State News
‘Buckle up’: Youngkin budget proposal includes another $1B in tax cuts
Gov. Glenn Youngkin presents his budget proposal to the General Assembly’s money committees ahead of the 2023 legislative session. (Graham Moomaw/Virginia Mercury)
Gov. Glenn Youngkin rolled out a budget plan Thursday that includes $1 billion in tax cuts for Virginia residents and businesses, telling the General Assembly to “buckle up” because his administration wants the state to “start going faster and getting more done.”
Building on roughly $4 billion in tax cuts included in a bipartisan budget deal earlier this year, Youngkin said he wants to lower the state’s top individual income tax rate from 5.75% to 5.5%, a change with a $333 million impact. Because the highest income bracket covers all taxable income over $17,000, the top rate applies to the vast majority of Virginia earners.
The governor also suggested cutting the state’s corporate income tax rate from 6% to 5%, which would lower revenues by roughly $362 million over the two-year budget cycle. Youngkin said he’d like to get the rate even lower, possibly to 4% by the end of his administration.
Making it cheaper for people and businesses to be in Virginia, Youngkin told the legislature’s money committees, will boost Virginia’s position as it competes with other states for talent and economic investment.
“We can grow our way to lower tax rates,” Youngkin said. “We can keep Virginians here, including our veterans. We can attract people from other states and fuel the economic engine that will drive it all even faster. And we must get started now.”
Democrats called the budget plan a good starting point for negotiations that will begin in earnest next month when the General Assembly begins the 2023 legislative session. But Sen. Janet Howell, D-Fairfax, the co-chair of the Senate Finance Committee, said Youngkin’s tax cuts are sure to be “very controversial.”
“We have a long list of unmet needs in this state, things that the General Assembly has promised over many years that we haven’t delivered on,” Howell told reporters after the governor’s presentation.
Youngkin said his latest tax-cutting proposal can be funded by the $3.6 billion in excess revenue the state is forecasting for the current fiscal year. To hedge against the possibility of a recession, the Youngkin administration noted its plan includes safeguards to stop roughly $1 billion of budget items, including the proposed cut to the individual income tax rate, if the fiscal forecast worsens and it starts to look like the state can’t afford it.
“Despite the current economic uncertainty, the Commonwealth of Virginia is really in an extraordinary position,” said Finance Secretary Stephen Cummings, adding Virginia can do the “both/and” of lowering taxes and increasing spending on key priorities.
Other tax cuts in the proposal include $162.1 million in relief targeted to small businesses through the qualified business income deduction, $94.9 million for another increase in the state’s standard income tax deduction, and $37.8 million to lift an age limit on tax-free military retirement benefits for veterans.
“Taxes are still too high in Virginia,” Youngkin said.
Democratic lawmakers, who secured some major tax concessions from Republicans earlier this year while voting for some of Youngkin’s tax proposals, seemed particularly skeptical of Youngkin’s call to cut the corporate income tax rate.
“We’re 27th in the nation. Square in the middle,” said Del. Vivian Watts, D-Fairfax, who said she hasn’t heard complaints that Virginia’s corporate tax rate is particularly high or burdensome.
In response to Watts, Cummings said the rate “does make a difference” to companies making location decisions.
“It does not feel like there’s a strategy and a message about what we’re trying to achieve with our tax structure,” Cummings said.
Youngkin’s proposal sets the stage for budget negotiations that will unfold when lawmakers return to Richmond on Jan. 11 for the start of the next session.
Here are a few other major proposals in Youngkin’s plan:
Bonuses for teachers and state employees
The proposal doesn’t include across-the-board raises for public workers, but teachers and state employees would get one-time bonuses.
Full-time state employees would receive $1,500 bonuses effective Dec. 1 of next year, and high performers would be eligible for extra bonus pay worth up to 10% of their salary. The merit bonuses would be based on employees’ most recent performance evaluations. Combined, the bonuses for state employees would cost roughly $200 million.
Similarly, the budget includes $50 million for merit-based bonuses for teachers. Eligibility for the $5,000 payments would be determined “by the Department of Education in conjunction with local school divisions,” according to budget documents.
Another $45 million would cover the state’s share of one-time retention bonuses for instructional and support staff.
Site readiness
Virginia’s lack of large-scale building sites ripe and ready for industrial development has been a regular talking point of the administration, which says it’s one of the biggest factors leading the state to lose deals to competitors like Tennessee, North Carolina, and Georgia.
