RICHMOND — Gov. Glenn Youngkin (R) is proposing a rewrite of the state budget adopted last month by the Virginia General Assembly, issuing 233 amendments that would scrap his initial plan for a tax system overhaul and include some of the funding increases proposed by lawmakers.
Youngkin is calling his proposal the “Common Ground Budget,” and aides previewed it for reporters Monday under embargo until the governor officially rolled it out at a 1 p.m. news conference.
His original budget, proposed in December, included ambitious changes to the state tax system: cuts to personal income tax rates, an increase in the state sales tax and an extension of the sales tax to digital downloads. The state Senate and the House of Delegates scrapped all of the tax cuts in the budget adopted when the General Assembly session adjourned March 9, arguing that $5 billion in tax breaks over the previous two years was enough at a time of economic uncertainty.
Lawmakers also rejected the sales tax increase but agreed to extend the sales tax to digital goods — and went a step further by applying it to business downloads as well, not just consumer purchases. They used the revenue to fund salary increases for teachers and state employees, along with other priorities.
Youngkin has responded by agreeing to back down on tax cuts while also rejecting any tax increases, according to the administration aides, who spoke on the condition of anonymity to disclose the information before its official release. Surrendering on the tax cuts freed up about $1 billion in revenue to use for 3 percent salary hikes for teachers and state employees, the aides said.
Youngkin has been holding campaign-style rallies before Republican audiences around the state, criticizing Democrats for sending him a “backward” spending plan that didn’t include his tax cuts. He vowed not to sign any tax increases. In response, Democratic leaders toured the state to tout the funding priorities they had included in their budget. The administration aides said Monday that Youngkin’s amendments attempt to split the difference.
The governor’s proposals “preserve the vast majority of spending increases sent to him by the General Assembly,” one aide said, though the information released was not detailed enough to compare directly to the legislative spending plan.
In addition to the pay raises, the governor’s proposed budget amendments would increase funding for K-12 education over amounts included in the budget Youngkin unveiled in December and would increase funding for higher education to help hold the line against tuition increases, the aides said.
“The budget passed by the General Assembly also eliminated $850 million of the governor’s priorities. This restores $140 million of those priorities,” one aide said. That includes restoring money for “lab schools,” cooperative ventures between public schools and institutions of higher learning.
Youngkin is also proposing an amendment that would strike language in the General Assembly’s budget putting Virginia back into the Regional Greenhouse Gas Initiative (RGGI), a multistate compact for trading carbon emissions credits. A state regulatory board voted to withdraw the state from the group last year, fulfilling a directive from Youngkin, who called the carbon offsets paid by utilities a “tax” that gets passed on to consumers.
In addition, the aides offered a glimpse of at least one other action Youngkin is poised to take ahead of an 11:59 p.m. Monday deadline to act on measures passed by the General Assembly: He will not veto measures allowing slot-machine-like “skill games” in convenience stores and other retail outlets, but he will propose unspecified amendments, they said.
This is a developing story and will be updated.
