This is the case for the Commonwealth of Virginia. Many years ago, back in the forties and fifties, Virginia operated on a “pay as you go” budget. That is, they spent within the annual budget. The budget usually never increased beyond the inflation and population percentages. However, in the sixties the “liberals” took over and things started changing for the worst. In 1966, Governor Mills Godwin and the General Assembly of Virginia decided that they did not have enough money for their programs. So they established sales tax for the first time in Virginia history. They started with 2% sales tax with an optional 1% allowed for localities. For Fairfax residents, this meant a new 3% sales tax in 1966. The reason given was that Virginia did not have an adequate budget especially for education. At that time, Virginia rated low academically among all states. Also, Virginia needed to establish community colleges throughout Virginia (2 year program) which they did not have at that time. (1)
Now twenty years later, in 1986, again Virginia does not have enough money for education. So Governor Gerald Baliles and the General Assembly push through a lottery.
The lottery was set up to fund education throughout all of Virginia. The funds are only supposed to be used for education purposes. In 2008, the State netted $455.3 million for educational purposes. In 2009, the State netted $439.1 million. This means that the State has sales of $1.365 billion and pays prizes of $781.0 million with retailer compensation of $76.9 million plus operating expenses of $73.7 million thus netting for the State in 2009 $439.1 million. (2)
Now eighteen years later, in 2004, again Virginia does not have enough money for education. So Governor Mark Warner and his buddy State Senator John Chichester, Chairman of the Finance Committee, stated that they need more taxes for education. So the budget and state taxes were raised an astronomical $1.4 billion primarily for education. None of it went to transportation. At that time, the Wilder Commission Report that showed the state could save $750 million but was ignored by the Governor and most of the General Assembly. This was the largest tax increase in the Commonwealth of Virginia’s history in almost 400 years. Remember that in 1607, the first permanent English settlement in the New World was established in Jamestown, VA. (3)
The Virginia budget has increased 99.2% in the past ten years from $17.6 billion to $35.1 billion ending in 2007 while inflation has only gone up less than 30% for the same period. (4) So, as you can see, Virginia never has enough tax revenue. The greedy politicians want some more of your money!
(1) Virginia: The New Dominion – A history of Virginia from 1607 by Virginius Dabney
(2) Virginia Lottery data gathered from Supervisor Frey’s office dated 10/22/09
(3) FCTA Release dated 1/08/05 and 2/4/05
(4) FCTA Bulletin dated Fall 2009
Written by Charles McAndrew
FCTA Board Member
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