The biggest spending priority of the budget proposal, site development, would receive an additional $450 million over the next two years to grow Virginia’s inventory of project-ready sites. The second-year allocation of $250 million would be contingent on state revenues meeting expectations, a mechanism intended to provide Virginia some flexibility in the event of a recession.
“The opportunity cost of inaction is clear, and it’s alarming,” Youngkin said. “Since 2016, Virginia was eliminated on projects that represented more than 55,000 direct jobs and $124 billion in capital investment for one reason: sites.”
Among those were four major semiconductor and four major automotive projects that the Virginia Economic Development Partnership has said would have generated 33,200 direct jobs and over $1.9 billion in capital spending.
Resilient Virginia Revolving Loan Fund
The second-largest spending item in Youngkin’s budget proposal is the deposit of $200 million over the next two years into the state’s newly created Resilient Virginia Revolving Loan Fund.
Set up by the General Assembly during the 2022 session, the revolving loan fund was envisioned as a more flexible tool for channeling money to Virginians facing flooding than the Community Flood Preparedness Fund, which issues grants for community resilience projects but not to individual private landowners.
The revolving fund was seeded with $25 million this year, drawn from money Virginia took in from its participation in the Regional Greenhouse Gas Initiative, a 12-state carbon market. By law, 45% of Virginia’s RGGI proceeds flow to the Community Flood Preparedness Fund, which previously was the only dedicated source of state money for flood resilience.
With Youngkin moving to withdraw Virginia from the market, however, local governments facing increasing pressures from flooding linked to climate change have worried about the loss of the revenue stream. Capitalized with an additional $200 million — half of which is contingent on the state meeting revenue forecasts — the revolving loan fund could provide an alternative source of flood preparedness dollars, albeit one reliant on loans rather than grants and with greater uncertainty about long-term cash flow.
“This $200 million appropriation will allow the Resilient Virginia Revolving Loan Fund to serve as a true revolving fund that is able to serve as a sustained source for resilience needs,” Youngkin spokeswoman Macaulay Porter said in an email.
Education
Besides teacher bonuses, new education spending will include an additional $50 million for laboratory schools, the K-12 academies developed in partnership with colleges and universities that are the closest Youngkin has gotten to fulfilling his pledge to foster school choice in Virginia. The budget signed by the governor this past June included $100 million for the schools.
Pointing to steep learning losses among students during the COVID-19 pandemic, Youngkin is also proposing $7.2 million for K-8 math specialists in low-performing schools and $16.9 million to provide a reading specialist for every 550 students in grades four and five beginning in the 2023-24 school year. An additional $21 million would go to the Virginia Community College System to expand its dual enrollment program.
“By the time I leave office, I want us to have a plan to graduate every single high school senior in the commonwealth of Virginia with an industry-recognized credential,” said Youngkin.
And, with teacher shortages continuing to loom, the governor is floating $10 million in incentive payments for “teachers hired to fill instructional positions in hard-to-fill positions or hard-to-staff schools between July and September 2023.”
Commanders
Oh, and by the way, there’s this: $500,000 for the Secretary of Finance to “evaluate potential economic incentives related to the potential relocation of the Washington Commanders to the Commonwealth of Virginia.”
by Graham Moomaw, Virginia Mercury
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Transcript of the Governor’s Joint Money Committee Speech
Thank you, Chairman Knight, Co-Chair Howell, Co-Chair Barker, and Chairwoman Robinson.
Thank you for inviting me here today.
I know that all of our hearts are heavy this week as we mourn the loss of a colleague and a friend, Delegate Ronnie Campbell. And I’d ask that you all join me in a moment of silence in his memory.
Thank you.
Let’s get started simply by saying: buckle up because we’re going to go fast.
The revised budget I am asking you to adopt is all about two things: going faster and getting more done.
And it is the keystone of our Day 2 Game Plan, which is all about Accelerating Results for Virginians, and taking Virginia to the NEXT LEVEL.
Before we dive in, I’d like to acknowledge the Lt. Governor, the Attorney General, and the Speaker for joining us here today. They have been great partners, and I am grateful to each of you.
Of course, I also want to thank my wife, Suzanne, the First Lady of the Commonwealth for joining me this morning. Suzanne, I am so inspired by you every single day. Thank you.
When I stood in front of you in the House chamber in January – and again when I stood in this very room in August – I asked us to work together in partnership to deliver results for Virginia.
