The State Capitol. Photo by Markus Schmidt.

RICHMOND – Lawmakers are set to return to Richmond on April 4 after Gov. Glenn Youngkin on Wednesday called for a special session that would ring in the legislature’s second attempt at completing the state’s biennial budget. The General Assembly had adjourned its regular session on March 12 with about 50 bills still lingering in conference. 

Instead, both houses passed a resolution allowing them to approve conference committee reports on bills – including the budget – in a subsequent special session. 

Under Virginia law, the budget must be finalized at least 48 hours before July 1, when it is set to take effect. However, it isn’t in Youngkin’s interest to allow the legislature to drag this out longer as several of his key campaign promises remain unfulfilled unless they are adopted in the budget. 

  “Between high gas prices and rising inflation, Virginians are more squeezed than ever and the General Assembly can deliver much needed tax relief to struggling Virginia families,” Youngkin said in a statement. “Together, we can produce the biggest tax cut in the history of the commonwealth at a time when Virginians need it the most and also make record investments in our education, law enforcement and behavioral health system, among other important priorities. Let’s get back to work.”

A $3 billion gap still separates the spending bills of both parties, with most disagreements relating to different versions of tax relief proposals, including legislation seeking to eliminate the 2.5% tax on groceries and essential personal hygiene products, which passed the House of Delegates by a 80-20 vote in February. The latter had been a staple during Youngkin’s bid for governor last year.

In his own budget, outgoing Gov. Ralph Northam in December proposed slashing the state’s 1.5% portion of the grocery tax while retaining the 1% portion that benefits local governments to fund schools. But Republicans prefer House Bill 90, a measure sponsored by Del. Joe McNamara, R-Roanoke County, that would do away with the entire tax rate. To make up for the local allocation, McNamara has suggested using the state’s general fund to pay for local school construction, among other propositions. 

Youngkin is also pushing lawmakers to double Virginia’s standard reduction and offer tax rebates of $300 for individuals and $600 for married couples, and he is proposing a three-month gas tax holiday, suspending the state tax of 26.7 cents per gallon for gas and 27 cents per gallon for diesel fuel as Virginians struggle with climbing fuel prices. 

Additional bills still being weighed by the budget conference is House Bill 563 by Del. Israel O’Quinn, R-Washington County, which would create a competitive matching grant fund and program that would provide up to $2 billion in bonds to help localities repair aging and crumbling schools. The program would award matching grants on a competitive basis to local school boards that demonstrate poor school building conditions, commitment, and need, in order to fund the construction of new public school buildings in these local school divisions. 

The bill was  amended to require unobligated state gaming proceeds be directed to the construction fund for the purpose of awarding grants to local school boards – a recommendation made in a Senate Bill 473 sponsored by Sen. Jennifer McClellan, D-Richmond, which the Senate conformed with O’Quinn’s House measure.  

Budget conferees also will be weighing a proposal that would make available $11.4 million in state funding for the victims of the major flood that destroyed dozens of homes in Buchanan County in August. The allocation is based on legislation sponsored by Del. Will Morefield, R-Tazewell County, that initially sought to create a designated fund for flood victims using money from the Regional Greenhouse Gas Initiative, a cap-and-trade program that has brought more than $227 million to Virginia. But just one day after Morefield filed his House Bill 5, then-Gov.-elect Glenn Youngkin said that he would withdraw Virginia from the Regional Greenhouse Gas Initiative via executive order, jeopardizing Morefield’s plan.

Also in limbo remains the fate of House Bill 105, sponsored by Del. Sam Rasoul, R-Roanoke, that would direct the Department of Behavioral Health and Developmental Services to study the feasibility of transforming Catawba Hospital into a state-of-the-art campus offering substance abuse treatment and addiction recovery passed with unanimous support in the House last month. 

The bill unanimously passed the House but was defeated in the Senate, where the Rules committee continued the proposal to the 2023 session. However, Del. Terry Austin, R-Botetourt County, a member of the House Appropriations Committee, said that the panel has allocated $1 million in their spending plan to pay for the Catawba study, which would be a workaround if approved in conference.

Markus Schmidt

Markus Schmidt is a reporter for Cardinal News. Reach him at markus@cardinalnews.org.