The General Assembly met in mid-April for the reconvened session, where we debated and voted on the Governor’s amendments and vetoes. Overall, the meeting in Richmond went as expected. Now that our work from the reconvened session has concluded, the only outstanding item is the budget. As a reminder, the two proposed budgets from the House of Delegates and Senate are starkly different.

The stalemate between both sides boils down to the debate over taxes. In the biennial budget last year, we passed $4 billion in tax cuts. This year, Governor Youngkin and House Republicans are pushing for an additional $1 billion. He wants both the individual and corporate tax rates lowered to provide relief and make Virginia “more competitive” for business. Senate Democrats are opposed to both ideas for a few reasons. First, we do not need to lower our corporate tax rate. Virginia is an attractive location for large and small employers irrespective of the corporate tax rate. When Amazon announced they had chosen Virginia as the location for their second headquarters, the deciding factor was not our tax rate, but rather our world-class education system. Both our public schools, where employees would send their kids, as well as our higher education institutions that produce talented and skilled workers made Amazon turn down millions of dollars of incentives from competing states. Secondly, we can provide financial relief to people without permanently lowering our income tax rate. Last year, we issued tax rebates that went directly into the hands of hard-working families. Offering a one-time style relief would be a much better alternative than reducing our revenue for the coming years.

Senate Democrats are holding the line for more investment in social services across the board, but at the top of that list is public education. As previously mentioned, education is one of the most important investments we can make in the Commonwealth. A world-class education system attracts business investment, and our high-quality universities and colleges develop talent that is essential to companies looking to expand their operations. However, higher education is becoming less affordable every year. Several of our public institutions have already announced tuition increases for the next academic year. It’s worth noting that the Commonwealth used to fund our public universities at a much higher rate. Now with reduced funding, universities are forced to pass costs onto students and their families. This budget surplus is the perfect opportunity to lighten the load and make a four-year degree more accessible for those who choose that path.

 Aside from higher education, Senate Democrats are also advocating for greater investment in K-12. As chair of the Senate Finance K-12 Education subcommittee, I know there are plenty of ways to use this budget to re-invest in our schools, students, and teachers. Since the pandemic, we have been working to close the gap on learning loss. Our proposed budget included resources for students, so they can catch up and reach their full potential. Our proposal also includes an additional raise for teachers and higher education employees. This is on top of the raise passed in last year’s budget. Our teachers deserve to be compensated above the national average, not below. Furthermore, we recognize the need to address crumbling school infrastructure. 

While there is very little we have been able to find common ground on, we are continuing to negotiate. To be clear, this budget is simply to allocate our existing surplus. Virginia will continue to operate under the current 2022-2024 biennial budget that was passed last year. While it is our full intention and expectation to find a compromise and allocate this surplus responsibly, it would not be unprecedented to proceed without a new budget. In 2001, we were stuck in a similar situation. Unable to come to an agreement over Governor Gilmore’s plans for the car tax, we ended up not passing a budget for that year. While it is not ideal to leave money on the table, giving into demand for the full $1 billion tax cut package would be too harmful to our revenue stream going forward. I have faith that as we continue our discussions, we will be able to find a middle ground that provides financial relief for individuals and much-needed investments in public education.