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Lawmakers approve budget proposal — including pay raises for state employees, tax cuts

Two people speak
House Appropriations Committee Chairman Del. Barry Knight (right) speaks with Del. Glenn Davis (R-Virginia Beach) at the capitol in Richmond on March 10. Knight was among a handful of lawmakers who negotiated the state's two-year budget proposal. (File photo: Steve Helber/Associated Press)

Lawmakers in Virginia's divided legislature approved a new two-year budget in Richmond on Wednesday after months of negotiations.

The proposal, which now heads to the desk of Gov. Glenn Youngkin, includes pay raises for state employees and teachers, new money for school construction and funding for gun violence prevention. In addition, the budget provides about $4 billion in tax cuts. VPM News state politics reporter Ben Paviour sat down with editor Sara McCloskey to discuss the agreement.

The following has been edited for length and clarity.

McCloskey: Let’s start with the politics. Who came up with this plan? 

Paviour: Since the legislature is divided, this is a compromise between Democrats in the Senate and Republicans in the House of Delegates.  That makes it sound like this was a big team effort. But the reality is only a few lawmakers were in the room. One of those people is Republican Delegate Barry Knight, who said everyone gets a little bit of what they wanted in the agreement. 

Knight: "What I think we have done is we have got a good bipartisan budget.” 

The budget only came out on Sunday, meaning lawmakers didn't have much time to go through it. And they didn’t always like what they saw. That includes new criminal penalties for possessing more than four ounces of marijuana – a proposal that had already been rejected by Democrats in the Senate. With the budget, lawmakers can’t pick and choose which items they want. It's an all or nothing vote. And that led to complaints from some Democrats, including Delegate Marcus Simon, about the lack of transparency. 

Simon: "God forbid, they actually had to have a public meeting, and invite the press and the public and the rest of us in to know what it was they were talking about, Mr. Speaker.” 

But in the end, all but a dozen or so lawmakers voted for this spending plan. In fact, my inbox is clogged with press releases from the parties and advocacy groups claiming victory. 

What are they all cheering about? 

Republicans are especially excited about the taxes. If Gov. Glenn Youngkin signs this budget, individuals will get $250 rebate, or $500 for couples. Lawmakers also agreed to raise the standard deduction to almost double what it is now. That was a big priority for Youngkin and Republicans in the General Assembly. They didn’t get one of Youngkin’s other big priorities — a gas tax holiday. Democrats are excited about a move to make the earned income tax credit partially refundable, which will help lower income households. 

All told, it adds up to almost $4 billion in tax cuts — made possible by a record state surplus. 

That’s a big chunk of change. But it doesn’t sound like the state is also talking about cutting services? 

Not in this budget, no. There’s lots of support for various pay increases. State employees would see a 10% pay increase over two years. Teachers would also get a 10% boost, although localities have to chip in half of that. Corrections officers, state police and staff at state hospitals would also see their pay rise by even larger amounts, mostly because lawmakers say they’re severely underpaid right now. 

You mentioned teacher pay increases. What about students and schools? Where does money for education go in this plan? 

There’s been lots of talk in Virginia over the last decade about the state of our public school buildings. This budget would devote over $1 billion toward school construction projects. There’s money for support positions and dedicated reading specialists as well as some funding for mental health programs — although not as much as advocates had hoped. More controversially, the budget sets aside $100 million toward laboratory schools — K-12 schools affiliated with colleges and universities. Still, if this budget is signed by Youngkin, it will be the biggest K-12 budget the state has ever passed, even after adjusting for inflation. 

So, the ball is now in Youngkin’s court. What are his options? 

He can sign it as-is, suggest changes or veto it. He’s already said he generally likes what he sees, but that doesn’t mean he won’t want to make a few changes. If he does, the legislature has to come back and vote on those amendments.  

This all has to be said and done by July 1, when the state begins a new budget year.