Fmr. Gov. Bob McDonnell — GUILTY on 11 counts of public corruption. Sentencing scheduled for January 6, 2015.
With Ben Chafin’s election, it is now official. After seven months, the Republicans have a majority in the Virginia Senate once more. As one would expect, a number of my friends are crowing.
Unfortunately for me, recent political history is screaming in my ears. It makes my optimism about a fully Republican-controlled Virginia legislature extremely cautious.
For those unaware, the Republican Party first had a State Senate “majority” in 1998 (although the 21st vote was actually the Lieutenant Governor); they held it for ten years. This is the record of that decade…
- Holding up budget amendments in an attempt to reverse the progress of the Gilmore car-tax cut (2001)
- A referendum in Hampton Roads and Northern Virginia for tax increases (2002 – thankfully rejected by the voters)
- A proposed tax increase that was twice what Mark Warner wanted (2004)
- A proposed gas tax increase (2006)
- A proposed statewide tax increase in response to the HB3202 debacle (2007)
- Enacting HB3202 anyway (2007)
Somehow, the party was shocked – shocked! - when voters showed them the door and returned the State Senate to the Democrats in November 2007 (on a night when those without a tax-stained record did quite well, thank you very much).
Four years later, after Governor Bob McDonnell won a landslide victory by promising not to raise taxes, the GOP managed another 20-20 split. Once again, the Lieutenant Governor give them control…and within a fifteen months, the Republican-controlled State Senate passed a McDonnell-proposed tax hike (known in this corner as Plan ’13 From Outer Space). The nominee to replace McDonnell – Ken Cuccinelli – tried to defend and oppose it at the same time.
Somehow, the party was shocked – shocked! - when voters showed the 2013 GOP ticket the door, which also put the State Senate back into the hands of the Democrats in January.
Now, Republicans have the 21st vote once more.
I sincerely hope that the party has learned its lesson…and not f*ck it up with yet another tax hike that reminds the voters why they took power away from them, repeatedly.
Cross-posted to the right-wing liberal
During the opening arguments in the trial of former Gov. Bob McDonnell and his wife Maureen, it was disclosed (or at least claimed by the defense) that the McDonnells were barely on speaking terms and she had an “inappropriate” relationship with businessman Jonnie Williams who showered the first couple with lavish gifts. OUCH!!!
At first blush, it appeared that they would be throwing each other under the bus, but now it looks to me more like Maureen McDonnell is falling on her own sword — or at least being pushed onto it.
Just wait until it is disclosed Bob had a crush on Jonnie, too. Well, at least Jonnie’s wallet.
Or maybe Bob McDonnell was just happy to have Jonnie get Maureen off his back? As in – Take my wife . . . Please!
I don’t get no respect!
Maureen is being painted more and more as an airhead former Redskinette. I do not think it’s unintentional, but rather part of the former first couple’s trial strategy — portray her as estranged from the Governor (who was busy working 16 hours a day for the people to the neglect of his own wife) so there’s distance from his official actions; write-off all the gifts as being part of the “inappropriate” relationship (still not defined as whether it was an unrequited “crush” or something physical) between her and Williams instead of any quid pro quo; get off (with maybe a fine for the failure to report on the banking issues); and finally “reconcile” at some point following the trial.
This whole sordid chapter in Virginia’s history makes me sick. McDonnell was supposed to save the Virginia GOP. Instead, he sundered it — for bad policy and for corruption.
Do let the door hit you in the ass on the way out. Bye! Don’t come back, y’all, ya hear?
Those two did more damage to the party, and by extension the rest of the state, than we can tally. We have two blue senators, executives and frankly, this just should not be.
We have taxes galore.
I have no sympathy.
I hope Bolling gets splattered with all the toxins, too.
I hope it is so bad, McDonnell has to get a dye job, grow a beard and go into hiding.
I remember reading an article in 2009 about how the McDonnell-Bolling team was the Establishment’s Last Stand. That may just turn out to be right.
This is a clear message from Gov. Bob McDonnell to Establishment Republicans – get out and vote for the entire GOP ticket tomorrow. These nominees may not have been the ones that you would have preferred, but they are head and shoulders better than the Democrat alternatives. Don’t make Virginia suffer for four years out of spite. Politics is a two-way street and conservatives back our nominees regardless of whether that is who they supported in the nomination. The Establishment must return the favor now that it is their turn.
Tomorrow, voters all across Virginia will head to the polls to cast their ballots in the 2013 election. The stakes could not be higher and today I’m asking you to please vote for our Republican ticket.
Four years ago today I was standing at the State Capitol talking to the press about our historic sweep that had occurred the night before. Thanks to your support, help and hard work we received the most votes of any candidate for governor in Virginia history. We won localities from Fairfax to Buchanan. And with that strong support, we got to work.