I am here to renew that request; to ask us to lock arms and do the work – with one new caveat
Virginians don’t have time for petty politics…
The choices before us are not EITHER/OR choices; they are BOTH/AND choices.
And I will work with any member… of any party… to get results for the people of this Commonwealth.
This is a mindset I’ve had since Day One. And it’s why we went straight to work making Virginia the best place to live, work, and raise a family.
But as a businessman, I must be honest: as proud as I am of our progress, I am frustrated every day by the pace of government.
So, we’re going to hit the accelerator.
Our Day Two Game Plan – and this budget- will accelerate results and deliver more in every corner of the Commonwealth.
When it comes to lowering the cost of living, we will accelerate bringing down taxes, accelerate making it more affordable to buy a home and accelerate reining in our electricity bills.
When it comes to restoring excellence in education, we will accelerate raising standards, empowering parents and preparing our workforce.
When it comes to our economy, Virginia will not just be open for business, not just competing, but we are going to accelerate so we compete to win.
When it comes to the safety of our communities and our citizens, we will do more to back the blue, accelerate our efforts to fight violent crime, and get the right help, right now to those who need behavioral health care the most.
When it comes to our natural resources, we will accelerate meeting our Chesapeake Bay goals, safeguarding our communities from recurrent flooding, and preserving our natural wonders.
And finally, when it comes to government itself, we are going to accelerate its transformation, driving better outcomes for less money – that is called efficiency.
Our next targets for transformation are procurement and real estate- the stuff we buy and the buildings we own. And there are hundreds of millions of dollars of real savings there.
We are accelerating from an already unprecedented pace for Virginia government.
Our work over the last year has been pivotal in getting the Commonwealth moving.
The results are unmistakable.
The budget provided $4 billion in tax relief for hardworking Virginians in all walks of life.
Nearly 100,000 more Virginians are working today versus this time last year. We’ve recruited flagship companies like Lego, Boeing, Raytheon, Rocket Lab, and Plenty to the Commonwealth.
We’ve seen great Virginia companies expand like Hilton, Amazon, Perdue Agribusiness, Lowe’s, CoStar, Hitachi Energy, and ThermoFisher.
And we’ve seen high growth businesses like DroneUp, AeroFarm, Beanstalk, SmartRoof, and TemperPack accelerate even faster.
All told, we’ve won 172 new projects and expansions, totaling $11 billion in capital investment.
We passed the Commonwealth’s largest investment in education – just as we promised we would. And we created the framework for new and innovative lab schools within the public school system; resulting to date in eight lab school applications and 20 more in the pipeline.
We stated clearly that in Virginia, we back the blue – providing record salary increases for law enforcement, increasing funding for training and equipment, and rolling back the early release of violent criminals.
We created an office of transformation to fix broken processes just like we do in business, implementing monthly management reviews and setting metrics at every level.
The result of that work – and a committed, concerted effort by our state workforce – has resulted in $1.2 billion in unspent appropriations at the end of this last fiscal year.
All of that leads us here today and puts us in a position to hit the accelerator and take the Commonwealth to the next level.
Considering the current storm clouds on the horizon- we must have a sense of urgency.
The unfortunate reality is failed policies from Washington have created a challenging national economic environment.
Run-away spending drove inflation up and labor-force participation down. These are now twin threats to Virginian’s economic stability.
We’ve now seen slowdowns in hiring, layoffs in the tech sector, a sliding and volatile stock market, and an increase in consumer debt that makes it very clear families are losing the battle against inflation.
The clear consensus of our business leaders and economic experts is that Virginia will follow the national economy into a recession next year which could last six months or more.
This budget accounts for the reality of the looming economic storm, the need to accelerate results, and the fact that our state government’s financial condition has never been stronger.
Let me be clear, there is a big difference between Virginia’s economic trajectory and the current strength of the state government financial statements.
Over-taxation… buckets of federal money poured into Virginia during the pandemic… and, yes, some strong management practices have left us absolutely flush with cash;
including large carry-forward balances, record reserves well in excess of rating agency expectations, and a multi-year forecast projecting continued large annual surpluses.
We project for this biennium, $3.6 billion in unforecasted resources, despite prudently projecting increases to general fund revenue.
That’s on top of roughly $3.8 billion in reserve dollars, $2 billion of which is available as liquid cash in the state’s cash reserve fund.
Because of this, we can position Virginia to emerge even stronger on the other side of this recession.
