RICHMOND, Va. (WRIC) – The budget deal Virginia lawmakers will soon vote on includes funding to give teachers and state employees pay raises, money for public schools, one-time tax rebates and investments in key programs.
It also allocates money for proposals to increase state prison oversight, address learning loss, bring back Virginia’s “sales tax holiday” and help plan the potential pursuit of a professional sports team.
Budget negotiators announced an agreement on proposed changes to Virginia’s two-year spending plan in late August, months after lawmakers approved a so-called “skinny budget” plan at the end of the 2023 legislative session.
Lawmakers will vote on these proposals in the budget deal — House Bill 6001 and Senate Bill 6001 — when the Virginia General Assembly meets Wednesday for a special session called by Gov. Glenn Youngkin (R), who will have to sign off on the final budget.
How we got here
The assembly is meeting for a Sept. 6 special session after June state primaries and divisions over Youngkin’s tax reduction proposals, including a cut to the corporate tax rate that did not make it into the final deal, stalled the budget talks.
Despite the delay, budget negotiators said they were not in a rush to reach a deal because Virginia’s two-year budget was in place until the end of next June, removing any threat of a government shutdown at the start of the new fiscal year on July 1.
Lawmakers leading the discussions announced they reached a compromise on the budget amendments on Aug. 25. Topline numbers were provided in the announcement, but the deal’s specifics were not available until it was posted online over the weekend.
Here are some of the key takeaways:
Pay raises
The deal sets aside nearly $55 million for the state’s share of a 2% salary increase for teachers – effective Jan. 1, 2024 – adding to the 5% hike for the 2023 and 2024 fiscal years approved when the initial two-year budget plan was passed. School districts must match the 2% increase to access the funds for the raises.
It also includes $115 million for 2% pay raises for state employees, including university workers, adjunct faculty, teaching assistants, state-supported local employees and Standards of Quality funded positions.
This also adds up to a 7% salary increase for these positions in the 2024 fiscal year, with raises taking effect for state employees on Dec. 10 (Jan. 1, 2024, paycheck), Dec. 1 for state-supported local positions and funding for SOQ positions effective Jan. 1, 2024.
Tax cuts
Most of the nearly $1.05 billion in proposed tax reductions in the budget deal ($906 million) comes from one-time tax rebate checks — $200 for individuals and $400 for joint filers.
Virginia’s standard deduction – a flat amount that filers who don’t itemize their deductions can use to reduce their taxable income – will increase in the 2024 and 2025 tax years under the proposed budget deal from $8,000 to $8,500 for individuals and from $16,000 to $17,000 for joint filers.
“The Conferees, understanding that revenue growth may be subsiding, focused on funding one-time initiatives instead of building up ongoing programs to the extent possible,” an overview of HB 6001 prepared by the Virginia House Appropriations Committee staff reads.
Public education
Virginia’s budget deal has $645 million in funding for public education, including more than $418 million for flexible one-time payments available through the 2026 fiscal year.
School districts are encouraged to use the funding on efforts to combat learning loss and help implement the Virginia Literacy Act.
The final deal also proposes $20 million “for targeted flexible grants to support school security” in Virginia’s public schools.
Behavioral health
While lawmakers sparred over how much in tax cuts to include in the deal, more funding for key programs such as addressing the state’s behavioral health system was a key issue for Democrats and Republicans.
The budget bill sets aside $155 million in new spending for mental health services, including $58 million to establish crisis receiving centers and crisis stabilization units.
It also proposes using $34 million for permanent supporting housing and housing for those with serious mental illness and $18 million for pay raises of an average of 5% for staff members of Community Services Boards.
Increased oversight of state prisons
The final deal also has funding to create an independent office that would oversee the Virginia Department of Corrections and help those incarcerated in state prisons. The proposal is similar to a Democratic-backed bill that House Republicans voted down earlier this year.
The responsibilities of the state prison ombudsman office, according to the proposed budget agreement, would include the following:
- provide information to inmates, family members, Department of Corrections employees, and others regarding the rights of inmates and employees
- monitor conditions of confinement, assess compliance with existing policies and best practices, and make recommendations to facilities
- provide technical assistance to support inmate self-advocacy
- establish procedures to gather stakeholder input into the Ombudsman’s activities
- make recommendations that would support the safety and wellbeing of inmates and employees
The return of Virginia’s “sales tax holiday”
The budget bill proposes reviving Virginia’s popular “sales tax holiday” for school supplies, clothing, footwear, hurricane preparedness and energy-efficient durable goods.
The spending plan approved by lawmakers did not include the tax-free holiday, an omission lawmakers acknowledged was a mistake. The budget deal would renew the “sales tax holiday” this year during the third weekend in October.
This story is developing. Check back for updates.