On Saturday, January 15th, in our state’s capital of Richmond, former private equity CEO, Glenn Youngkin, was sworn in as the 74th governor of Virginia. As a Republican, his victory left many Democrats’ jaws touching the floor as their pick for president, Joe Biden, had won the state by 10 points in the 2020 election just a year prior. For many Virginians, however, Youngkins victory is a sign of hope and the way forward in seeing the commonwealth compete & grow into its enormous potential.
During his inaugural speech Governor Youngkin expressed a message of optimism & unity stating, “Today we gather, not as individuals, nor as Republicans or Democrats, but as Virginians.” Also sharing, “No matter who you voted for, I pledge to be your advocate, your voice, your governor… Our politics have become too toxic. Soundbites have replaced solutions – taking precedence of good faith problem-solving.”
Youngkin certainly did not waste any time getting to work & putting his “good faith problem-solving” to the test. Within hours of taking his oath, Youngkin put pen to paper in signing 11 executive actions as part of what he referred to as his “Day One Game Plan”. Actions range from ending the use of critical race theory in K-12 public education to reducing the regulatory burden on businesses & citizens across the commonwealth.
The new governor inherits a strong economy & according to CNBC, the reigning champion for best state in the country for business. Virginia recorded a record breaking $2.6 billion budget surplus at the end of fiscal year 2021, the largest in the commonwealth’s history, and most certainly puts the new administration in a strong starting position. Currently there is a proposal to return some of the state’s surplus money to taxpayers via one-time rebates, $600 for joint filers & $300 for individuals.
In addition to the 11 executive actions signed by Youngkin on his first day, he addressed several items that will have a direct impact on Virginians bottom line moving forward. Below are four that I believe you should have on your radar.
#1. Suspending the Recent Gas Tax Hike for 12 months
In an effort to reduce the higher cost of living in Virginia, Youngkin will aim to suspend the recent gas tax hike for 12 months. “We’ve watched the left, liberal leadership in Richmond just over tax Virginias an extraordinary amount”, then candidate Youngkin told voters while on the campaign trail in late 2021.
In response to a Joint Legislative Audit & Review Commission report, the General Assembly passed a massive transportation bill in its 2020 session which approved a phased increase in the state gas tax, in which phase two took effect on July 1, 2021.
Phase two increased the tax from 21.2 cents per gallon of gasoline (in effect from July 1, 2020 to June 30, 2021) to 26.2 cents per gallon which is set to be in effect from July 1, 2021 to June 30, 2022. Youngkin, as mentioned, is looking to pause this tax for 12 months.
To view all current fuel tax rates, click here
#2. Eliminating Virginia’s Grocery Tax
In another effort to cut costs for Virginians, Governor Younkin has vowed to eliminate the 1.5% state tax on groceries. Virginia is one of only thirteen states that taxes groceries & also allows for an additional 1% local tax option.
Former governor, Ralph Northam, also proposed the termination of this tax but was not able to do so during his time in office.
#3. Doubling the Standard Deduction on Income Taxes
During his address to the General Assembly on January 17th, Governor Youngkin shared that, “We also need to give Virginian’s a real break on their personal income tax by doubling the standard deduction.” The current standard deduction for those who file their taxes Married, Filing Jointly is $9,000. This of course would increase to $18,000 should the proposal get approved.
Governor Youngkin has also shared that, “Lowering taxes & restoring fiscal responsibility in Richmond is a primary focus of our Day One Game Plan.” To view Virginia’s current standard deduction table, click here.
#4. Eliminating Tax on the First $40,000 in Veteran Retirement Pay
As a lifelong resident of Hampton Roads I understand the rich history surrounding the men & women that have sacrificed everything in fighting for our freedom. I also know the important economic impact that the military has on the state of Virginia, with the DoD spending $64.3 billion in 2020 alone which accounted for 11.3% of the state’s total GDP.
Virginia is one of only three states that fully taxes military retirement pay with California & Vermont being the others. Governor Youngkin believes that this needs to change & that Virginia should provide special tax provisions on military retirement pay. Again during his address to the General Assembly Youngkin shared that,
“I believe we have a special obligation to a group of individuals that have served our country with distinction, our military veterans… That’s why I’m asking this General Assembly to act on something long talked about. Let’s eliminate the tax on the first $40,000 in military retirement pay together.”
While we haven’t even begun to scratch the surface of this administration’s efforts to improve the commonwealth, there is certainly a buzz of excitement in the air as more Virginians are starting to see all that this great state can become.
It’s time for Virginia to step up & show the rest of the country that we are amongst the best states to live, raise a family, conduct business, & enjoy. The foundation is here, it’s now time to build.
Governor Youngkin, the ball is now in your court.
Parker Financial Group
P.S. – to schedule an appointment with me, click here.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. Parker Financial Group is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Parker Financial Group are not affiliated companies. 1186075 – 1/22