Our carefully planned budget balances spending priorities and tax cuts, many of which are conditioned on meeting our revenue forecast.
We believe that even into the downturn, we will hit these revenue projections. This will allow us to make our investments to not only minimize the impact of the recession, but importantly allow us to accelerate out of it.
In other words – we can press forward responsibly, by going faster, not slower.
And that, friends, is the central focus of this budget: the acceleration budget taking Virginia to the next level. It’s time for
More Jobs
More Opportunity
Better Education
Safer Communities
Smarter Government
And when we bring it all together, Virginia can move forward on all fronts.
Let me start with jobs.
When I took office, Virginia was 47th in the country for job recovery coming out of the pandemic. Over the previous eight years, the economy grew at less than one percent per year.
On January 15th we declared Virginia open for business. Now, nearly 100,000 more Virginians are working today than at the year’s start, and we are now top 20 for recent job growth, outpacing some of our competitors, like South Carolina, Tennessee, and Georgia.
But… let’s be honest…. That is still not good enough. We want to be the number one state for jobs, number one for capital investment, number one for sites, and number one for talent.
We must go faster. We are not just going to compete; we are going to compete to win against the best – North Carolina, South Carolina, Georgia, Tennessee, Florida and Texas. These states are all top 20 in the nation in pandemic job recovery, and top 15 in population growth.
Competing with them is not Triple-A ball, it’s the major leagues. It’s not the JV. It’s the Varsity.
In the most recent fiscal year, there were over 7,000 economic development projects announced across the country representing over 600,000 jobs and almost $400 billion in capital investment.
Virginia’s share of that was 3.4%, while North Carolina was nearly double that.
And the difference between JV and varsity when it comes to job growth comes down to three things:
Taxes…
Sites…
And Talent…
When it comes to taxes, Virginia took a big step last year to cut costs for Virginians. Over $4 billion in tax relief translated to almost $1,500 in the first year for a typical Virginia family.
We can do even more!
To win the race for jobs, we must put ourselves on a path to reduce both individual and business taxes.
And if you look back at our competitor states, 2013 emerges as a pivotal year. Our competitor states set themselves on a path to lower business and individual tax rates.
Meanwhile, while Virginia stood still—and in fact- started increasing and adding new taxes and fees.
Virginia increased the gas tax and added new sales taxes. Local governments added new taxes and fees. There is even a brand-new regressive carbon tax: RGGI.
Add these piled up on the backs of Virginians and slowed us down.
So now, we turn the tide.
I am proposing that we lower Virginia’s business tax rate from six to five percent, the first step toward an ultimate goal of four percent by the end of our administration.
This first step will mean our business tax rate will be lower than Tennessee, Georgia, and Florida.
But more importantly, by setting ourselves on a committed path to an even lower rate – like Democrat-led North Carolina was able to do – we will send a clear signal to businesses that we want their jobs and to ignite the Commonwealth’s economic engine.
Starting down this path is to reject false choices presented in the past.
Yes, Virginia, we can choose competitive taxes, economic growth and critical investment priorities.
There’s more…
For our small businesses, like auto mechanics, hair stylists, or coffee shop owners, we will create a 10 percent deduction on your business income – a direct savings that small businesses will see right away.
Combined… those two measures result in $450 million in tax savings each year for businesses, and as we grow, we will lower rates further.
My fundamental belief is that money is better spent by the businesses, and the business owners, than by the government.
And the reality is that if we do not take advantage of our current financial position to make ourselves more economically competitive, we will only fall further behind these most competitive states.
As we take that big step on our competitiveness, we’re also going to do more to help families.
The budget amendments I am putting forward today will finish the job on doubling the standard deduction and expanding our military retirement tax relief to all veterans.
But that is not all we are going to do for Virginia families. I said we were going faster, and I mean it…
Like business taxes, we must realize what people pay in taxes is part of how they decide where to live.
We continue to see, year over year, more people move away from Virginia than move here from the other 49. And the vast majority of them are moving to states with lower, or no, state income tax.
South Carolina, Georgia, and North Carolina have all lowered their personal income tax rates. Tennessee has gone to zero, while Texas and Florida were already there… opening their doors for hardworking people who want to keep more of the money they rightfully earned.
We must start walking down that same path to lower rates.
I am proposing to reduce our income tax rate to 5.5%, saving Virginians over $700 million per year.