Together with Lieutenant Governor Bill Bolling and our next governor, Attorney General Ken Cuccinelli, we set about putting in place common-sense conservative policies that would get positive results for our people. Here’s what Republican leadership has achieved:
- Over the last four years over 167,000 net new jobs have been created in Virginia
- The state unemployment rate has fallen from 7.4 percent to 5.8 percent today; the lowest unemployment rate in the Southeast and the 3rd-lowest east of the Mississippi
- We’ve posted four straight budget surpluses totaling nearly 2 billion dollars. That’s the first time a Virginia administration has put up four consecutive surpluses since the administration of Governor George Allen in the 1990’s
- We passed Virginia’s first major transportation funding plan since 1986, finally addressing a challenge that had been impeding economic growth and hurting our citizens’ quality of life for nearly 30 years
- We made college more affordable and accessible, adding 14,000 new slots for undergraduate students and seeing the lowest average yearly tuition increases in a decade
- We reduced the unfunded liabilities in our pension system by 9 billion dollars
- We put in place new innovative programs and policies in our K-12 system to give students, parents and teachers more resources, accountability and choice
- And just a month ago, Forbes.com named Virginia “America’s Best State for Business.”
THAT is what Republican leadership looks like!
More Virginians are working. Our economy is stronger. Transportation and education are well funded. Virginia is on the right track.
Now, we need to keep that progress going by electing Ken Cuccinelli, E.W. Jackson and Mark Obenshain!
Republican leadership has gotten results. Tomorrow, let’s keep building this “Commonwealth of Opportunity” by electing our great Republican ticket to lead Virginia forward for four more years.
Governor of Virginia
P.S: if you get this email and you happen to live in New Jersey, I hope you’ll vote tomorrow for my friend, and the Garden State’s great governor, Chris Christie!
Just a heads-up. When you hear that “giant sucking sound” of jobs leaving Virginia for points south, now you’ll know why.
Republican legislators in North Carolina have unveiled a plan to completely eliminate the state’s income tax, to be replaced with a consumption tax. This pro-growth measure, designed to place North Carolina squarely in the same league as jobs-creating giant Texas, has the support of the state’s Republican leaders and comes on the heels of last year’s across the board cuts in corporate and personal income taxes.
Imagine. Pro-growth, pro-taxpayer Republicans.
By contrast, Republican leaders in Virginia, led by Gov. McDonnell, argued that the largest tax increase in the state’s history passed earlier this year was absolutely necessary for economic growth. People other than Republican leaders, such as Bill Bolling, even went so far as to argue the economic benefits of expansion of Medicaid under Obamacare, provisions for which were included in this year’s Virginia budget.
So, now we watch and wait to see the natural experiment in action. Who will have better economic growth? Which state will create more jobs and opportunities? I suppose we’re fixing to see. But Detroit-style economics (characterized by higher taxes and greater “investment” of other people’s money) has never worked wherever it has been tried. Texas economics (low taxes, less regulation) works every time.
But at least we’ll get to ride Amtrak to Roanoke. We still got that going for us.
Cross-posted to The Bull Elephant
According to a new PPP poll in Virginia the Governor’s approval ratings have dropped 12% in the last month. For the first time his disapproval percentage is higher than his approval percentage, 46% of those polled disapprove of the job he’s doing as Governor while only 36% approve. That’s a 30% drop in approval ratings from just a few months ago. At one point McDonnell had the highest approval rating of any Governor in the US, close to 70%! The Governor’s current favorability numbers are even worse with only 32% viewing him positively while 46% view him negatively. Only 31% view him as an ethical politician while 45% do not.
The good news for the Governor, ‘only’ 35% of the people think that he should resign while 45% believe he should remain in office.
This report also says “McDonnell’s issues could be a liability for the Republican ticket this fall as 31% of voters say they’d be less likely to vote for a candidate backed by him to only 15% that say they’d be more likely to support someone based on his blessing. Among independent voters it’s 29% less likely and 13% more likely.
Tomorrow PPP will release their latest polling on the Virginia races.
The DailyBeast covers how McDonnell’s troubles may effect our candidates in the fall, quoting Tom and Jeannemarie Davis.
So says the well connected Mike Belefski. Mike was the Northern Virginia Field Director for Bill Bolling during his run for Governor. Much more about Mike on Google. Mike has posted today on his Twitter account and on his Facebook page that Governor McDonnell will resign on Monday.
Bill Bolling’s lifelong dream to become Governor is about to come true. It also appears that Willie Deutsch was right.
UPDATE: More on the Governor’s troubles here. We simply cannot have a trial begin just before the November elections. It will sink our republican candidates.
UPDATE part Deux: Mike Belefski is reporting on Facebook that the mainstream media will be covering the story this weekend.
The Richmonder has confirmed that the Governor has been in negotiation with the federal authorities. He says the First Couple is “now trying to avoid a felony conviction in exchange for a quick and clean exit from Virginia’s Governor’s Mansion.” How sad that is. Story here.
