RICHMOND, Va. (CN) — After a bumpy process, Virginia's Democrat-controlled legislature and Republican governor passed a budget Monday, albeit a month late.
"We, in fact, listened to one another," Governor Glenn Youngkin said before signing the spending plan. "We understood each other's priorities and perspectives. And that came together in the budget."
It took a special reconvene session and an extra month for Youngkin and the General Assembly's budget negotiations to find peace in the valley. The $188 billion spending plan includes no new taxes, no additional tax relief and a record $2.5 billion investment in K-12 education. The budget passed with 134 lawmakers voting yay and six Republicans voting no.
"When you look at that budget, the budget seeks to cover the whole Commonwealth and address the needs of the whole Commonwealth," Delegate Luke Torian, a Democrat and budget negotiator, told reporters.
With no new taxes, lawmakers credit better-than-expected state revenues for the leeway needed to fund shared priorities. The state will carry $499 million from the existing budget for fiscal year 2024, swap $468 million of cash to debt for capital projects and save money from failed legislation like Democrats' effort to raise the minimum wage, which would have cost the government $80 million.
"I think underpinning it all has been the real strength of the Virginia economy," Youngkin said. "With record job growth, more Virginians working than ever before, tremendous investment around large businesses and small ones that have come together to generate record revenues for the Commonwealth."
The Commonwealth Institute for Fiscal Analysis said in a statement that reliance on excess revenue is unsustainable compared to modernizing the state's tax code to reflect the current economy.
"You always know that there's an ebb and flow in the economy," Torian said. "So we're responding to what we've been given."
Democrats proposed expanding the sales tax to include digital goods and services. Youngkin, meanwhile, was looking for ways to offer $1 billion in tax relief by reducing the income tax, but the final budget will keep Virginia's tax code as is.
Youngkin's concession of no additional tax relief came with a price. Democrats agreed to scrap language from the original budget that would require Virginia to rejoin the Regional Greenhouse Gas Initiative.
The initiative is a multistate market-based program to reduce greenhouse gas emissions by trading carbon emissions credits. In a move still being litigated, Youngkin circumvented the legislature's approval and removed Virginia from the initiative, citing the increased cost of utilities for consumers.
"RGGI's one of our best tools to fight climate change," Delegate Richard "Rip" Sullivan said on the House of Delegates floor. "Withdrawing from RGGI has always been an awful idea."
Part of the education funds include 3% teacher pay raises each fiscal year.
"Education is the cornerstone of our future, and this budget makes historic investments in both K-12 and higher education," Senate Democrats chair Mamie Locke said in a statement. "By dedicating over $2 billion in direct aid to K-12 schools and significantly boosting funding for colleges and universities, we're ensuring that every student in Virginia has access to top-tier education."
Mental health was a priority for both parties.
"This budget prioritizes the wellness of all Virginians by making substantial investments in behavioral and mental health services," Senator Creigh Deeds, a Democrat, said in a statement. "These initiatives ensure that mental health support is available to every Virginian, no matter where they live."
The budget passage came after a myriad of disagreements between the two branches. Youngkin sought to move the Washington Wizards and Capitals to a new arena in northern Virginia, but Senate President Pro Tempore Louise Lucas, used her authority to prevent a vote on the project. Lucas cited public cost, lack of labor protections for the 30,000 or so construction workers, and the risk of using bonds backed by state and city governments as reasons for opposing the stadium.
In the aftermath of his arena plan's demise, Youngkin added to his record-setting amount of vetoes, giving the boot to both a retail cannabis market and a minimum-wage increase, frustrating Democrats.
Virginia operates under a two-year biennial budget cycle. Each year, the governor prepares the proposed budget bill for introduction by the General Assembly. Those bills are adopted in even-numbered years and amended in odd-numbered years. The budget ping-pongs back and forth between the governor and the General Assembly.
Lawmakers sent Youngkin a proposed budget that enjoyed a bipartisan vote of 62-37 in the House. Following the conclusion of the General Assembly in March, the governor traveled on a press tour around the state, calling the proposed budget backward, before submitting 230 amendments to the plan.
The extensive amendments gave legislators a tall task for their mid-April session, which was initially slated to be when the General Assembly passed the budget. Using a procedural maneuver agreed on by the General Assembly and Youngkin, the House voted to kill the governor's budget amendments and cleared the path for a special session on May 13.
"All of us stopped for a moment and really listened to what is a collective set of priorities across the General Assembly and across the governor's office," Youngkin said.
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