Amendments to Virginia’s budget made by House and Senate lawmakers include major changes to the version introduced by Gov. Glenn Youngkin in December — and will likely serve as a starting point for closed-door budget negotiations.
Lawmakers are expected to complete a floor vote to approve the plans this week.
“It’s horse trading,” said former Republican Gov. George Allen, who also faced Democratic majorities during his term in the 1990s.
Both the House and Senate committees in charge of appropriations ditched Youngkin’s proposed income tax cut, while increasing revenues by keeping the governor’s plan to tax digital goods — like streaming services or cloud storage. The Senate went further by removing an exemption from the tax for businesses that Youngkin wrote into his proposal.
The lion’s share of additional revenues in both legislative proposals went toward education. The Senate allocated $1.6 billion more than Youngkin and the House is planning for $940 million above the governor’s proposal, according to progressive group The Commonwealth Institute for Fiscal Analysis.
Big-ticket items in the legislative proposals and in Youngkin’s span business incentives and transportation, and are likely to be points of contention during the upcoming negotiations.
The House included $150 million for the Washington Metro, required participation in the Regional Greenhouse Gas Initiative, as well as public financing for an Alexandria arena — a key Youngkin priority.
Those items are not addressed in the Senate budget, which instead has $92 million set aside for toll relief in Hampton Roads and includes taxation of businesses’ digital services.
Both proposals include frameworks for a retail marijuana market, while also raising teacher and state workers’ salaries — although at different levels.
“The House and the Senate will pay attention to what the other body is doing,” said Bill Leighty who worked on budgets while staffing the Senate Finance committee and as former Gov. Mark Warner’s chief of staff. He said both bodies may leave out their own priorities to stake out negotiating positions.
Sen. Louise Lucas, who chairs the Senate Finance committee, said Virginia should stay in RGGI, a regional carbon market.
“I absolutely believe Virginia ought to be in RGGI. There’s no question in my mind,” she told reporters Sunday. “But you’ve got these … . Don’t make me use my shipyard language, please.”
At an event earlier this week, Youngkin declined to say what he would tell budget negotiators his priorities were.
“I will directly express some things that one, I am very appreciative of where we're coming together and other areas where I hope we can make more progress together,” he said.
Allen, who said he also faced legislators' demands in exchange for support of his own Northern Virginia economic development proposal, said Youngkin was wise to not publicly reveal his priorities.
“The more you let them know [that] you want this done, the more they can say, ‘Well, if you want us to support this, you're gonna have to support this, that and the other,’” he said.
Allen said he expected Youngkin to issue a “record amount” of vetoes.
Still, budget proposals from the governor and legislators have shared priorities — though they vary on funding, most notably for education and behavioral health.
Much of the additional education spending is for increasing teacher salaries. Youngkin proposed a 1% bonus in Fiscal Year 2025 and a 2% salary increase in FY26. The House proposed a 3.375% increase each year, conditioned on local matching funds and the Senate proposed a 3% raise each year with local matches. Youngkin’s education proposal would cost $175 million, while the House’s would cost $628 million and the Senate's would cost $525 million, according to TCI.
The Senate also removed a cap on state funding for support staff, putting $401 million toward the initiative. And the House and Senate both included nearly $400 million in funding for high-poverty schools.
Youngkin’s behavioral health initiative — Right Help, Right Now — also saw some proposed changes to reimbursement rates from House and Senate lawmakers for developmental disability waivers. The Senate kept the governor’s proposal for mobile crisis units and psychiatric emergency programs, while the House removed funding for the latter.
“I think we're heading in the right direction,” Youngkin said Tuesday, discussing the session’s behavioral health legislation. “I do believe that there is a universal belief that transforming our behavioral health system and being a national leader at a moment where there is a crisis across the country and across Virginia is critical.”
The budget amendments did not include additional money for Richmond’s combined sewer system, maintaining the $50 million Youngkin proposed for FY25.