Saturday UPDATE: Rumors abound in Richmond that there will be a special meeting/conference call on Sunday for the House of Delegates, prior to the Governor’s big announcement. I assume that means a republican caucus call and not the full HOD.
Anyone else find it odd that the Governor’s spokesman is in San Diego “for work”? And without comment about the Governor’s impending resignation? https://twitter.com/jtuckermartin
Finally, a denial, sorta, http://dailycaller.com/2013/07/13/mcdonnell-aides-deny-resignation-rumors-are-true/ So he won’t resign Monday? Will it be Tuesday? Friday? Nothing on his twitter account,https://twitter.com/paulshanks
Much more coming on Sunday.
Early Sunday Update: The Governor’s resignation tied to the Travyon Martin verdict? So says TooConservative. Seems unlikely but the verdict is now behind us.
Second Sunday Update: The above link no longer works. It seems all posts and comments critical of the Governor have been scrubbed from TooConservative.
An excellent post by Delegate Scott Surovell on the behavior of our Governor here.
Late Sunday Update: HOD conference call for tonight was cancelled. I have no idea what that might mean.
If Governor McDonnell does not resign tomorrow, he needs to make a statement of some kind about the allegations against him. This has gone on long enough.
Looking at Governor McDonnell’s statements of Economic Interests since 2008, I am struck by the all the fun things a Governor gets to do, courtesy of the state and friends in high places. While the Governor’s salary is not exorbitant at $175,000, there are definitely some nice perks. It takes many years of hard work to reach the office of Governor. It’s nice that there are some rewards for all that work.
The Virginia Economic Development Partnership paid for some expensive trips both nationally and internationally:
London and Ireland $11,288
Asia $14,812, plus a similar amount for the First Lady
Israel $9,806, plus a similar amount for the First Lady
Paris Air Show $12,151
According to the Washington Post, during McDonnell’s first 18 months in office he spent over $200,000 traveling in the state’s two planes and 4 helicopters. Story here.
The Redskins gave the McDonnells $19,000 worth of tickets and another company, S.J. Strategic Investments, gave the family another $8,940 in Redskins tickets.
Lots of private plane trips along with other fun and interesting gifts can be found on the documents here.
The Washington Post is reporting that the McDonnells accepted a total of $145,000 from Jonnie Williams in 2011 and 2012. Last year Mr. Williams gave $70,000 to a corporation owned by Governor McDonnell and his sister. The money was not reported as a gift or a loan as required by law. Previously Mr. Williams had given Maureen McDonnell $50,000. He also helped pay for the weddings of the two McDonnell daughters, Cailin in 2011, and his year for Jeanine. Williams paid $15,000 for a shopping spree in New York for Maureen and a $6,500 Rolex watch for the Governor. This is all under investigation by state and federal authorities. A grand jury will begin hearing from witnesses next week.
The complete timeline for this evolving scandal can be found here.
Is it time for McDonnell to resign? BearingDrift has a poll up. Express your opinion here.
The longer this mess continues, the more it hurts our party and all of our candidates for office in November.
How could Bob McDonnell have been so dumb? What the hell was he thinking? This is so very disappointing.
Decades ago there was saying in Washington DC, “if you know you’re guilty hire Edward Bennett Williams“. Conversely when a person hired Edward Bennett Williams, people assumed he was guilty. Williams was the founding partner of the famous DC law firm, Williams and Connelly. He defended such people as Senator Joe McCarthy and Jimmy Hoffa. Williams also owned sports teams, including the Redskins and Orioles.
Last week we learned that a high powered, well known, Williams and Connelly partner, Emmet T. Flood, was hired by the Governor and met with him at the Governor’s mansion on Tuesday. Hiring Flood is the modern day equivalent to hiring Edward Bennet Williams. In a statement about their meeting McDonnell said, “Over the last couple months I’ve felt that given some of the things that were occurring with reviews being done on statements of mine, that it was proper for me to seek counsel.
“Emmet Flood is an attorney that’s advising me on things and I don’t think anybody should be surprised with that.” (I am surprised at the strange wording of the statement and have no idea what he’s trying to say.)
Mr. Flood defended Dick Cheney on behalf of the Bush White House when sued by Valerie Plame. Flood also represented Bill Clinton during his impeachment proceedings. McDonnell and Flood have been in consultation for months, despite the Governor’s office refusal to discuss it. At issue is not the $108,000 in cash and airfares that McDonnell supporter Jonnie Williams gave the Governor and his PAC. Mr. Williams is the CEO of Star Scientific, a former tobacco company that now makes dietary supplements. The company is under a federal securities investigation. Williams is also in litigation with the state of Virginia over a $700,000 tax dispute. Mr. William’s attorney is Jerry Kilgore. (Yes, THAT Jerry Kilgore, former Virginia Attorney General and candidate for Governor. Things just get curiousier and curiousier.)
