The Backward Budget Moves Forward

The Backward Budget Moves Forward

Breaking news from Richmond – the biennial state budget has been passed and signed into law. We reconvened for a single-day special session on Monday to vote on a compromise budget agreed to by the Governor and General Assembly leaders. As you may remember, this budget is essentially the same one that the Governor blocked and called “backward” during his press tour in April. In reality, this budget provides record investment in the Commonwealth’s education and health care systems, helping all working families to keep Virginia moving forward.

With this budget deal, our Democratic leaders successfully averted a potential government shutdown. They rejected regressive taxes that would have impacted working families while preserving all critical spending allocated in the conference budget for programs important to our constituents. 

This budget will invest $2 billion in our K-12 schools and boost opportunities at colleges and universities by over $700 million. Additional funding will be provided to the At-Risk Add-On, which supports economically disadvantaged students, and support for English language learners will increase by $70 million. Teachers and other school staff will receive a 3% salary increase each year, for a total of a 6% increase. $175 million will be provided to the Virginia Housing Trust Fund to support the creation and preservation of affordable housing in the Commonwealth.

As highlighted in my recent column on mental health, this budget prioritizes mental healthcare. The budget allocates $58 million to expand and modernize Virginia’s comprehensive crisis service systems. $10 million will be provided to the Virginia Mental Health Access Program, which addresses shortages of pediatric mental health specialists. $12 million is allocated for child psychiatry and children’s crisis response services, and $5 million for school-based mental health integration grants. Additionally, this budget fully funds insurance forecasts for low-income Virginians and children, adds 3,440 Medicaid developmental disability (DD) waiver slots, and provides millions in funding for community health workers in local health departments.

I am especially pleased to report that all of my efforts included in the General Assembly’s conference budget were fully funded! These initiatives include $144.7 million to the Washington Metropolitan Area Transit Authority (WMATA), $5 million for a pilot program to assist residents of a manufacturing home park and nonprofits in purchasing at-risk parks, $860,000 for a Northern Virginia firefighter cancer screening program, and $500,000 over the biennium to support an African American Research Fellowship at Mount Vernon requested by the community-based charity, Black Women United for Action.

This budget does not include any of the tax cuts directed at wealthy individuals or corporations that the Governor originally called for in his December 2023 proposed budget. Additionally, this budget does not include any tax increases. Explained to the General Assembly and the general public during the Appropriations budget briefing, changes and modernizations to Virginia’s tax policy, including going forward with the Governor’s digital tax proposal, were found unnecessary for the time being because the Commonwealth’s economy is so robust. Since December, the Commonwealth’s revenue collections have been far stronger than anticipated – approximately $1.12 billion over projections – and all components of the original Conference Report spending package through fiscal year 2026 can be fully funded without any tax policy adjustments. Furthermore, analysis of the six-year financial plan indicates that these funding levels could be sustained through 2030 without modernizing the tax system. Nevertheless, tax code modernization will likely be addressed in next year’s session. 

However, I am disappointed that Virginia’s participation in the Regional Greenhouse Gas Initiative (RGGI) was left out of the budget agreement. Virginia’s participation in RGGI was unlawfully repealed by the Governor last year as the Clean Energy and Community Flood Preparedness Act, which passed in 2020 and is still enacted law, requires Virginia to participate in RGGI. Despite this, numerous wins for the environment remain in the budget like funding to study tree loss and expansions to tree canopies, investments to the Community Flood Preparedness Fund, water waste treatment plant upgrades, and oyster restoration. 

I agree with the Governor when he mentioned earlier this week that this budget must be a good compromise if everyone is a little unhappy with the outcome.