Fiscal Policy

League of Women Voters^®
of Virginia

Public Policy Position

FISCAL POLICY
The League of Women Voters of Virginia advocates tax increases when necessary. We believe any changes in the tax structure should be progressive. We support continuing evaluation of all programs for need and effectiveness as well as for efficient and economical government operation.
Tax Structure
The League supports:

A more progressive state income tax, with an increase in the number of income brackets and a raise in the rates in higher brackets;
The use of progressive income taxes to meet additional needed revenue, with smaller amounts derived from a tax on soft drinks (crown tax), and an increase in the present taxes. on alcoholic beverages and tobacco;
A systematic review of earmarked funds with less reliance on long-term earmarking of funds such as revolving funds, trust funds, bonds, or any sources of revenues designated for specific purposes;
The designation of highway funds to include all means of transportation and loosely related activities; and
The use of General Obligation Bonds to finance capital outlays.

We favor keeping the corporation income tax structure competitive with neighboring states, and oppose any increase in the sales tax unless food is excluded from the increase.
Accountability and Responsibility
The League believes that the growth of state/local government spending can be contained through positive rather than restrictive procedures. Therefore we are opposed to statutory or constitutional limitations on state/local government spending or revenue sources.
We believe that elected officials should be accountable for laws enacted and taxes levied. Representatives have a responsibility to evaluate all government programs to determine public needs as well as real and long-range costs.
State/Local Fiscal Relationship
Localities in Virginia have only the limited fiscal powers delegated to them by the state and must rely heavily on the property tax. The League advocates the following changes in the state/local fiscal relationship:

Increased commitment by the state to fund its mandated programs; The state should set basic standards for providing services to all citizens. The need for mandated programs should be continuously evaluated and their true and eventual costs should be considered. There is a great variation in the economic strength of different sections of the state so the state itself must assume a larger share of the financial burden.
Increased flexibility for local governments to choose the ways in which they raise revenues. Setting of minimum standards by the state should not preclude the setting of higher standards by localities willing to meet additional costs. Localities should have more freedom to decide how to raise the money for these costs.
Increased standardization of assessment procedures by the state as well as regulation of local tax administration with allowances for local control to respond to local conditions.
Increased protection of local tax base. Exemptions from the property tax should be kept to a minimum, with service charges being imposed whenever practical. Relief given to special classes of taxpayers should be confined to those truly in need; the decision to offer such relief should be at local discretion. (1964, 1977 & 1979)

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