RICHMOND, Va. (WRIC) — Virginia is cutting taxes on groceries and certain personal hygiene products, but shoppers will have to wait until next year to see savings in the check-out line.
The delay comes as inflation is straining budgets. According to the latest federal data measuring prices in May 2022, the cost of food at home rose 11.9% since the same time last year — the largest 12-month increase in more than four decades. The increase spanned all six major grocery store food groups.
“I’m suffering. Everybody is suffering with me,” said Lakeena Pulliam, a mother of five, who was out grocery shopping on Monday. “It would be great if we could get some help now, but better later than never, I guess.”
On Friday, the General Assembly finalized a pair of budgets and voted on a legislative compromise to solidify a long-term cut to the state’s 1.5% sales tax on groceries and personal hygiene products, including tampons and diapers. That’s $1.50 saved for every $100 spent.
However, Virginians won’t see a difference on their receipts until January 1, 2023, under the timeline that lawmakers agreed to.
Delegate Mark Keam (D-Fairfax) said budget negotiations lasted longer than normal and stakeholders needed more time to implement the changes.
“It would be unfair to tell our retailers and all of our government agencies this goes into effect immediately and then expect that they would turn everything around,” Keam said. “It takes them a while to program their computers, make sure all their cash registers and their online sales systems are up and running. That’s why they asked for at least a few months.”
Delegate Joseph McNamara (R-Roanoke), who sponsored the bill, said the version that initially passed out of the House had a July 1 effective date and cut the entire 2.5% grocery tax, an approach favored by Gov. Glenn Youngkin. McNamara said delaying enactment and allowing localities to keep an optional tax of up to 1%, as former Gov. Ralph Northam advocated for, was part of their compromise with the Senate.
“With a full reduction in the grocery tax it would save $300 a year, an average family of four. With it scaled down a little bit, it would be closer to about $200 dollars per year but, as I mentioned, next year we can go back and we can finish the job,” McNamara said.
Complicating that effort are questions surrounding how revenue will be replaced. Throughout the lengthy legislative debate, localities raised concerns about losing an important funding source.
“Our local jurisdictions need to have some autonomy and the ability to make decisions for themselves,” said Senator Jennifer Boysko (D-Fairfax), who sponsored the Senate bill alongside several Republicans.
When the tax cut takes effect, state funding that currently supports K-12 education at the local level will be replaced through the budget. Keam said that commitment was also included in the legislation, meaning it will continue to be backfilled after the spending plan expires unless the language is repealed in the future.
Notably, there is currently no set plan to replace grocery tax revenue that goes toward transportation. That was a deal-breaker for Delegate Danica Roem (D-Manassas), the only legislator who voted against the compromise on Friday.
“The reason I have thrown a fit about this and put myself up on the board as the one person is because this is too important. This is far too important an issue for us to just let it go because it’s such a politically popular vote to take,” Roem said during a floor debate. “We need to put ourselves on record of making sure, when we take a hit on something as significant to our constituent’s safety as transportation, that we come back and we do it right.”
Keam said the loss won’t derail any current projects, which are funded years in advance. He expects lawmakers will find a solution next year, before it has a meaningful impact.
“I’m not only hopeful but I’m pretty confident that this is an issue that will be resolved by next year,” Keam said.
Boysko said she included a January 1, 2023, effective date in her original bill, which was solely focused on eliminating the tax on menstrual products, to make it more palatable to budget negotiators. She said the delayed enactment was maintained after it was combined with the grocery tax bill, even though she personally never fought for it.
“There are girls and women who have to make choices about going to school and going to work some days because they can’t afford the products,” said Boysko, who first introduced a bill to eliminate the menstrual tax in 2017. “It has been through many painful years of consideration and I’m thrilled to finally have it passed.”