Budget Update

While it took a few extra months to get it done, we finally have a budget that is close to the finish line. Wednesday the General Assembly headed back to Richmond to take up the vote on the final budget conference report. It was approved with overwhelming bipartisan majorities in both chambers and will now head to the Governor to sign or offer any amendments he feels may be necessary. I supported this budget because it is structurally sound, funds key priorities, and provides much needed tax relief.

Tax Relief
With Virginia families struggling with the effects of record inflation, meaningful tax cuts were a key priority for the House and Governor Youngkin. While there was some compromise with the Senate on this front, on the whole I believe the final product is closer to the House position. This budget provides over $4 billion in tax cuts – which amounts to just over $1100 in tax relief for the average family of four per year. Some of the highlights include:

A near doubling of the standard deduction on the state income tax to $8,000 for individuals and $16,000 for joint filers.
A tax rebate check later this year that will be $250 per individual and $500 for joint filers
The elimination of the 1.5% state sales tax on groceries starting January 1.
It exempts the first $40,000 of veteran retirement pay from state income tax, phased in over 4 years.
It ends the accelerated sales tax gimmick that unfairly penalizes small businesses and retailers. This is something I have fought to eliminate for a number of years through both legislation and budget amendments.

Education
The budget includes record investment in k-12 education. With a 20% boost in spending for our schools, this results in the highest K-12 budget ever, even when adjusting for inflation. For higher education, there is support to hold down tuition increases to no more than 3%, along with additional targeted financial aid for undergraduate students. Some of the particulars include:

Up to a 5% salary increase for school employees each year of the biennium, along with a $1,000 bonus in December with no local match requirement for the bonus.
Through a combination of grants and loans, this budget will leverage over $3 billion for school construction and renovation. While historically construction was the sole responsibility of the locality, this has been widely recognized as a significant need for some time.
An additional $45 million set aside for the school resource officer grant program.
On the local higher ed. front, I’m pleased that our effort to secure substantial additional support to address JMU’s per-pupil funding disparity was also included to the tune of $12 million over the biennium.

Public Safety
This budget invests heavily in our law enforcement in terms of training and equipment, as well as compensation. It also supports violence intervention efforts, including Operation Ceasefire. Some of these highlights include:

Almost $200 million for targeted compensation initiatives for the State Police, correctional officers, deputy sheriffs and regional jail officers. With so many of these essential public safety agencies being chronically understaffed with vacancies, this represents some serious investment – a 20-40% boost in compensation for many.
$47 million additional in “599” funding to support local police
$13 million for violence prevention efforts, with $5 million of this directed specifically to the Operation Ceasefire program. This is legislation I carried with the support of the Governor and Attorney General and I’m glad to see that funding for the program has made it into the budget.
$75 million in ARPA funds for one-time grants to local law enforcement to support equipment purchases and training.

Health
Similar to law enforcement, there is a workforce crisis in many healthcare related fields, particularly in the areas of public behavioral health and community based providers to serve the disabled and other vulnerable populations. This is one area where I would like to have seen us go even farther and I carried budget provisions to do so. Even so, the additional resources included to support our front-line healthcare professionals is still significant.

Roughly $544 million to support and maintain rate increases for various waiver services, such as the developmental disability waiver and consumer and agency directed care
An additional 600 developmental disability waiver slots in FY 2024
$50.5 million to fully implement the STEP-VA program in our Community Services Boards to better meet the needs of those struggling with mental health challenges
My amendment to provide an additional $850,000 each year of the biennium for our centers for independent living was also included.

Other Highlights
While the Commonwealth is experiencing record revenues, this budget hedges against future downturns by directing much of the additional spending to one-time investment needs and bolstering our savings.
Based on various additional deposits, Virginia’s cash reserves will reach $3.9 billion
Includes an additional $750 million payment to VRS with an additional $250 million deposit if revenues remain strong to continue to improve the funded status and keep rates low
Takes on no new debt, and instead switches some previously approved bond projects to cash.
Among the other amendments I put forward this year, $4.8 million was included for the Shenandoah Valley Battlefields National Historic District specifically for infrastructure improvements at various battlefields across the Valley to increase tourism at these sites, and ultimately bring in additional tourism dollars for localities and the Commonwealth.

While this touches on some of the major policy areas, if you have any questions about the budget or if my office might be of any assistance, please don’t hesitate to reach out. You can call 540-208-0735 or email [email protected]