An increase in funding for disaster mitigation and recovery, a one-time bonus for state employees, bonuses for teachers and a one-time tax rebate were included in the final budget amendment proposal presented to the General Assembly by the conference committee Thursday.
The bill includes $100 million for flood mitigation and recovery. That includes $50 million for Hurricane-Helene related damages and to build houses to better withstand flooding in communities prone to high water. That is an increase compared to the $25 million proposed by both the House and Senate in their initial amendment proposals in early February. Another $50 million would be put into the Virginia Community Flood Preparedness Fund.
The roughly $69.5 billion spending bill also includes a one-time 1.5% bonus for state employees and a $1,000 one-time bonus for teachers, both to be paid out around June, and a one-time rebate of $200 for single and $400 for joint filers to be paid out during fiscal year 2026 to Virginia taxpayers. The tax rebate was proposed by both chambers in lieu of an effort proposed by Youngkin to do away with the much-hated car tax. The rebate would cost about the same as Youngkin’s plan: roughly $1 billion.
Del. Terry Austin, R-Botetourt County, has been a budget conferee for many years. This year, he noted, the process was expedited due to the shorter time frame lawmakers had — due to it being a short session year with three days shaved off of the start because of the water utility crisis that shut down much of Richmond in early January.
“The three days on the end would have really been nice to have had, but no one had the ability to control that,” he said. “We had to make time, it was pretty quickly done, but the budgets weren’t that far apart.“
An extension and an increase on Virginia’s current standard deduction has also been included in the conference report. The deduction, which is set to expire Jan. 1, 2026, is currently $8,500 for single taxpayers and $17,000 for joint filers. If passed, the deduction would extend until January 2027 at a rate of $8,750 for single filers and $17,500 for joint filers. An increase and extension to the state’s refundable earned income tax credit, from 15% to 20%, was also included.
Language regarding so-called “skill games” was excised from the final spending bill. It had been included in the initial Senate proposal but was absent from the House proposal.
A group of 11 lawmakers tasked with rectifying the differences between the two chambers’ budget proposals released their final budget proposal Thursday afternoon. The General Assembly now has 48 hours from the time the budget was released to debate and pass the spending bill, which will then be sent on to Youngkin, who will have line-item veto authority.
“I think certainly there will be issues the governor will take with it — he got some of his things included in the budget and some of his things are not. That’s typical, that’s how the process is supposed to work,” Austin said. “I don’t always like everything that’s included in the budget, but I typically like the majority of what’s in the budget.”
Senators Todd Pillion, R-Washington County, and Creigh Deeds, D-Charlottesville, were also among the 11 negotiators who hashed out the final document. They joined Senate Finance chair Louise Lucas, D-Portsmouth, Sen. Mamie Locke, D-Hampton, Sen. Ryan McDougle, R-Hanover County, and House Appropriations chair Luke Torian, D-Prince William County, Del. Mark Sickles, D-Fairfax County, Del. David Bulova, D-Fairfax County, Del. Betsy Carr, D-Richmond, and Del. Rob Bloxom, R-Accomack County.