And again, this is just the beginning of what should be programmatic plan to lower rates over time.
We can grow our way to lower tax rates, keep Virginians, including our veterans, here, attract people from other states, and fuel the economic engine that will drive it all faster….and we are getting started now.
And as we go faster, we will attract major companies to invest in Virginia and create jobs.
But we also know… businesses like Lego with those good paying jobs must have somewhere to go.
When Virginia created the business-ready sites program in 2015, the General Assembly only invested $500,000 per year in the program.
Until now, the biggest site development grant ever made through that program was $1.3 million to the Southern Virginia Megasite at Berry Hill in Pittsylvania County.
Since 2017, North Carolina has won eight industrial mega projects each representing 700 or more jobs and over $500M in capital investment each. Georgia has announced five projects that exceed those same numbers.
Just this past week, South Carolina announced a battery facility creating over 1,000 jobs – on a 500-acre site.
Meanwhile, Virginia has won only one project on a site of over 250 acres over this time period: LEGO.
The opportunity cost of inaction is clear and alarming: since 2016, Virginia was eliminated on projects that represented more than 55,000 new direct jobs and $124 billion in capital investment for one reason: SITES.
We’ve begun to turn the corner…last year, Virginia’s budget put us in the game and when VEDP opened the first $90 million tranche of fundings for sites, they received over $335 million in requests.
Like I said, it’s time to quit playing small ball. We are here to win.
And of course, once you have the jobs and the sites, our people must be ready to fill those vacancies. That’s about talent.
I see it every day in the people I meet across Virginia. We have talented people, ambitious people….
People ready to do hard work and support their families. We just need to help them do it.
Right now….The State’s Workforce Development is spread out over 1,500 training programs, with roughly $485 million in federal and state funding in a siloed, bureaucratic way.
Before the General Assembly convenes in January, we will introduce a comprehensive work force consolidation bill to modernize how government supports talent development. It will be about efficiency and effectiveness, measuring outcomes, and getting people jobs
In these budget amendments, we are going to accelerate our investments to harness the talent of our people.
I am proposing over $60 million in additional investments in talent and workforce development.
This includes over $11 million in regional accelerator projects in Hampton Roads, Southside, Central, and Southwest Virginia.
$21 million for the Virginia Community College System to create credential opportunities in high school through enhanced dual enrollment to expand career placement services and accelerate the FastForward and G3 program.
It will take a lot of work, but by the time I leave office, I want us to have a plan to graduate every single high school senior with an industry ready credential.
We also include $5 million more for the Virginia Talent and Opportunity Partnership to support more innovative internship grant programs.
And $24.5 million to accelerate the business-led, GoVirginia Talent Pathways initiative with clear and specific guidelines on the kinds of programs that we will fund, matching local, regional, and private sector funding.
These efforts, when paired with our broader workforce reorganization will accelerate our efforts to help Virginians, including younger Virginians, obtain the skills necessary for good paying jobs with more opportunities to choose from.
Folks, this is how we compete to win.
We get our taxes down to be more competitive.
We make sure that we have sites on which to put the companies we attract.
And we invest in talent and workforce training, driven by business needs.
With my proposed changes, all told Virginia will have made a $5.9 billion commitment in its economic future… $5 billion in tax relief, $500 million in sites, and over $100 million in talent.
That is a statement.
This is not the only place where we are going to hit the accelerator.
Last year we passed the largest K-12 budget in history.
That included 10 percent raises for teachers, $100 million for a bipartisan lab school initiative to create choice in the public school system, $1.25 billion in school construction support, and a big step in elementary school literacy.
The dismal test results and NAEP scores we’ve seen over the last six months make it clear how much work we must do.
The COVID-19 pandemic exacerbated the learning loss brought on by systematic efforts over the last decade to lower standards.
In addition to the emergency actions already put in motion in October when we set aside $30 million in federal funds for learning recovery grants, I am proposing that we expand the use of reading specialists to 4th and 5th grade, a $17 million initiative that brings our biennial commitment on literacy recovery to more than $63 million dollars.
We are also including $7 million more for math specialists at the schools who need the most help, targeting the bottom 10 percent of schools in math performance based on Spring SOLs.
We are driving $20 million targeted to two of our biggest early childhood education deserts, in Petersburg and Hopewell and in far Southwest Virginia – Lee, Wise, and Scott Counties – both areas that saw significant pandemic-related learning loss.
