Updated 4:51 p.m. to add information about gas tax holiday bill.
RICHMOND – Lawmakers returned to Richmond Monday for a special session to work out their differences on the state’s budget by the July 1 deadline. But despite the weight of their task ahead – closing the $3 billion gap that still separates the spending bills of both parties – they did little more than pass two joint procedural resolutions governing the special session.
Gov. Glenn Youngkin, eager to make good on his campaign promise of giving Virginians tax relief, did not wait and sent legislation to the General Assembly to suspend Virginia’s gas tax for three months – a proposal that he began floating last month in the wake of increasing oil prices. The legislation, which is sponsored by state Sen. Steve Newman, R-Lynchburg, and Del. Tara Durant, R-Stafford County, seeks to eliminate Virginia’s 26-cent gas tax for 90 days and then phase it back in by the end of the summer.
If the legislature approves the measure, it would take effect immediately. Youngkin’s proposal would also cap the annual adjustment to the gas tax at no more than 2% per year to further protect Virginians from what Youngkin called a hidden tax increase of inflation.
“Virginians need tax relief and it’s time for the General Assembly to act on the multiple tax relief proposals. With gas prices and inflation squeezing families’ pocket books across Virginia and the nation and with over $1 billion in unanticipated revenue in our transportation fund, the general assembly must act now,” Youngkin said in a statement. “Virginia should join numerous other states, led by both Republicans and Democrats, in temporarily suspending the gas tax. Actions speak louder than words, we can lower gas prices now for all Virginians.”
Earlier in the day, before voting on its joint procedural resolution, the Senate briefly considered a floor substitute by Sen. Scott Surovell, D-Fairfax County, seeking to limit the purpose of the special session to the work on budget matters and legislation that had been carried over – a move that Republicans interpreted as an attempt by Democrats to block a floor vote on the gas tax holiday proposed by Youngkin. “Special sessions are normally very narrowly focused on issues that we as a body decide we are going to consider and not completely open end it where the governor decides,” Surovell said, without mentioning the proposed gas tax holiday.
Surovell argued that under the Virginia Constitution, the governor can file legislation, but it is up to the legislature to act on it. “It’s up to us to decide what we want to consider in a special session, it’s not the governor, and that’s been the prerogative of our chambers since forever, and I think it’s important that we protect that prerogative in the future,” he said. “My understanding is that when we agreed to go into the special (session), we were going to focus only on the budget and carry-over bills. This language is basically an open invitation to make this special session about anything that the governor feels like, and that’s a dangerous precedent.”
But Sen. Ryan McDougle, R-Hanover County, said that Surovell’s substitute was a veiled attempt at keeping Democrats from having to record their vote on the gas tax holiday. “I think this is very clear, what this means is that there will be no vote in the Senate on suspending the gas tax, that’s what this is about,” McDougle said. “This is about whether people in Virginia are going to have to continue to pay more for gas in the upcoming months. We might have different views on that, and it might not be able to pass the Senate, but this would prevent the governor not from sending down a bill but the Senate from taking up the bill and having the vote being cast on that bill.”
However, Surovell decided to withdraw his substitute following some confusion within his own caucus on whether his measure would have any effect at all. “The governor at any time we are in session can send down bills, so it’s like saying Tuesday follows Monday, whether or not we have it in there, it’s going to happen,” said Senate Majority Leader Dick Saslaw, D-Faifax County. “As a result, taking that out doesn’t change one thing.”
Youngkin’s move poses a dilemma for both Republicans and Democrats already entrenched in a budget stalemate, said Stephen J. Farnsworth, a political scientist at the University of Mary Washington. “The governor’s national political fortunes and credibility for the rest of his term depend on winning in year one, and the credibility of the Democratic majority in the Senate in terms of telling the governor that he has to work with them also depends on a win in year one. Both sides show little interest in compromise and that’s why we are where we are,” Farnsworth said.
Both sides will see their virtue in waiting, Farnsworth added. “If global oil prices fall, maybe there won’t need to be much of a gas tax reduction, or if public frustration over gas prices increase, maybe the governor has a stronger hand to play two weeks from now. I imagine there will be some movement by the end of the month, if not before. But that is going to require people working together in a way that hasn’t been evident in this session.”
But Del. Barry Knight, R-Virginia Beach, the chairman of the House Appropriations Committee, said that “the budget negotiations are ongoing” and that conferees would meet later Monday on the 13th floor of the Pocahontas State Office Building in Richmond’s Capitol Square. “We are talking to them a little bit, back and forth, they are kind of taking their time, and we are ready to meet at any time when they are,” Knight said in an announcement on the House floor. “We’re not sure if we will get together this afternoon, but we certainly anticipate getting together later this week or next week. We are not as far apart as you might read in the paper, we are talking about returning some money to the citizens.”
Tax cuts remain the sticking point for the budget conferees. Youngkin wants to see his $5.5 billion package of proposed cuts be adopted by the General Assembly, but Democrats, who still have the majority in the state Senate, are not looking eye to eye with Republicans who, for example, want to eliminate the 2.5% tax on groceries and essential personal hygiene products, which passed the Republican-controlled House of Delegates by a 80-20 vote in February. While Republicans want to repeal the entire tax, Democrats want to retain the 1% portion that benefits local governments to fund schools.
Knight said that despite their differences, negotiators from both parties agree on more issues than not. “The Senate has some spending proposals, and some of them are good and we agree with them, and we have some proposals on the tax policy side that they actually agree with. We will come to a compromise, it’s just a matter of how long this is going to take,” Knight said. “Now we need to get in the room, lock the door and see what we can do about coming to a compromise.”