The General Assembly’s Budget Committee repeals Governor Yonkin’s tax plan and increases funding for schools and mental health.

The Democratic-led Finance Committee of the General Assembly on Sunday rejected the $1 billion in additional tax cuts and sales tax hikes that Gov. Glenn Youngkin had sought in his first two-year state budget. Instead, Democrats are calling for more money to fund public education, give raises to teachers and expand mental health services.

The House budget also seeks a total of $22.5 billion in transportation funding for Virginia, including accelerating the I-81 northbound lane expansion project from mile marker 116 to 128 in the Salem area. It also includes $70 million in one-time General Fund support for funding. It’s part of the budget Yonkin sent to Congress in December.

“This will save the commonwealth approximately $70 million over the life of the project by providing funding to allow for the expansion of the southbound lanes at the same time as the expansion of the northbound lanes.” said Rep. Paul Krizek, D-Fairfax County. The House Appropriations, Transportation and Public Safety Subcommittee said this during the presentation of the House budget amendment in Richmond.

Nearly all transportation funding is distributed using a funding formula set forth in Virginia law and then allocated to specific projects based on a data-driven process, but “at a very large scale and across the commonwealth, There are several projects with significant impacts that warrant direct budgetary action,” Krizek said.

The subcommittee’s report also includes $20 million for cannabis regulators to provide “necessary funding to ensure adults have access to safe and legal products free from the influence of the black market.” So that we can secure funding,” Krizek said. Two competing bills seeking to create an adult-use market in Virginia are currently moving through the Legislature, but it remains doubtful whether Yonkin will sign either proposal that reaches his desk.

Both finance committees largely gutted Youngkin’s plan to overhaul Virginia’s tax base. The governor had called for a 12% income tax cut and an increase in the sales tax from 4.3% to 5.2% to make up for an estimated $2.3 billion in annual revenue losses.

But House Democrats kept in Youngkin’s budget a provision that would close a loophole in the so-called high-tech tax on digital goods, which are currently classified as tax-exempt services. That means Virginia could start taxing online music and movie downloads from platforms like Apple Music if… The General Assembly approves the proposal.

“It makes no sense to pay sales tax when you buy a Blu-ray disc, but you don’t pay sales tax when you download the same movie from a digital retailer,” said Rep. Luke Torian, D-Prince William County. Stated. , Chairman of the House Appropriations Committee.

Democrats also agreed to Yonkin’s request to free up an additional 3,440 developmental disability exemption slots to address the No. 1 priority waiting list. The Medicaid Waiver Program helps cover the cost of certain services for people with developmental disabilities, and expanding the slots would cost him $300 million.

“Unfortunately, the provision of slots does not guarantee service. This budget will maintain these slots, not only to ensure slots are available, but to ensure service to those in need. It will also increase the salaries of personal care attendants,” Torian said on Sunday. “The committee also recommends more than $457 million for mental health and substance abuse services, which is more than recommended in the budget as introduced.”

In exchange for fulfilling Mr. Yonkin’s wish for an additional $1 billion in tax cuts, House Democrats have decided to include $1.02 billion earmarked for local school divisions to fund pay and quality standards fixes, including $1.02 billion for early childhood education. It proposes investing $2.56 billion in education and K-12 education.

Democrats want to direct $628.2 million to implement a four-year plan to raise teacher pay above the national average with two raises of 3% and 3.8% at the beginning of each fiscal year. I believe. “We remain on track to achieve this milestone by 2028,” said Rep. Sam Rasoul, D-Roanoke, chairman of the House Appropriations Elementary and Secondary Education Subcommittee.

Sen. Louise Lucas (D-Portsmouth) made clear in her first budget presentation as the first Black chair of the Senate Appropriations Committee that she has no intention of losing sight of priorities or compromising principles.

“Because of my experience, I value the fields of education and public safety,” Lucas said. “People of my generation, black and white alike, were unable to go to school during mass protests. I want to ensure that I am never denied the ability to grow in a supportive community in the United States.These experiences have made me stronger and I will never be denied the ability to grow in a supportive community. , I was able to stand up to anyone without fear.”

The Senate proposal calls for increasing general fund support for K-12 schools by $1.6 billion over two years and restoring amounts in the Literary Fund to support school construction. “Combined with the policy measures included in the budget introduced from all funds, this represents an increase of more than $2.6 billion,” said Sen. Mamie Locke (D-Hampton, D-Hampton), chair of the Senate Education Appropriations Subcommittee. ” he said.

Both commissions are proposing to restore funding to the State New College Institute in Martinsville for a total of $6.2 million over two years. As part of the budget, Youngkin required the institute to submit a business plan by October 2024. Without that, NCI would receive about $4.5 million in proposed federal funding in fiscal year 2025, but risks receiving nothing in fiscal year 2026.

The House budget also directs the state to consider whether to convert the nonprofit Virginia Museum of Transportation into a state agency. Mr. Rasul’s bill, which would have taken over the museum, was previously defeated, and a bill by Sen. Chris Head, R-Boattourt County, was delayed for a year.

Both the House and Senate funding committees are holding hearings and discussions that could lead to amendments to the budget proposal. After consideration by each of these committees, the amended bill will be brought to the floor of each chamber and other amendments may be made before it is voted on, a step expected to occur later this week.

In a statement Sunday, Yonkin said he views the budget proposals from the House and Senate “through the lens of the importance of structural balance and the perspective that Virginians cannot afford further tax increases and, in fact, need additional tax cuts.” We will consider it from now on.” This is to build on the investments we have made in education, law enforcement, economic and workforce development, and behavioral health in the Commonwealth. ”

Youngkin called his budget “a necessary bold plan to move forward with the goal of ‘unlocking opportunity’ for all Virginians.” “Today is just the beginning, and I am confident that by working with the General Assembly, we can continue the progress we have made in the first two years and move our commonwealth forward together.”

After reporting their respective amendments on Sunday, both chambers are expected to vote on the budget later this week, with the final version being passed to the other chambers for review. The next step is to appoint a budget conference committee, which typically consists of six delegates and her six senators. Those conferees will negotiate the final version of the budget, which will be sent to the House and Senate for another vote before heading to the governor’s desk.

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