Gov. Glenn Youngkin will sign a pair of state budgets ceremonially on Tuesday at a produce market in western Henrico County, ending a sometimes combative six-month showdown with the General Assembly over taxes and spending priorities.
Youngkin won’t yet have the actual budget bills to sign into law, as the end of the current fiscal year approaches and the next two-year spending cycle begins on July 1. The assembly must first finish enrolling the bills in final form for the governor’s signature.
But despite some setbacks at the hands of the assembly last week, the first-year Republican governor is ready to celebrate a bundle of budget victories in his first encounter with a politically divided legislature that has tried to take advantage of his inexperience in government.
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“Today is a good day in Virginia!” Youngkin tweeted late Friday after the assembly adopted more than two-thirds of the 38 amendments he proposed to the revised budget for the current year and the $165 billion two-year spending plan.
Youngkin’s biggest trophy is $4 billion in cuts to state income and sales taxes. The tax-cut package was made possible by a record revenue surplus last year and likely another big one in the year that ends on June 30.
It also was fueled by his surprise election victory last fall, which prompted his Democratic predecessor, then-Gov. Ralph Northam, to include a more modest set of preemptive tax rebates and cuts in a parting budget. Northam delivered his budget proposal in December with Youngkin taking notes at his side in an unusual joint appearance before the assembly’s money committees.
The budgets that Youngkin will sign ceremonially on Tuesday include a nearly 80% increase in the standard deduction for income tax filers, which will reduce state revenues by $1.6 billion over two years, or about $500 million less than he had proposed in tandem with the Republican-controlled House of Delegates.
It also will include a partial repeal of the sales tax on groceries, exemptions for up to $40,000 a year in military retirement income, and one-time rebates of $250 for individual taxpayers and $500 for couples, as Northam had proposed, instead of the $300/$600 Youngkin sought.
But the budget will not include a temporary suspension of the state tax on gasoline and diesel fuel. The Democratic-controlled Senate rejected Youngkin’s efforts three times as a political stunt, saying it would do little to help consumers faced with $5-a-gallon gas prices, while undermining Virginia’s transportation system.
It also includes a boon to low-income working families who will be able to receive a refund of 15% of their unused Earned Income Tax Credit, a longtime Democratic priority that Republicans had blocked until House and Senate budget negotiators reached a compromise that the assembly adopted on June 1.
Youngkin quickly sought to use his latest loss on the gas tax to pin consumer anger on Democrats. He also has tried to court Black legislators and voters by boosting state support of historically Black colleges and universities, partly at the expense of financial aid for undocumented immigrant students who were born elsewhere but raised here after they were brought to this country as children.
The assembly allowed him to divert $10 million from the so-called “dreamers” to increase financial aid at HBCUs, even though the budget included up to $50 million in unappropriated money that could have paid for it.
In his Twitter statement on Friday night, Youngkin touted “a big win for our HBCUs” and the assembly’s approval of his budget to allow private colleges and universities, as well as community colleges and higher education centers, to compete for a limited pot of state dollars to pay for a network of lab schools that would offer alternatives to traditional K-12 education.
He did not mention that the Senate had killed his proposal to divert per-pupil public education money away from public schools to lab schools, or that it had rejected a vague proposal to give $1.6 million to the L. Douglas Wilder School of Government and Public Affairs at Virginia Commonwealth University to “research ways to increase opportunities for K-12 students” based on the administration’s guidelines.
The pointed inclusion of HBCUs for lab school funding exasperated Del. Candi Mundon King, D-Prince William, a graduate of historically Black Norfolk State University.
“Please stop using HBCUs for your political football,” King told House Republicans.
Youngkin also celebrated a new budget requirement for colleges and universities to adopt plans for “preserving free speech & diversity of thought on college campuses,” although it stops short of his proposal last month to require political diversity in hiring faculty.
Finally, the governor asserted that the assembly had made communities safer “by removing violent criminals’ ability to get off early and re-offend.”
The assembly approved his proposal to close an alleged loophole in a 2-year-old law to expand opportunities for prison inmates to reduce sentences for nonviolent crimes by earning additional “good time” credits. The amendment prevents those earned credits from reducing concurrent sentences for violent crimes, which will prevent the early release of more than 500 inmates this summer.
Youngkin did not mention raises of 10% over two years for state employees, teachers, college faculty and state-supported local employees — Northam included the money in his proposed budget — to take effect on July 10 for the Aug. 1 payday.