RICHMOND, Va. — As Virginia lawmakers prepare to wrap up the 2025 General Assembly session Saturday, the final proposed changes to the second year of the state's two-year budget were unveiled.
The compromise between the House and Senate, both controlled by Democrats, keeps the $1.1-billion tax rebate plan included in both versions introduced earlier this session — which will provide $200 to individual filers and $400 to joint filers through payments scheduled for October.
House Speaker Don Scott (D-Portsmouth) said the rebate emphasized the importance of addressing financial struggles, stating, "we understand that people are hurting. The cost of goods and services is high."
Democrats went with this option and rejected Gov. Glenn Youngkin's proposals with more targeted relief through his no tax on tips and car tax rebate proposals.
In addition to the tax rebate, the budget features a one-time 1.5% bonus for state workers, a $1,000 bonus for teachers, and an increase to the state’s standard deduction of $250 for individuals and $500 for joint filers.
"We came here with a priority and the priority was to make sure that hard working Virginians understand that we heard them," said Sen. L. Louise Lucas (D-Portsmouth), who was among lawmakers on the budget conference.
While Democrats control both chambers, some Republicans were involved in the negotiations.
Sen. Ryan McDougle (R-Hanover) expressed support for the tax relief but indicated a desire for more spending cuts.
"Some things we didn't get that we're going to continue to fight for," he said, advocating for permanent tax relief measures.
The budget also includes provisions specifically impacting Central Virginia.
McDougle said it calls for the sale of two state properties in Hanover.
"If the state owns it, then the county gets no revenue from that. If private citizens own it, businesses happen, people make money, our tax burden is less."
The budget also keeps $50-million for improvements to Richmond's Combined Sewer Overflow system.
Although lawmakers excluded language permitting skill games in convenience stores (House Appropriations Chair Del. Luke Torian (D-Prince William) said it was not anyone's priority), the budget features two gaming-related amendments affecting Central Virginia.
One amendment mandates a referendum regarding the Rosie's Gaming Emporium at the Staples Mill Shopping Center.
"This just says, 'Hey, if you want to come, you have to get the people of Henrico get to have a voice on this,' right? They might vote yes, they might vote no, but they should have that right and that's what this amendment is about," said Sen. Schuyler VanValkenburg (D-Henrico).
The Henrico Citizen reports that renovation of the former furniture store appeared to continue on Friday despite the news. It added the plans for the site were submitted under existing Henrico County code, but before "the Henrico Board of Supervisors was planning to update its code to require a provisional use permit – and associated public hearing process – for any such proposals, which it did just days later."
The other amendment alters financial obligations for existing Rosie's locations around the state, which currently operate historical horse racing machines in conjunction with live horse racing at Colonial Downs in New Kent County.
The new language removes a requirement for a portion of the generated tax revenue to go to New Kent County and instead requires the track operator, Churchill Downs, to provide $110,000 payments for each day of live racing to the county.
"We actually structured a balanced approach, where the localities with new machines or existing machines will get a bigger piece of the revenue," said McDougle. "But, we also put in an approach so New Kent is protected for each of the race days that they have. So, they'll be getting money to compensate them for law enforcement, EMS, infrastructure."
CBS 6 has requested a comment from Rosie's and Churchill Downs about the amendments.
In a statement, New Kent County officials thanked McDougle for his work on this issue and said it "makes good, common sense".
The change would not take effect until July 1, 2026.
Additionally, there is an amendment that says VCU Health will stop making payments to the City of Richmond related to a failed development deal, which would have totaled $56 million.
"We did not think that should be going to the local government, particularly since the project did not go through," McDougle said.
"The city's expectation was to continue conversations with VCU Health leaders in an effort to resolve the terms of the 2021 development agreement pertaining to the 500 N 10th St site," a City of Richmond spokesperson said in a statement. "The amended state budget appears to block future payments from the health system to the city -- as called for under the terms of the contract -- without prior legislative authorization. While this appears to be a disappointing development, the city is evaluating the budget language to better understand it's potential implications."
Lawmakers are set to reconvene on Saturday for the budget's final passage, after which it will be sent to Governor Glenn Youngkin for consideration of approval, amendments, or veto.
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