RICHMOND, Va. -- After a months-long battle fueled by $5 billion in surplus tax revenue and looming November elections, the Virginia General Assembly officially passed a deal to amend the state budget, sending money back to taxpayers in the form of rebates and providing hundreds of millions of dollars in new funds to public schools and mental health resources.
Lawmakers returned to Capitol Square Wednesday for a special session, but the overarching vibe around the Capitol was notably ordinary for workers and businesses nearby.
The global street food and cocktails served up at Native Plant, a restaurant on Main Street in downtown Richmond, come with a personal touch.
“It is, yeah. We like to build a relationship with a lot of our staff and customers," said owner Lorna Knight.
Native Plate opened the business during the pandemic, so Knight said the constant pivots made her appreciate how her budget at the restaurant affects the vibe she's cultivated.
“Absolutely, we rely on that sort of daily foot traffic," Knight said.
"It’s hard to make everybody happy," she said of the state budget talks. “As the wife of a first responder and people that are on the front lines for the city, the teachers and people that work for the city, I think they deserve a little bit more.”
Teachers and state workers did get pay bumps as part of the budget deal, and taxpayers will receive rebate checks from Virginia by the end of this year.
The proposal includes about $1 billion in tax reductions, mostly through one-time tax rebates of $200 for individuals and $400 for joint filers. It also would increase the standard deduction, remove the age requirement for a military retiree tax benefit, and reinstate a popular back-to-school sales tax holiday lawmakers forgot to renew.
While the holiday typically takes place in August, it would instead be held this year the weekend of October 20.
Tax policy changes were a key part of what turned into a six-month stalemate, as Youngkin and the GOP-controlled House of Delegates had argued for an additional $1 billion in permanent cuts, including a reduction in the corporate tax rate.
Democrats who control the state Senate argued that more reductions would be premature after negotiating $4 billion in tax relief last year. The rebates, which weren't initially included in either chamber's budget bill, were a compromise.
The legislation would boost K-12 education spending by about $650 million and fund behavioral health initiatives sought by Youngkin, including new crisis-receiving centers and crisis stabilization units.
It includes funding for an extra 2% raise for state workers starting in December, and money for the state's share of a 2% raise for state-supported local employees, including teachers.
The combination of tax cuts and increased spending is possible because the state had accumulated a multi-billion surplus.
You can read more from the Associated Press report on the budget deal here.
The deal comes months after the regular General Assembly ended and leaders of both parties said Wednesday that elections played a role.
"I think the reality of the situation is we had primaries and politics got involved," said Del. Barry Knight, the lead Republican budget negotiator. “Like I said before, anyone who doesn’t understand compromise isn’t married."
“It took awhile because Democrats aren’t going to give into to corporate tax cuts over ordinary people," said Del. Don Scott, the House Democratic leader.
The budget deal passed through both chambers easily with only a handful of lawmakers in both chambers voting against it.
With the political shadow of the November elections, in which control of the General Assembly, currently split between the parties, looming over budget talks and the final product, both parties found items they can bring to voters on the campaign trail.
"I think we get tax relief of over a billion dollars like we promised. Biggest education budget ever. Biggest natural resources [budget] ever. We’ve got more for schools, more for mental health," Del. Knight said.
“To be quite honest with you, it’s good for Virginia, and that’s my first role. I’m a Virginian first and a Republican second.”
"What we did now is what we had to do to keep our public schools on track, but we can do a lot more. And if Democrats win the House of Delegates, that’s what we’ll do." Del. Scott said. "We need folks to understand the House of Delegates has been under Republican control for 22 of the past 24 years. So the reason we’ve been historically under-funding the schools is because they’ve been in charge, and we’ve had to fight them tooth and nail.”
Governor Glenn Youngkin, who voiced frustration over the delayed budget deal, thanked lawmakers for getting the one to his desk.
"While the process took longer than needed, more than $1 billion in tax relief is on the way to Virginia veterans, working families, and businesses. Additionally, this collaborative effort ensured the funding of our shared priorities: investing in students and teachers, supporting our law enforcement community, and transforming the way behavioral health care is delivered in the Commonwealth," Youngkin said in a statement.
Youngkin can amend the budget — which would require lawmakers to return to Richmond once again — or sign it.
The Associated Press contributed to this report.
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