that we have certainty this tax season as we file our returns.

The only part of our tax structure where we deconformed from the federal law, was to reject the $10,000 cap on the State and Local Tax Deduction (known as “SALT”) but cap total deductions at $313,000 (saving $80 million which can help to fund some excellent programs like the Housing Trust Fund). Deconforming from the federal cap will allow taxpayers to continue receiving those higher mortgage interest deductions. Additionally, and significantly for lower income taxpayers, the standard deduction has been increased. For single filers, it will be increased 50% from $3,000 to $4,500 and for joint filers it will be increased from $6,000 to $9,000. These deductions will put money back into the taxpayers pockets’ to save and spend back into the Virginia economy. And in October we will be sending every taxpayer a check for $110 or $220 for joint filers.

I am especially proud of our House conferees, Delegates Luke Torian and Mark Sickles, and our Finance Committee ranking member Vivian Watts, for negotiating on our behalf, and the hard work of Minority Leader Eileen Filler-Corn to come to this compromise with our Republican colleagues. Even during these tumultuous times this proves that we can put aside our differences to work for the betterment of all Virginians. We continue to govern responsibly and fairly here in Richmond and I am humbled by your support. It is an honor to represent you in the 44th district of Virginia.