By Felicia Howard
Virginia Statehouse News

A New York state lawmaker says tax limitation policies can help states, cities and towns curb their spending, but some Virginians aren’t so sure.

Tax and spending limits put statutory limitations on a state’s spending. The laws forbid lawmakers from growing expenditures faster than state revenue grows.

Micah Kellner, a Democrat state lawmaker from New York,  said limitations are part of the answer for states grappling with revenue shortfalls. He made the claim during a policy discussion held recently by at the Mercatus Center at George Mason University in Fairfax.

“Limitations will ultimately benefit tax payers,” Keller said. “Money will go right back to their pockets.”

The formula for the limitations ties the growth of a state’s budget and spending to its population growth and inflation.

The limitations may help the budget in New York, which is among 10 states with the highest tax rates in the country. But Virginia is ranked 37th for taxes, according to a recent report by Virginia’s Joint Legislative Audit Review Commission, making such policies less useful in the state.

Mary Jo Fields, director of research for the Richmond-based Virginia Municipal League, said Virginia does not need limitations.

“New York is very different from Virginia,” she said. “The state, the taxes and tax burdens are completely different. Virginia taxes are much lower, therefor the limits are not needed. Limitations tie the hands of the people who are elected to (make) the decisions, and that’s not a good thing.”

The municipal league, established in 1905, is statewide, nonprofit, nonpartisan group that works to assist local governments “through legislative advocacy, research, education and other services,” according to its website.

Fields acknowledged that local taxes Virginians send to cities and counties are high compared to the state taxes they also pay.

And, she was not alone is standing against tax and expenditure limits. The population-plus-inflation formula used to determine the limitations is a recipe for disaster, said Michael Cassidy, president of The Commonwealth Institute for Fiscal Analysis.

The institute is a liberal organization that provides “nonpartisan analysis of fiscal and economic policies and their implications for all Virginians, especially low- and middle-income residents,” according to its website.

“These rigid formulas have an impact on taxpayers,” Cassidy said. “They lead to steps backwards in education, health care and contributes to the states’ decline of businesses. These kinds of limits would be a recipe for disaster for Virginians. They would impose really serious problems on the state.”

Kellner disagreed.

“If done properly, they will not only limit spending, but that tax revenue in many cases will be returned to the taxpayers, its their money and if we don’t need to spend it they deserve it back,” he said.