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Lawmakers returned to Richmond on Wednesday to take up vetoes and legislative amendments from Gov. Glenn Youngkin and to bid farewell to another slate of colleagues set to retire by the end of the year. However, the legislature remained deadlocked over the proposed changes to the state’s biennial budget as the June 30 deadline inches closer.
“I think it’s still kind of a stall. We’re probably still where we left off when we adjourned in February,” said Del. Terry Austin, R-Botetourt County, a member of the budget conference. “I think we’re waiting to get through this veto session and then look ahead.”
The General Assembly in February adjourned its regular 2023 session without a deal on amending the state’s biennial budget after lawmakers failed to agree on about $1 billion in additional tax relief legislation that Youngkin had asked for.
But at least for now, budget negotiators are not in a hurry, said Del. Barry Knight, R-Virginia Beach, the chairman of the House Appropriations Committee.
“Nothing is going to happen quickly, and we’ve already got a budget. This is about the amendments only,” Knight said in a brief interview Wednesday. “We are going to do a budget, we’re committed to getting a fix on this thing, and we are going to make it happen. We’re just not in a rush. We just want to make sure to get it right.”
Before adjourning in February, the legislature passed a four-page stopgap measure to revise spending for some essential functions of the government as budget negotiations continue.
In the meantime, Knight has conferred on a regular basis with Sen. Janet Howell and Sen. George Barker, two Democrats from Fairfax County who co-chair the Senate Finance Committee. They are set to meet in person on the 13th floor of the Pocahontas Office Building in Richmond’s Capitol Square on Thursday.
“Right now we are in a wait-and-see mode, especially with the way the banking situation is, and we need to make sure that our inflation and job employment numbers are staying the same,” Knight said.
“We’re also looking at interest rates. There has been a little volatility in the stock market, but it appears to be going up now. So we’re looking at the banking crisis, and the sustainability and all the numbers to make sure that our revenues are going to be consistent.”
But with every week that goes by without an amended state budget, Youngkin is unable to take credit for additional tax cuts in a year when all 140 seats of the legislature are up for reelection.
“All parties are well aware of where the governor stands,” Youngkin spokeswoman Macaulay Porter said Wednesday. “He’s been clear that with $3.6 billion in surplus resources, we can cut taxes and invest in key priorities like behavioral health priorities. He looks forward to working with legislators to get this done for Virginia.”
In December, Youngkin rolled out his amended budget proposal, which included another $1 billion in proposed tax cuts and a $230 million package to overhaul the state’s behavioral health system. The money committees released their proposed amendments to the budget in early February, and both the House of Delegates and the state Senate passed their individual budget bills.
Most of the disagreements center around Youngkin’s push for more tax relief, as Democrats believe that last year’s historic investment of $3.5 billion in cuts and rebates was more than enough. They also made clear that Youngkin’s proposal to cut the corporate tax rate from 6% to 5% would be off the table.
However, some Democrats have signaled openness to approving another round of one-time tax rebates after the legislature approved millions in rebates worth up to $250 per taxpayer last year, and both the Senate and the House are pushing for an additional 2% pay raise for public school teachers, who receive a 5% raise under the current budget.
“The reality is we did over $4 billion in tax cuts and rebates last year, and we desperately believe we need to be paying our teachers at least the national average,” Del. Sam Rasoul, D-Roanoke, said in an interview Wednesday.
“Funding mental health is a priority that has been chronically underfunded for decades. That is really where our focus needs to be while we have an opportunity to actually make these investments. This is what people are asking for, and that’s where I would like for the money to be spent,” Rasoul said.
The amended House budget also includes $55 million for the construction of a new inland port in Southwest Virginia, a $150 million allocation to complete the widening of Interstate 81 between exits 143 and 150 in the Roanoke Valley, and $14.7 million to begin the planned transformation of Catawba Hospital into a state-of-the-art campus offering substance use disorder treatment and addiction recovery.
“We’re certainly keeping an eye on Catawba, and we would love for the funding to continue,” Rasoul said. “We’ve had great bipartisan support for sure. Hopefully they’ll come to an agreement on what to do with the revenues and the rest of the surplus. But these are some critical investments in mental health and substance abuse disorder, and some other funding in education that we desperately need.”
Theoretically, the state would remain funded even without a deal on budget amendments. But some lawmakers believe that this would set a bad precedent.
“It is important to pass a budget, even though it is in the second year of the current budget,” said Del. Israel O’Quinn, R-Washington County, the deputy House majority leader. “It feels like it gets us closer to being like Washington, D.C., where they just don’t worry about passing a budget. It’s important to get a budget produced, and I think that’s what the conferees are working towards.”
And with the clock ticking, lawmakers from both sides of the aisle are eager to take more legislative victories back to their home districts in time for their primary campaigns — something that leadership in both chambers is aware of.
Two weeks before the legislature adjourned in February, House Speaker Todd Gilbert, R-Shenandoah, urged budget conferees from both parties to get to work as soon as possible. Gilbert expressed concern that the partisan stalemate in the legislature will unnecessarily drag out negotiations over the amendments.
“It is my sincere hope that you will now be able to proceed expeditiously and convene negotiations so the General Assembly can fulfill our constitutional duty and present a budget bill to the Governor before the current regular session ends on Feb. 25,” Gilbert said in the letter to the money committee chairs.
The critical deadline for the budget to be approved and amended is June 30, when the state’s current budget year ends.
Last year, the General Assembly adopted the conference reports for the state’s biennial budget for fiscal year 2022-24 on June 1 — four weeks before deadline and almost three months after adjourning its regular session.
Knight, the House Appropriations chair, said Wednesday that this could be a realistic date for a compromise for this year as well.
“That’s probably a good timeframe. I honestly don’t see it happening before then,” Knight said. “Everything is a compromise, and for me to give them some stuff, they’ve got to give me some stuff. I’m willing to come to them, and I just need them to come to me a little bit.”