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Gillespie Tax, Education Promises Depend on Dramatic Revenue Growth

Critics charge Ed Gillespie's promises rely on unrealistic economic projections. (Gillespie for Governor)
Critics charge Ed Gillespie's promises rely on unrealistic economic projections. (Gillespie for Governor)
October 31, 2017

RICHMOND, Va. – Republican Ed Gillespie is promising both tax cuts and more public-school funding, but he's counting on big revenue from economic growth, which might not happen.

According to the Virginia Education Association, Gillespie's tax cuts would mean $400 million less for schools when fully implemented. The candidate says he expects the state to take in billions in growing revenue - enough to cover the cuts and new school funding.

But Chris Duncombe, senior policy analyst at The The Commonwealth Institute, says other states have tried that and ended up slashing school budgets.

"So there definitely are serious consequences to reducing revenues that the state has and hoping that economic growth will be able to fill in for those cuts," he warns.

Gillespie's income-tax cuts would give the most to high-income households. Democratic Lieutenant Gov. Ralph Northam has proposed a tax cut about a quarter the size - eliminating the state sales tax on groceries, more targeted to low-income families and less of an issue for the education budget.

Gillespie says his tax-cut plan comes with a safety valve - a trigger that would stall the cuts if the increases in revenue don't come through.

"It would be based on those revenue projections, so we would have triggers," he says. "If the revenue did not materialize, then the tax cuts would be delayed or phased in at a slower rate, to protect core government functions like education."

In fact, something like that happened at the last General Assembly - a proposed two percent bump in teacher pay had to be scaled back by more than three quarters when revenue didn't meet projections. Duncombe says the state's teacher pay has fallen badly compared with its peers since the recession. He says Virginia has only just started to try to fix that.

"The incoming governor will have a really important choice: if they're going to continue down this path of restoring our investment or if they're going to go back on that recent progress," he says.

He says they do expect some increases in revenue, but how much is a vital question. The election is next week.

Dan Heyman, Public News Service - VA