A long-delayed state budget deal received Gov. Glenn Youngkin’s signature on Thursday.
“(Virginians) waited a long time for this day, too long candidly,” said Youngkin, speaking from the Capitol steps in Richmond. “But we came together; we got it done.”
After months of wrangling and political negotiations, state lawmakers approved a deal Sept. 6 that includes about $1 billion in tax reductions and boosts K-12 education funding by about $650 million.
It includes a one-time tax rebate of $200 for individuals and $400 for joint filers, and increases the standard deduction by $500 to $8,500 for single filers and by $1,000 to $17,000 for joint filers.
The budget deal also lifts age restrictions on tax exemptions for veterans’ pensions and reinstates an annual three-day sales tax holiday that had lapsed this year.
The roughly $650 million in new spending for K-12 education and school divisions comes amid a report from the Joint Legislative Audit and Review Commission stating Virginia school divisions receive less K–12 funding per student than national and regional averages. The bulk of that money ($418 million) is targeted toward fighting learning loss and chronic absenteeism, while $152 million will support the hiring of more support staff and teachers.
Youngkin, flanked by his wife, Suzanne, and Attorney General Jason Miyares, thanked legislators for their efforts.
“We came together around common sense to lower the cost of living and provide tax relief to Virginians, to jump start job growth and fundamentally empower parents and restore excellence in education,” he said.
Virginia passed a two-year budget in 2022. The legislature this year was tasked with weighing a series of amendments, but negotiations went into overtime due to clashes over Youngkin’s proposed tax cut package.
The governor initially pushed for more extensive cuts, including lowering the corporate income tax rate from 6% to 5%. House Republicans backed his plan, while the Democrat-held Senate wanted to nix the cuts — particularly the corporate tax cuts — and give about $1 billion to fund school divisions.
The final budget agreement also included $12.3 million to help the Virginia Employment Commission address problems with its support call centers and unemployment appeals backlog.
The agency was at the center of a class-action lawsuit in 2021 alleging “gross failures” in providing residents with unemployment benefits throughout the pandemic. A judge issued an order directing the agency to make various changes and closed the case last year after seeing improvements.
However, several legal aid organizations have raised concerns that claimants continue to face serious communication barriers with the agency, as well as one of the lengthiest wait times in the nation for an appeal.
Additionally, the budget deal included funding to create an ombudsman position for the Virginia Department of Corrections. Prison reform advocates have said the role is needed to conduct inspections and handle concerns from prisoners, family members or the department’s employees.
Budget deals are handled by a handful of legislators led by House Appropriations Committee Chair Barry Knight and Senate Finance and Appropriations Committee Chair Janet Howell and Co-Chair George Barker. Most of their discussions take place behind closed doors.
In a statement Thursday, Barker said the deal will benefit Virginians.
“We added almost two-thirds of a billion dollars to schools as they are working to help students who have suffered from learning loss regain achievement,” said Barker, a Democrat from Alexandria. “The budget also provides a badly needed extra $200 million for mental health support and increased support for public safety.”
Sen. Tommy Norment, a longtime legislator who is no novice to budget talks, previously said that this year’s process stood out.
The Williamsburg Republican explained the state’s unusually large surplus led to more complex discussions.
“It’s been more of an ideological debate between the House and the Senate,” he told The Virginian-Pilot. “We have one group focusing on the principle of tax relief and the other focusing on what they consider prioritized spending. Much of the impasse over the months has been on trying to reconcile those two different philosophical approaches.”
Katie King, katie.king@virginiamedia.com
