RICHMOND, Va. (WRIC)-Governor Glenn Youngkin promoted his plans to cut taxes on Thursday as the General Assembly voted on competing visions for spending.
The House and Senate approved amended versions of the two-year budget initially crafted by Governor Ralph Northam’s administration before the end of his term. The two sides will have to reach a compromise before a final version is agreed to.
The package of tax cuts being backed by the Republican-controlled House of Delegates adds up to about $5.3 billion, far exceeding the $2.5 billion proposed by the Senate.
While the House budget doesn’t cut existing public school funding, the Senate plan allocates $915 million more in new funding, according to Ashley C. Kenneth, president and CEO of The Commonwealth Institute.
Youngkin said in a previous statement that the Senate isn’t doing enough to cut the cost of living. He echoed calls for sweeping tax cuts during a visit to the National Institute of Aerospace in Hampton Roads.
“There is not a whole lot that I can do as governor about the inflationary pressures. What we can do is get taxes down. What we can do is remove the added burden that has been placed on an already escalating cost of living,” Youngkin said.
Both budgets cut taxes on groceries and personal hygiene products with different approaches. The Senate version would only eliminate the 1.5% state portion of the grocery tax and the House would cut the entire 2.5% tax, including the 1% local component.
Taxpayers will also get some money back under both plans in the form of one-time refunds. The amount is still being negotiated but, under the House plan, individual filers would get $300 and joint filers would get $600.
The House goes further by temporarily suspending a gas tax increase and doubling the standard deduction, among other changes backed by Governor Youngkin.
Senator Emmett Hanger, a Republican representing Augusta, is among those advocating for a tax reform study before taking further action on the standard deduction.
“Some of these major changes need to be given a little more thought,” Hanger said.
The lower price tag for tax cuts in the Senate budget means there is more revenue available for priorities like education.
“Virginians want K-12 schools fully funded. That is a higher priority than tax relief,” McClellan said.
The Senate maintains the 5% raise in each of the next two years proposed by Governor Northam for educators and adds a $1,000 bonus, which will also be given to state employees. The House lowers that to 4% raises and a 1% bonus each year.
Both budgets add money for staff but in different ways. The House proposed an additional $104 million for principals and assistant principals. The Senate provides nearly $272 million to increase support staff positions such as bus drivers, librarians and school nurses. Meanwhile, the House plan cuts a proposal from Northam to increase the number of teachers for English-language learners.
According to a budget breakdown by “Fund Our Schools,” the House allocates less money per student compared to the Senate. The differences vary depending on geography and poverty rates.
School construction funding is included in both budgets. The Senate proposes $500 million in one-time grants for school divisions whereas the House allocates $541.7 million toward a targeted loan rebate program for local school divisions.
Notably missing from the Senate budget is $150 million to kick start new innovation lab schools, the only component of Youngkin’s school choice agenda that appears viable in a divided government.