After six-month delay, Virginia General Assembly passes budget bill
‘Compromise’ legislation awaiting approval from Youngkin would provide tax rebates and major education, mental health spending
Sen. Janet Howell, D-Fairfax, one of Virginia’s chief budget negotiators, talks about the General Assembly’s 2023 deal in Richmond Sept. 6. (Sarah Vogelsong/Virginia Mercury)
The Virginia General Assembly passed long-delayed amendments to the two-year state budget Wednesday, ending a six-month stalemate and sending the document to Republican Gov. Glenn Youngkin for his signature.
The budget deal, which many in Richmond had worried would not be reached after negotiations briefly collapsed in July, combines major short-term tax reductions with significant one-time and ongoing spending on priorities such as education, behavioral health and pollution reduction investments.
“There are things in this budget to like, and there are of course things that we may not like, we may not embrace,” said Sen. Barbara Favola, D-Fairfax, Wednesday. “But this is a compromise document, and that is the definition of a compromise: give and take.”
Sen. Steve Newman, R-Bedford, called the final agreement “probably as fiscally responsible a bill as I’ve ever seen.”
While Republicans praised the plan’s emphasis on one-time spending — including almost $420 million in flexible payments to school divisions, $200 million to programs to prepare sites for industrial development and $58 million for expansion and modernization of state crisis services facilities — Democrats applauded its reliance on one-time tax relief in the form of rebates rather than longer-term tax cuts.
“This budget is a bipartisan, bicameral compromise,” said Del. Barry Knight, R-Virginia Beach, who along with Sens. Janet Howell, D-Fairfax, and George Barker, D-Fairfax, served as chief negotiator on the agreement. “Nothing is one-sided around here.”
House Minority Leader Don Scott, D-Portsmouth, struck a more partisan tone in a speech that leaned heavily on Democratic campaign issues like abortion and criticized earlier proposals from the Republican-controlled House that would have cut the state’s corporate tax rate, a plan Knight has said the chamber dropped early in negotiations.
“Virginians cannot afford to fund any outrageous or aggressive tax breaks the MAGA extremists wanted to suggest we can to big corporations,” Scott said.
The most significant area of debate Wednesday concerned a procedural resolution put forward by leadership of both the Republican House and Democratic-controlled Senate that forbade any consideration of amendments to the budget deal, full details of which were first released Saturday.
Several members of both parties voiced concerns about the precedent the resolution might set for future debate about the state budget.
“Is this now the accepted way that we do things?” asked Sen. Bill Stanley, R-Franklin. “We just wait until session is over and a gentle few of the chosen go inside and make those decisions for themselves, and then come out and say, ‘Here it is! And oh, by the way, you can’t amend it, you can’t participate for your constituents. You have to vote up or down.’”
Sen. John Cosgrove, R-Chesapeake, argued that resolutions can be put forward during any session to change the procedures the chambers follow.
“We should have had a budget months ago,” he said. “We should have done the people’s work months ago. We have the opportunity now to vote on this resolution so we can pass a budget.”
Following the passage of the bill Wednesday, Democrats sent out press releases characterizing the deal as a Democratic victory over what the Senate caucus described as “Governor Youngkin’s ill-advised, nearly $1 billion tax giveaway plan.”
“Democrats fought tirelessly to preserve funding for crucial services such as public education, healthcare, mental health services, and affordable housing,” the caucus wrote. “We believe that a budget is a reflection of our values and priorities, and this budget gives our children the resources they need to succeed.”
House Republican messages meanwhile portrayed the tax provisions as providing “relief for Virginians struggling with rising costs of everyday expenses due to failed federal policies” and sharply faulted Democrats for not accepting a proposal to adjust the state’s tax brackets.
“Had Senate Democrats not been terrified of their primary voters, we could have made historic reforms to our income tax system that would have put more money back into the pockets of those who need it most,” said Speaker Todd Gilbert, R-Shenandoah, in a statement. “Those who make minimum wage don’t belong in Virginia’s highest tax bracket.”
In July, Knight said a preliminary deal the two parties reached earlier in the year would have updated the more than three-decade-old brackets, although some Democrats said they hadn’t heard about the offer until the summer. A state report released in November found that since 1990, the state’s median income rose 108% but taxes owed by single filers making the median income went up 173%.
At the time, Del. Joe McNamara, R-Salem, who previously introduced legislation to begin indexing the tax brackets to inflation, said he thought the General Assembly would either focus on adjusting the brackets or increasing the standard deduction but wouldn’t have “an appetite to do both.”
This year’s budget deal temporarily raised the standard deduction for the second time in two years, pushing it to $8,500 for individuals and $17,000 for joint filers.
The budget will now go to Youngkin for his signature.
“While the process took longer than needed, more than $1 billion in tax relief is on the way to Virginia veterans, working families and businesses,” the governor said in a statement following the bill’s passage. “Additionally, this collaborative effort ensured the funding of our shared priorities: investing in students and teachers, supporting our law enforcement community and transforming the way behavioral health care is delivered in the Commonwealth.”
Mercury reporter Charlie Paullin contributed to this story.
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