McAuliffe, Youngkin swap bogus tax and spending claims

PolitiFact VA: As election closes, McAuliffe and Youngkin continue debunked claims

In the closing week of Virginia’s gubernatorial campaign, both major-party candidates are repeating debunked claims about the other’s tax policies.

Democrat Terry McAuliffe and Republican Glenn Youngkin are using the same campaign trick: citing partisan reports that misrepresent the other’s fiscal policies. 

McAuliffe is making an outdated claim that Youngkin would eliminate 43,000 teachers. Youngkin is saying McAuliffe would raise family taxes by $5,400 even though McAuliffe’s campaign has said he will not raise taxes.

"Independent reports have said that [Youngkin’s] plan would cut 43,000 teachers here in Virginia," McAuliffe said at an Oct. 26 rally in Arlington headlined by President Joe Biden.

McAuliffe has been making this claim since mid-September, when three liberal groups issued reports on Youngkin’s budget plan: the Virginia Education Association, Center for American Progress Action Fund and Virginia Excels.

All of the reports were outdated when they were published. Youngkin said in April that he was working on a plan to eliminate the state income tax. The studies were based on the assumption that he would repeal the tax, which provides about 70% of the state’s funding to public schools, public safety and health programs. Each of the reports said that would translate to about a $5 billion-a-year cut to public schools.

The problem is that Youngkin is no longer calling for the end of the income tax. In August, he settled on a more modest plan that would double the standard deduction for state income tax returns. 

The difference between the two plans is huge. Ending the income tax would cost the state $15.7 billion a year. Doubling standard deductions would cost about $1.2 billion in the first year and $875 million a year afterwards, according to a "very ballpark estimate" by Anne Oman, staff director of Virginia’s House Appropriations Committee. 

In other words, the loss of revenues forecast in the reports is roughly 13 times higher than the cost of Youngkin’s plan during its first year and 18 times higher after that. Youngkin’s plan would still leave a hole in the general fund that pays for education. He is promising to increase funding for schools although he’s offered few details.

The forecast that Youngkin would lay off 43,000 teachers comes from the report by Virginia Excels. To grasp the enormity of this claim, consider that Virginia had 105,000 public school teachers last year. McAuliffe, in citing the outdated report, is saying Youngkin plans to cut 40% of teachers.

The executive director of Virginia Excels is Taikein Cooper, the chair of the Prince Edward County Democratic Party. The organization’s website lists only Cooper as its "team." Cooper did not respond to our emails. He has contributed $1,278 to Democratic candidates this year, including a $150 donation to McAuliffe, according to the Virginia Public Access Project. He has given no money to Republicans.

The Republican Party of Virginia has filed a complaint with the IRS alleging Virginia Excels violated its tax-free status by issuing the report, which it calls "a blatant partisan political campaign activity."

We asked McAuliffe’s campaign why McAuliffe continues to make claims based on the debunked report and did not get an answer that addressed our question.

"Terry McAuliffe’s plan would raise your taxes $5,400, the largest tax increase in Virginia’s history," Youngkin says in a TV ad released Oct. 22. He launched a similar ad earlier in October and has been making the same claim at rallies across the state. 

Younkin sources his claim to a Sept. 18 article posted on Yahoo News with the headline, "McAuliffe plans could cost each Virginia family $5,400: Report." But, as The Washington Post has reported, this is a ruse. The article was by a reporter for The Center Square, an online source. 

The Center Square identifies itself as a "project" of the Franklin News Foundation, a Chicago non-profit that says it offers "timely, accurate and balanced statehouse coverage and statewide news coverage...as a public benefit." The Pew Research Center identifies it among a number of "ideological outlets" across the country trying to fill a gap in state news coverage as newspapers have cut staff.

The Center Square article attributes the $5,400 tax hike tax hike figure to a Sept. 15 report by the Thomas Jefferson Institute for Public Policy, a conservative Virginia research group.

But the report does not offer any estimate of a per-family tax hike under McAuliffe’s plan, let alone the eye popping $5,400 the article claims. That figure comes from Youngkin’s campaign, which took the study’s $8.3 billion price tag on McAuliffe’s plan over two years and doubled it to cover a four-year term. The campaign took the $16.6 billion total and divided it by 3.1 million households in Virginia.

Neither Youngkin nor the Center Square article mention that their $5,400 estimate of McAuliffe’s purported tax increase is a four-year cost. It would cost families $1,350 a year if the assumptions are solid, and some are not.

For example, the study says the priciest item on McAuliffe’s agenda is to allow collective bargaining for state employees and strengthen it for local government workers. It estimates the move would cost $940 million annually starting the first year of McAuliffe’s term. The report assumes state employees would receive 10% raises the first year and that teachers would see the same hike on top of a 6% increase needed for McAuliffe to keep his promise to raise their salaries to the national average.

The study improbably assumes that McAuliffe’s entire spending agenda would be fully approved during the first year of his governorship and Youngkin attaches the annual cost to each year of his term.

Another issue is that the report does not mention that McAuliffe’s campaign has been saying since July that McAuliffe will not raise taxes. No doubt, that would be a challenge. McAuliffe has a wide-ranging agenda that includes investing $2 billion of new money (his estimate) into public education and expanding Medicaid to cover 650,000 additional Virginians.

The author of the report, Jesse Lynch, disclosed in his study that he "is involved in a paid capacity with Republican members of Virginia’s General Assembly." He told us via email that he was unaware of McAuliffe’s no-new-tax promise when he wrote the study.

Lynch said, "If (McAuliffe) attempts to implement his entire plan, it will outpace Virginia's revenue increases. McAuliffe is either proposing policies he knows he will never implement, or he will have to find new revenue."

McAuliffe says new revenues through the advent of casinos and marijuana sales will help pay for his proposals. He also says he will draw in more federal dollars.

Beware of claims being made during the closing days of a tight race. If you hear McAuliffe or Youngkin describing the other’s tax and spending plans, cover your ears.