Virginia’s budget bill has finally been passed by the state legislature, breaking a six-month long deadlock. On the 6th, the state legislature reached a compromise on policy proposals on which the ruling and opposition parties had been at odds, including tax cuts and refunds, and expansion of support for public education and mental health care.
The budget bill contains about $1 billion in tax cuts, including corporate taxes, which state House Republicans have been advocating for, and under this, single individuals will receive a one-time refund of $200 and married couples will receive a one-time refund of $400 when filing taxes.
In addition, when calculating taxes, the standard deduction limit will be increased from $8,000 to $8,500 for single filers, from $16,000 to $17,000 for married couples filing jointly, and the age limit for tax benefits for military retirees will be abolished. It also includes information such as reinstating the sales tax exemption for school supplies for the start of school.
The sales tax exemption for school supplies has usually been implemented around August, but due to the delay in passing this bill, it is scheduled to be implemented around the end of October this year. The public school (K-12) budget will receive an additional $650 million, and support will also be provided for cognitive behavioural therapy promoted by Governor Glenn Youngkin.
Wages for state civil servants will increase by an additional 2% starting in December, and the salaries of local public servants and teachers supported by the state government will also increase by 2%. In addition, $200 million will be allocated for land purchase and development funds to revitalize the economy, $62.5 million will be allocated to college tuition assistance, and $12.3 million will be allocated to the Virginia Employment Commission for administrative support for the unemployed.
The state government is currently recording a fiscal surplus of several billion dollars, so even if expenditures increase due to tax cuts and public employee wage increases, there is no problem in budget management. This budget bill is the latest amendment to the biennial government spending bill and, if signed by the governor, will be implemented until June 30 of next year. It is still unclear whether Governor Youngkin will request amendments to the passed budget bill but given that he has stated that he welcomes the passage of the bill, it appears that he is willing to accept the bill in the larger scheme of things.
Meanwhile, the state legislature held a special session to quickly process the bill to come up with this compromise, and as a result, it is evaluated that the budget bill was finalized earlier than expected. After only a few hours of debate in the Legislature, the ruling and opposition parties adopted the budget bill with overwhelming support, 86 to 4 in the Republican-dominated state House of Representatives and 38 to 0 in the Democratic-dominated state Senate.
The state legislature ended its regular session on February 25th of this year without being able to reach an agreement on the original budget bill, and it is said that the subsequent closed-room negotiations comprised of a small group of lawmakers from the ruling and opposition parties contributed significantly to reaching an agreement.