Help with tuition and affordable housing are Gov. Ralph Northam’s latest state spending commitments as he prepares to unveil his proposed budget on Tuesday amid an already loud chorus of opposition from Republicans set on tax reforms.
Northam announced the twin initiatives of about $21 million each for affordable tuition and housing on Monday at the L. Douglas Wilder School of Government and Public Affairs at Virginia Commonwealth University, with the school’s namesake, the former governor, sitting in the front row.
The setting was apt at a school that has pioneered efforts to address social inequities in eviction rates in Richmond and other Virginia cities, but also at a university that raised tuition by 6.4 percent for in-state undergraduate students in this school year.
The governor said he will propose budget language that would require colleges and universities to produce “tuition predictability plans” covering at least three years for in-state undergraduates.
“These may not seem like they’re related, but if you’re a middle-class family trying to pay for rent and tuition, you’ll see what they have in common,” Northam told the audience, with Lt. Gov. Justin Fairfax and members of his Cabinet standing next to him.
The governor will face a much tougher audience on Tuesday morning, when he will address the General Assembly’s money committees and their Republican leaders.
They say Northam has embarked on a spending spree, beginning with a plan to give $250 million in unused tax credits to lower-income families. They say Northam’s plan is built on the boomerang of federal tax reforms that unintentionally will raise taxes on the middle class.
Under current Virginia law, taxpayers can’t itemize deductions at the state level if they don’t on their federal returns.
The cost of the governor’s commitments — in K-12 education, environmental conservation, school safety and expanded broadband access, in addition to Tuesday’s announcements and his proposed earned income tax credit refund — approaches $800 million, a figure Republicans say would exceed $1.6 billion extended beyond this biennium.
“They appear to be doing it in the vacuum of tax policy discussions,” House Appropriations Committee Chairman Chris Jones, R-Suffolk, said Monday.
Jones and other Republicans want to roll back inadvertent state tax increases on middle-class households caused by the Tax Cuts and Jobs Act, which President Donald Trump signed a year ago.
The Northam administration estimates additional income tax revenue of $594 million this year and $611 million the next, most of it from provisions of the federal law for individual taxpayers that are scheduled to expire after 2024.
Northam insisted on Monday that his proposed budget would be “structurally balanced,” meaning it would not rely on one-time revenues to pay for recurring expenses.
The governor also said he is open to ideas from legislators about tax policy, beyond his proposal to refund the unused portion of the earned income tax credit to families earning less than $54,000 a year, who receive the least benefit from federal tax reforms.
“A lot of these things will be on the table for discussion,” he said after his announcement at VCU.
The newest initiatives would spend:
- $15.5 million to fully fund financial aid, based on need, for students at public colleges and universities;
- $5.2 million for tuition assistance grants for students at private institutions;
- $19 million for the Virginia House Trust Fund to encourage development of affordable housing; and
- $2.6 million to pay attorneys to help Virginians under threat of eviction.
Northam also promised to create a full-time state position to develop ways to reduce eviction rates, which are among the highest in the country in Richmond and four other Virginia cities.
VCU has created the RVA Eviction Lab within the Wilder School to develop data about eviction and its causes in Virginia cities to help with a state campaign led by the Virginia Poverty Law Center to reduce eviction rates here.
Northam’s announcement “thrilled” the lieutenant governor, who conducted roundtables in Richmond and other cities in the state on reducing high eviction rates and the high cost of housing.
“I look forward to working with the governor and the General Assembly in the 2019 session to reduce evictions, increase affordable housing, and create more economic security and opportunity and a brighter future for all Virginians,” Fairfax said in a written statement.
Northam said efforts to reduce eviction would “benefit both landlords and tenants, because in the end, everyone loses when families are evicted from their homes.”