At issue is other ‘gifts’ that Mr. Williams gave the McDonnell family and the lack of reporting of these gifts. Williams paid for the McDonnell daughter’s wedding reception at the Governor’s mansion in 2011. He paid for Maureen McDonnell’s shopping spree in New York which included a $10,000 jacket, several pairs of designer shoes and handbags, and a designer dress. Mr. Williams also provided a Rolex watch that was given to the Governor by his wife. Williams lent the McDonnell family his vacation home for their personal use. He may also have helped pay for the McDonnell family to attend the Final Four basketball tournament in 2011. A federal grand jury and been convened and is now investigating these gifts. The jury is expected to begin taking testimony from witnesses next week.
Governor McDonnell has maintained that Mr. Williams has been given no special treatment by the state.
Although this had nothing to do with Mr. Williams, Maureen McDonnell was hired as a consultant to the United Company and paid $36,000 for a few days work. This was not reported because she was made a trustee. Perhaps more maneuvering around the law? That story here.
Much more here and here and here. It’s now very obvious why the Governor felt it necessary to hire the someone of the stature of Emmet T. Flood. When you care enough to hire the very best, you turn to Williams and Connelly and Emmet Flood.
UPDATE: The Governor has also hired former Virginia Attorney General Tony Troy. Mr. Troy has taken to leaving threatening emails to bloggers who dare to write that our Governor may be leaving office. That story here. It’s never a good idea to go after a blogger. It tends to anger them, and other bloggers. Why make unnecessary enemies in the blogging community? This could have been handled better.
UPDATE 2: This is indeed getting worse by the minute. More from BearingDrift.
My concern is, how do these scandals effect Ken Cuccinelli? It’s hard to believe that his staff kept the knowledge of these scandals involving Star Scientific secret from the Attorney General. The Washington Post’s timeline of the Attorney General’s involvement with Star Scientific doesn’t look good.
It’s hard to believe that Governor McDonnell, our former Attorney General, was so careless with these ‘gifts’ from a major donor with business before the state. How could he throw away his political future like this? Over a Rolex watch and chance to drive a Masserati and some new clothes for the wife?
Bill Bolling’s dream of being Governor may soon be realized. And then what? Will he run in November? And what happens to Ken Cuccinelli’s candidacy?
More on the resignation rumor here.
The Virginian-Pilot editorial on the subject here. They’re calling it a crisis.
Most of Governor McDonnell’s changes to HB2313 were minor – small reductions in the tax and fee rates – except for one big change that made this fiasco of a bill even worse: a mechanism to impose automatic future tax increases on Virginians.
One of the controversies surrounding what I call Plan ’13 From Outer Space was the state-imposed taxes on Northern Virginia and Hampton Roads (regional taxes being unconstitutional and all). So, in reaction to Attorney General Ken Cuccinelli’s reminder of that fact (VV), the Governor came up with this (also VV):
Addressing potential legal questions regarding regional taxation authority for Northern Virginia and Hampton Roads. Amendments are made to the sections imposing the regional taxes for transportation by the state to improve the legal posture of the law by changing the applicability of the taxes to any Planning District Commission meeting certain empirical thresholds including population, registered vehicles and transit ridership. Hampton Roads and Northern Virginia are the only jurisdictions currently meeting these criteria, but in the future other parts of the Commonwealth could utilize these tools if their transportation challenges continue to grow.
Now, it sounds like the affected future regions could choose to impose new taxes, doesn’t it? There’s only one problem: there is no choice involved at all. From the verbiage of the amendment itself (LIS VA, underline added):
In addition to the sales tax imposed pursuant to § 58.1-603, there is hereby levied and imposed in each county and city located in a Planning District established pursuant to Chapter 42 (§ 15.2-4200 et seq.) of Title 15.2 that (i) as of January 1, 2013, has a population of 1.5 million or more as shown by the most recent United States Census, has not less than 1.2 million motor vehicles registered therein, and has a total transit ridership of not less than 15 million riders per year across all transit systems within the Planning District or (ii) as shown by the most recent United States Census meets the population criteria set forth in clause (i) and also meets the vehicle registration and ridership criteria set forth in clause (i), a retail sales tax at the rate of 0.70 percent. In any case in which the tax is imposed pursuant to clause (ii) such tax shall be effective beginning on the July 1 immediately following the calendar year in which all of the criteria have been met.
No “could utilize” about it. The tax increase is automatic. The determination is made not by local or state elected officials, but by the U.S. Census. Thus, future taxes can be imposed on an entire region without anyone taking responsibility.
By the way, here are the list of Planning Districts in Virginia. Please note that, in effect, a subdivision built multiple counties away from you can trigger a tax increase that no one can stop under the Governor’s amendments.
If anything, this just makes Plan ’13 From Outer Space worse. It certainly is no way to govern…
…and it leaves Virginia’s transportation system just as overcentralized, disconnected from land use, and held hostage to upstream unfunded mandates as it was before this entire sorry episode began.
