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$400 One-Time Tax Rebate From Virginia Possible Now

Aman Jain

Published: August 24, 2023 10:03 pm

Last Updated: August 25, 2023 12:32 pm

Virginia taxpayers may get a one-time tax rebate soon as part of a long-awaited budget deal. Gov. Glenn Youngkin recently hinted that taxpayers in the state may get some of their own money back in the form of a one-time tax rebate from Virginia.

Why Does The Governor Want A One-Time Tax Rebate From Virginia

On Wednesday, Gov. Youngkin said that he “can live with” a potential compromise that would replace his demand for recurring tax cuts with a one-time tax rebate from Virginia. The governor noted that he would settle for the tax rebate with the hope that the next state spending plan would include more permanent tax relief.

“If we take a moment here and provide the one-time tax relief, then we move forward for permanent cuts next year, that’s a compromise that I’d be willing to accept,” Gov. Youngkin told reporters.

If the one-time tax rebate from Virginia is approved, individual taxpayers will get $200 and couples will get $400.

Separately, Secretary of Finance Steve Cummings informed legislators that the governor has set aside about $2.1 billion for “additional taxpayer relief.” According to Cummings, this additional relief will provide a cushion against an economic downturn.

Gov. Youngkin also said he has considered a potential recession while preparing a new budget, which will be proposed in December.

Why Is A Compromise Needed?

Gov. Youngkin initially proposed using the $1 billion surplus for new tax cuts. The proposed new tax cuts would be in addition to the $4 billion tax cuts, which the General Assembly approved last year.

Although the House approved Youngkin’s plan, the Senate bill proposed sending excess funding toward priorities, as well as giving pay raises to teachers and state employees. Philosophical differences separate Republicans and Democrats over the use of excess funds.

Republicans, for instance, support the use of excess revenue to give tax breaks to boost economic growth and, in turn, make the state more attractive to businesses and individuals. Democrats, on the other hand, believe the state will benefit more by investing the funds in public services.

Republicans narrowly control the House, while Democrats enjoy a slim margin in the Senate. Both the House and Senate failed to reach a budget deal before the annual General Assembly session adjourned on February 25.

This impasse hasn’t resulted in a shutdown of state agencies or programs because the state is already at the halfway point of the two-year budget passed in 2022.

Now that the governor has offered a potential compromise, the assembly could meet next month to discuss the compromise that is acceptable to the governor without amendment.

Gov. Youngkin, however, admitted there is no guarantee that Democrats would come along with them next year. Democrats have already warned that recurring cuts could prove risky in an uncertain economy.

The fate of next year’s tax cuts will likely be determined by the General Assembly elections, which are scheduled in November.

This article originally appeared on ValueWalk