Virginia Lawmakers Asked to End Grocery Tax By Northam, After GOP Successor Ran on Idea

Outgoing Democratic Gov. Ralph Northam is asking Virginia lawmakers to oust the state's 1.5 percent grocery tax, an issue that Republican Gov.-elect Glenn Youngkin centered on heavily in his gubernatorial campaign.

Though Northam talked about eliminating the tax when he ran for governor in 2017, it was not as much of a key campaign base as it was for Youngkin. The governor-elect, set to take office in mid-January, included the measure in his "Day One game plan."

He said that the tax is regressive and disproportionately affects low-income people.

"As governor, I will eliminate Virginia's grocery tax. Career politicians will call it radical, but to me, it's just common sense," Youngkin said in a campaign video posted on his Twitter page in September.

The proposed tax elimination is one of several tax cuts that Northam plans to include in his outgoing budget proposal, in which Youngkin had encouraged the governor to include such cuts.

"Governor Northam's budget proposal is a step in the right direction but does not entirely fulfill Virginians' mandate," said Macaulay Porter, a Youngkin transition aide. "We appreciate the Northam administration laying the foundation for these elements of the Day One game plan so that Governor-Elect Youngkin can hit the ground running on January 15th to begin executing on his key campaign promises and finish the job. "

If the tax is eliminated, Virginia will leave a group of 14 states that tax groceries. The proposal does not suggest removing the add-on grocery tax of 1 percent by localities.

Virginia Gov. to Cut Grocery Tax
Outgoing Democratic Gov. Ralph Northam is asking Virginia lawmakers to oust the state's 1.5 percent grocery tax, an issue that Republican Gov.-elect Glenn Youngkin heavily campaigned on. In this photo, Northam speaks at an event titled “Transforming Rail in Virginia” at the Amtrak-VRE station in March 30, 2021 in Alexandria, Virginia. Win McNamee/Getty Images

Speaker-designee Todd Gilbert had a more blunt assessment of Northam's tax proposals.

"Now we know what it takes to get Virginia Democrats to propose cutting taxes — losing to a Republican," Gilbert said in a statement.

Sharon Wood, a retired registered nurse, said she has seen her monthly grocery bill go from about $200 to $350 over the past few months.

"I think it will really help in this inflationary time," Wood said of the proposed tax cut after shopping at a Food Lion store in Glen Allen, a Richmond suburb. "Every week I go [grocery shopping] and I see increases."

State Secretary of Finance Joe Flores said 1 percent of the revenue from the state's 1.5 percent share of the tax goes to school districts, while the other 0.5 percent is earmarked for transportation projects. Flores said Northam's proposed budget makes up the revenue that will be lost by school districts.

"They will receive the same amount of funding that they are currently receiving from the state," he said.

Flores said the revenue that would go to transportation projects is not made up for in the governor's budget proposal, but the state will receive additional federal transportation money under the infrastructure bill passed by Congress last month.

Northam, who is scheduled to present his budget proposal to the legislature's money committees on Thursday, is also proposing that the state give one-time "economic growth" tax rebates of $250 for individuals and $500 for married couples; make up to 15 percent of the federal earned income-tax credit refundable for eligible families; and end the accelerated sales tax payments for retailers.

Northam said Virginia's strong economic position allows the state to reduce taxes and to pay for other provisions in his budget proposal, including raising salaries for teachers and law enforcement and funding historically Black college universities at record levels.

"Many professionals made it through the pandemic fine, as their work simply moved online. But workers haven't been so lucky when their jobs require close contact with other people," Northam said. "Virginia can help working people by eliminating the state grocery tax, providing one-time rebates, and giving a tax break to people who are working."

In addition to eliminating the grocery tax, Youngkin pledged during the campaign to suspend the most recent gas tax hike for a year; offer a one-time tax rebate of $300 for individuals and $600 for joint filers; cut income taxes by doubling the standard deduction; cut taxes on veterans' retirement income; and implement a requirement that voters approve increases on local property taxes.

Younkin defeated former Gov. Terry McAuliffe, a Democrat, in the Nov. 2 election.

The Associated Press contributed to this report.

Youngkin Grocery Tax
Virginia Gov.-elect Glenn, set to take office in mid-January, included a measure to cut the state's grocery tax in his “Day One game plan.” Youngkin arrives to speak at an election night party in Chantilly, Va., early Wednesday, Nov. 3, 2021, after he defeated Democrat Terry McAuliffe. Andrew Harnik/AP Photo