With any luck, the legislature will reject this; the entire, listing enterprise will sink beneath the waves; and Virginia can try again with a fresh perspective in 2014.
Cross-posted to the right-wing liberal
Governor McDonnell Makes Amendments to Strengthen Major Transportation Package
~Edits to bill strengthen legal posture, adds lock boxes to safeguard new funds, reduces alternative vehicles fees, vehicle titling tax, and local taxes; maintains structure for long-term sustainable transportation solutions to improve job creation and quality of life~
RICHMOND—Governor Bob McDonnell today completed his review of the major transportation funding compromise passed by the General Assembly in late February. The bill substantially meets the goals established by the governor when he called for transportation investment and reform to be a top priority during the 2013 General Assembly session. However, the governor has proposed amendments to ensure that the provisions of the legislation do not negatively impact Virginia businesses and citizens, that they comply with the Virginia Constitution, and that Virginia’s Executive Branch agencies can properly implement and administer the new and improved funding mechanisms.
The bill reflects the principles of the governor’s introduced bill, which, as amended, reduces the gas tax by 35 percent and replaces it with a sales tax that grows with the economy, uses $200 million in current general funds, uses another $200 million in future general funds from the federal Marketplace Fairness Act, and ensures that alternative fuel vehicles pay a share of the maintenance of the roads.
“Virginia is now faced with the need to invest in our transportation system to ensure that our highway, rail and public transportation infrastructure is safe, efficient and reliable for our more than 8 million citizens,” Governor McDonnell said. “I thank Republicans and Democrats in the House of Delegates and Virginia Senate for working together across party, philosophical and regional lines to solve one of our most vexing and longstanding legislative challenges. For 27 years Virginians have sat in traffic while partisan differences over how to address these challenges have stalled progress. The transportation funding and reform package that passed the General Assembly last month was an innovative solution that represents a realization that we must invest in our infrastructure to ensure our continued economic prosperity, safe roads for our citizens to travel, and an enhancement in their quality of life.
“In 1983, President Ronald Reagan proposed and signed legislation to more than double the national gasoline tax. When signing the bill, he said: ‘We simply cannot allow this magnificent [transportation] system to deteriorate beyond repair. The time has come to preserve what past Americans spent so much time and effort to create, and that means a nationwide conservation effort in the best sense of the word. America can’t afford throwaway roads or disposable transit systems. The bridges and highways we fail to repair today will have to be rebuilt tomorrow at many times the cost.’
“Virginia’s economy depends upon a safe, reliable, efficient transportation system spanning all areas of the Commonwealth. This is why I have substantially agreed to the provisions in the compromise bill that passed our legislature, but have proposed multiple amendments to limit what it asks Virginians to contribute, to address potential legal questions regarding the regional taxing authority, and to clarify many administrative and technical aspects of the bill.”
Governor McDonnell’s key policy amendments include:
· Reducing the proposed vehicle titling tax increase from 4.3 percent to 4.15 percent. After hearing from automobile dealers and constituents, the governor proposed this amendment to ensure the increase is reduced and does not adversely impact the number of vehicles purchased.
· Reducing the Alternative Fuel Vehicles annual Fee from $100 to $64. The intent of this fee assessed to drivers of alternative fuel vehicles was to ensure that they are paying their share for the road maintenance and wear and tear caused by their vehicles. The original proposal for a $100 fee was based on a 17.5 cents per gallon gas tax. The conference report establishes a lower rate of taxation on gasoline. As such, this amendment ensures equity in how different types of vehicle fuels are taxed.
· Correcting and reducing the rate of taxation for the regional congestion relief fee. The stated goal for this fee was to raise approximately $30 million per year. Based on slightly incorrect data, the fee was set at $0.25/$100 for real estate transactions. Utilizing correct data, a rate of $0.15/$100 will generate the same revenue of $30 million per year.
· Reducing the Transient Occupancy Tax in Northern Virginia. At 3 percent, the TOT would place the tax in Northern Virginia near or above surrounding out-of-state jurisdictions. Reducing the rate to 2 percent will not significantly impact revenues, but will ensure Virginia’s hotels remain competitive.
· Addressing potential legal questions regarding regional taxation authority for Northern Virginia and Hampton Roads. Amendments are made to the sections imposing the regional taxes for transportation by the state to improve the legal posture of the law by changing the applicability of the taxes to any Planning District Commission meeting certain empirical thresholds including population, registered vehicles and transit ridership. Hampton Roads and Northern Virginia are the only jurisdictions currently meeting these criteria, but in the future other parts of the Commonwealth could utilize these tools if their transportation challenges continue to grow.
· Ensuring transportation funds generated by this legislation are only used for transportation. General provisions were added to the legislation to ensure that funds provided for in the statewide funding and regional plans remain dedicated to transportation in the years ahead. In making this commitment to fund this core function of state government, Virginians expect that commitment to be honored and that this funding is to be used solely for the purpose for which it was intended.
These amendments, combined with a series of technical and administrative amendments, will accomplish the goals established by the governor earlier this year by moving away from the declining gasoline tax and toward a more dynamic sales tax-based revenue source. The final version of HB2313 sponsored by speaker Bill Howell eliminates the 17.5 cent per gallon tax on gasoline, increases the state sales portion of the sales tax from 5 percent to 5.3 percent, dedicates revenues for the Commonwealth Mass Transit Fund and the Intercity Rail Operating and Capital Fund, and dedicates increased revenues for the Commonwealth Transportation Fund. Governor McDonnell’s amendments would still result in over $5.9 billion in total revenue for transportation over the next five years
This long-term transportation plan will generate thousands of jobs, create hundreds of millions of dollars in economic activity and provide the Commonwealth with the transportation infrastructure necessary to grow and prosper in the decades ahead. As a result of this plan, thousands of delayed construction and maintenance projects around the state will be funded, from widening I-64 between Newport News and Williamsburg, widening Route 28 in Northern Virginia, bringing down tolls on the Dulles Toll Road and advancing the Silver Line, bringing Amtrak service to Roanoke, and helping to build the Coalfields Expressway in Southwest Virginia. It will also eliminate the current unsustainable practice of taking money meant for new projects just to fund paving and pothole patching (currently equaling nearly $400 million annually).
“If we do not act now to solve the Commonwealth’s transportation funding problem, the cost of delay will be much higher in the future” Governor McDonnell said. “I thank Speaker of the House Bill Howell for his leadership and many other persistent legislators to get this bill passed to ensure Virginian’s economic prosperity, and to provide safe roads for our citizens and the quality of life they deserve. I also thank Attorney General Cuccinelli for the assistance he and his Office provided to my Office throughout the process to highlight and address the legal questions raised.”
Following up on their anti-Bob McDonnell ad running in Iowa, Patriot SuperPAC has moved on to the next presidential primary state, New Hampshire.
Say What? Thanks to the transportation bill it will cost me more to sell my house!!
That’s right. With the passing of the massive Transportation Bill HB 2313, which applies a “Regional Congestion Relief Fee” Virginia homeowner’s grantor’s taxes (paid by the seller) will increase by $0.25 for every $100 of the sales price. Just as our real estate market is starting to recover, our elected legislators in the Virginia General Assembly clip our wings by increasing the taxes sellers pay at the time of sale. You may be asking yourself, how can these “leaders” be so out of touch? It is as if they are unaware that many homeowners are still underwater and struggling to come up with money needed at the closing table as it is. Needless to say, increasing the cost will not stimulate our real estate market, so why would they do it? The justification across the board from special interest groups who supported it and the legislators who voted for it is that Virginia needs to raise taxes in order to reduce commute times in an effort to attract businesses to Virginia and improve quality of life for existing residents. Leaving aside the obviously polarizing discussion over where the line should be drawn between increasing taxes and reducing spending, one is still left wondering how legislators justify spending real estate recording taxes/fees throughout Northern Virginia to pay $300 Million dollars toward Phase II of the Silver Line in the name of congestion relief. The bill indicates that the fees paid in Northern Virginia municipalities will go to the Northern Virginia Transportation Authority and will be returned to those jurisdictions proportionately. I decided to look into “The Authority” and this is what it is comprised of; Virginia’s Planning District 8, which includes: The counties of Arlington, Fairfax, Loudoun and Prince William; the cities of Alexandria, Fairfax, Falls Church, Manassas and Manassas Park; the towns of Dumfries, Herndon, Leesburg, Purcellville and Vienna. For more information on District 8, you can find it on the web here: http://www.novaregion.org/ .
Wait, put down the knife, there is a chance that this legislation will be modified by the Governor but even if it isn’t it is still quite possible that it will face legal challenges and be found unconstitutional. There are several areas that at least one expert is suggesting could expose it to legal challenge; Discriminatory local tax being called a fee (VA Supreme Court ruled against similar in 2008 also violates the “home rule” principle), uniform taxation (In Virginia’s Constitution http://constitution.legis.virginia.gov/ Article X, Section 1), local taxation only on real estate (and Article X, Section 4), taxes added to the bill in conference committee in violation of the Jefferson Manual on Legislative Order. If you want to know more, the detailed article that appeared in the Washington Post can be found here: http://www.washingtonpost.com/opinions/vas-transportation-bill-is-unconstitutional/2013/02/25/3d73abee-7f88-11e2-a350-49866afab584_story.html
We will be watching this legislation closely and will let you know if changes that impact your real estate transactions are instituted.
Please find below the language for the fee/tax in HB 2313:
§ 58.1-802.2. Regional congestion relief fee.
In addition to any other tax or fee imposed under the provisions of this chapter, a fee, delineated as the “regional congestion relief fee,” is hereby imposed on each deed, instrument, or writing by which lands, tenements, or other realty located in any county or city embraced by the Northern Virginia Transportation Authority established pursuant to § 15.2-4830 is sold and is granted, assigned, transferred, or otherwise conveyed to or vested in the purchaser or any other person, by such purchaser’s direction. The rate of the fee, when the consideration or value of the interest, whichever is greater, equals or exceeds $100, shall be $0.25 for each $100 or fraction thereof, exclusive of the value of any lien or encumbrance remaining thereon at the time of the sale, whether such lien is assumed or the realty is sold subject to such lien or encumbrance.
The fee imposed by this section shall be paid by the grantor, or any person who signs on behalf of the grantor, of any deed, instrument, or writing subject to the fee imposed by this section.
No such deed, instrument, or other writing shall be admitted to record unless certification of the clerk wherein first recorded has been affixed thereto that the fee imposed pursuant to this section has been paid.
Fees imposed by this section shall be collected by the clerk of the court and deposited into the state treasury as soon as practicable. Such fees shall then be deposited into the Northern Virginia Transportation Authority Fund established under § 15.2-4838.01 as soon as practicable.
Two national news sources came out this week against the massive new tax increases in Virginia, the National Review and the Wall Street Journal.
The National Review’s headline was “McDonnell’s Bad Transportation Deal”. The article may read here.
Among other things, the article explains how this massive tax expansion will hurt Ken Cuccinelli’s chances in the fall,
“Attorney General Ken Cuccinelli, the conservative favorite to replace the outgoing Governor McDonnell, is fiercely opposed to the transportation plan and its tax increases, while his likely Democratic opponent, former Clinton henchman Terry McAuliffe, favors it. Cuccinelli is now put in the position of running against the Republican governor and the Republicans in the state legislature as well as the Democrats. Cuccinelli and McAuliffe are currently in a dead heat in the polls, and he could have used an assist from his party rather than another hurdle. It is harder to gun as a small-government conservative when your party is enacting large tax increases.”
Thanks Governor McDonnell! Perhaps he’s supporting Bill Bolling?
The conclusion by the National Review,
“Virginia does indeed suffer from serious traffic congestion, particularly in the northern part of the state, where the bloated work force of the ever-expanding federal government lolls in the D.C. suburbs like the world’s most contented occupying force. But the cure for Big Government in Washington is not Big Government in Richmond, and Governor McDonnell should know as much. It is no secret that he is testing the presidential waters for 2016, and we suspect that he felt some pressure to produce a hallmark bill after the failure of some of his better ideas, such as privatizing Virginia’s ridiculous state-run liquor soviet. The resulting legislation must be regarded by conservatives as a black mark on the governor’s résumé. What remains to be seen is not whether this is a bad deal but how bad a deal it is.”
The Wall Street Journal article is entitled “A Cavalier Fiasco” with a subtitle “Virginia Republicans try to elect the Next Democratic Governor”. You can see where this is headed! Unfortunately you can’t see the article without a subscription to the WSJ. The way around that, go to google and type in Cavalier Fiasco. That will bring up the article, click on it and read the whole thing. It’s well worth the trouble to find it. The article begins,
“There’s one thing uglier than a Democratic tax-and-spend spree. A Republican one. On Friday Virginia Governor Bob McDonnell and a GOP-run legislature approved a five-year, $6 billion transportation bill financed almost entirely with higher sales and car taxes. The big winners are unions, real estate developers and the transit lobby.
Taxpayers didn’t fare so well. The sales tax rises to 6% from 5% in Hampton Roads and populous Northern Virginia and to 5.3% everywhere else. The hated car tax (which Republicans once vowed to eliminate) rises to 4.3% from 3%, meaning a new $30,000 car or truck will come with a $1,290 tax bill. Then there’s a new 0.25% sales tax on homes in Northern Virginia, plus a new hotel tax.
Mr. McDonnell claims that “with this bill gas prices will be reduced” because he’s eliminated the 17.5 cents a gallon gas tax. Yet he’s replaced it with a more hidden 3.5% tax on the wholesale price of gas. With wholesale prices nearing $4 a gallon, this is a 14 cents a gallon tax. This new levy will automatically rise with inflation and oil price spikes, which means over time the McDonnell gas tax “cut” may be an increase.”
Some say it will mean an increase in gas prices by September when gas prices usually rise.
On McDonnell’s expansion of medicaid,
“Mr. McDonnell even cut an 11th-hour deal with Democrats over the expansion of Medicaid under ObamaCare. Last Wednesday Mr. McDonnell issued a press release declaring: “I cannot and will not support consideration of an expansion of Medicaid in Virginia until major reforms are authorized and completed, and until we receive guarantees that the federal government’s promises to the states can be kept without increasing the immoral national debt.”
Two days later, to secure Democratic votes on his tax increase, he agreed to let a bicameral commission decide if the state will expand Medicaid. He agreed even though his attorney general, Ken Cuccinelli, issued an opinion that this is an unconstitutional delegation of authority. Mr. McDonnell says the commission means Virginia won’t expand Medicaid as long as Republicans control the legislature, but wait until the hospital lobby gets done working the same Republicans who raised taxes.”
After the betrayals by our delegates this session, I’d say the republicans’ loss of the legislature is likely to happen within one year, two at the outside. With Bill Bolling entering the Governor’s race, we could lose that office as well, paving the way for a huge expansion of medicaid, among many other things.
The Wall Street Journal concludes with this:
“This fiasco will haunt Republicans in a state that holds elections in November. Probable Democratic nominee for Governor Terry McAuliffe endorsed the bill knowing it erases any GOP advantage on taxes and spending. Mr. Cuccinelli, the likely Republican nominee, opposed the bill but must now find a way to rally a splintered GOP and demoralized conservatives. At least Republicans can erase Mr. McDonnell’s name as a national candidate or VP choice in 2016.”
I can’t help but agree. McDonnell will never run for another office as a republican. Perhaps he will form a coalition with Bill Bolling in a new ‘Democrat Lite’ party.
Stafford County Board Chair Susan Stimpson, who is also a candidate for the GOP nomination for Lt. Gov. this year, issued this compelling email regarding the legislature’s vote to raise taxes to fund transportation.
I just received an email from the Governor that leaves me flabbergasted. It brags about billions in new taxes. It even directs people to look at the spending projects in their area! It sounds like a White House press release. I was half expecting it to conclude with an offer for a free cell phone!
Republicans are supposed to be about cutting taxes, cutting spending and reducing the size of government—like our current leadership in Richmond promised us they would do when we were working hard to elect them.
Instead they abandoned our party’s principles by raising taxes and paving the way for Obamacare.
Do we or do we not believe that a restrained and limited government is what allows the most freedom and prosperity?
Speaker Bill Howell and Governor McDonnell are friends. But they could not be more wrong. And they could not have failed us at a more critical time.
There has been a long, unsettled battle within the Republican Party in Virginia on whether or not government has enough money. It has played out in 2004, 2007 and now. Each time, Republican leadership has taken the side of “not enough taxes” instead of providing the vision and leadership toward a restrained government. How much more can we bear?
It’s time to end this battle decisively with New Leadership committed to the principle that Virginians are over-taxed.
As Lieutenant Governor, I will not only work tirelessly to advance a conservative agenda in the General Assembly, but I will work relentlessly for authentic conservative majorities in the House and Senate.
I have talked to Republicans today who are absolutely disgusted with our Party. They are sick and tired of being sold out. The Republican Party itself is at stake in Virginia, and if we don’t act and restore our Party to that of lower taxes and smaller government, we risk losing faithful Republicans and independent voters. While Democrats are proudly stating they stayed committed to their values and achieved higher taxes and Medicaid expansion, Republicans failed to lead and they rolled. And we control both Houses and the Governor’s office!
The time to act is now. As Lieutenant Governor, I will fight for tax cuts, spending cuts and smaller government as I have done in Stafford County, and I will lead an effort to elect principled, tax cutting conservatives to the House of Delegates and State Senate.
P.S: It is critical that we elect grassroots conservatives who will lead our efforts to defeat tax and spend Republicans at the Republican State Convention on May 18. Visit our website and get the delegate filing information for your county or city today!
John Fund (National Review Online) has noticed the Virginia tax battle, and the title says it all:
McDonnell Tarnishes His Legacy
I particularly like his description of the conference committee’s effect on the tax hikes: “kudzu-like growth.”
Now the eyes of the nation are on the General Assembly…
If what Steve Contorno (Washington Examiner) hears is correct, Democrats in the State Senate could be so wedded to Frank Wagner’s tax hike that they’ll refuse to support something too close to McDonnell’s tax hike, while Republicans who backed the latter may not like anything to close to the former:
“As long as the [final bill] resembles the Senate plan, we will have a transportation bill this year,” said Senate Minority Leader Dick Saslaw, D-Springfield. “If it varies too widely, we likely will not.”
Senate Democrats allowed $50 million a year to come from the general fund, but that came reluctantly. House Minority Leader David Toscano, D-Charlottesville, said it’s unlikely they’ll budge on that.
Those kinds of lines in the sand are already threatening a compromise as representatives from both parties begin to meet behind closed doors to find a solution that can pass both chambers.
“If we’re going to start ruling out things almost from the beginning,” said House Majority Leader Kirk Cox, R-Colonial Heights, “we’re going to have a lot of trouble getting there.”
The House version takes a lot more road money out of the general fund (pursuant to McDonnell’s tax hike).
My guess is the Republicans are so desperate for anything that they can claim well help “transportation” (remember, all three statewide Republican officeholders are backing different tax hikes) that they’ll agree to anything – meaning the Democrats can probably squeeze as much from the taxpayers as they wish.
Still, there may be some hope that political gridlock can leave the taxpayers unscathed.
Cross-posted to the right-wing liberal