This money will increase the availability of mixed delivery slots to an additional 1,100 children.
We must accelerate our efforts to bounce back from the damage done by closing our schools and lowering standards.
And let me be clear: teachers are at the heart of that. A good teacher connecting with a student one-on-one can change a child’s life. I’ve certainly experienced that, with Ms. Betty Weaver in the fourth grade, and I know everyone in this room has been impacted by a teacher.
Teachers work every day to make the world around them better – along with nurses and our law enforcement officers.
They are what we call our quiet heroes. One of the things I am most proud of in this budget is what we are doing for these quiet heroes.
Combined, it’s a package of $175 million for bonuses, reward incentives, expanded career pathways, and recruitment for the people who serve our communities every day.
The people who teach our children…. the people who care for us when we’re sick…. And the people who keep us safe this Christmas season.
For teachers, I am proposing a one percent retention bonus to be paid next August.
I am also proposing a $50 million investment in what we call the “A+ Teacher Reward Program.” This locally driven program will provide $5,000 bonuses to teachers based on merit.
This is a way to REWARD the teachers who have the biggest impact. Because they deserve it.
We all know we need nurses, especially those with advanced nursing credentials. Virginia hospitals have identified a shortage of more than 4,000 nurses at their facilities, and vacancy rates are estimated as high as forty percent across all health care.
While we always need more students in nursing school, the critical issue we face now is that as many as half students graduating in nursing school aren’t able to complete their clinical requirements and don’t enter the workforce.
Nursing education programs are unable to expand capacity because they lack clinical space and faculty.
That’s why this budget includes $35 million for the Earn to Learn Accelerator, where we will bring together our nursing schools and healthcare providers to expand the number of clinicians and clinical settings providing training for nurses.
Nurses will EARN – serving at their current certification level – while they LEARN the skills necessary to get an advanced certification.
An LPN could earn up to $24 an hour while they work the hundreds of clinical hours need to become an RN.
We will pair this with a $10 million investment in Nursing Preceptors – offering up to $5,000 per semester to veteran nurses who train the next generation of caring and skilled nurses.
We are going to accelerate the rebuilding of the nursing pipeline so we can care for one another.
And finally, in our “quiet heroes” package, we are going to state unequivocally once again that in Virginia – we back the blue.
Earlier this year, I launched Operation Bold Blue Line so we could dramatically accelerate our efforts to recruit and retain law enforcement.
Law enforcement vacancy rates are routinely 20 percent and are approaching 40 percent in some cities in Virginia.
Prosecution has dropped significantly… witnesses are less willing to come forward…. and it’s clear that Virginia’s blue line has gotten far too thin.
So, in a sustained effort to comprehensively address these challenges, we have allocated: $30 million for national recruiting strategies, and $20 million for additional violence intervention grants, and prosecutors who are tough on crime, $14 million for courts and public defenders and, $2.5 million for witness protection.
We know this strategy works because we’ve seen it. In Petersburg, earlier this year, the Virginia State Police worked with local law enforcement to launch an increased surge in law enforcement presence. The result was a 46 percent drop in homicides and aggravated assault with a firearm over a 120-day period.
The budget I signed in June included over $400 million for law enforcement, including historic pay raises. We are including almost $16 million more in these budget amendments to address compression issues for state police, sheriff’s deputies, and others caused by those pay increases.
This isn’t political. It’s commonsense. We’ve got to fix this for the women and men who put themselves on the line for us every day.
When we stand for and with law enforcement, giving them the tools and resources needed to do their jobs, and prosecute crime – our communities get safer.
We are so grateful for what these quiet heroes do for us every day, and I look forward to working with all of you to have their backs in this upcoming budget.
One of the issues that our law enforcement grapples with everyday are the problems with our behavioral health system.
The aftermath of the pandemic has illustrated many challenges. But none are greater than the behavioral health crisis we are experiencing across Virginia and across the nation.
Our jails, emergency rooms and hospitals are filled with people in mental health or substance use crisis. Law enforcement is overwhelmed. Our teachers are burned out. Parents and families feel lost and alone. Too many Virginians are afraid.
Almost 1.5 million Virginians have some form of a mental health issue. About 340,000 of those have a serious mental illness.
The number of fentanyl and opioid deaths, suicides, and yes, murders, devastating families is simply unprecedented.
Frankly, the Commonwealth’s behavioral health safety net is not equipped to address the increasing needs of Virginians.
Yesterday at Parham Doctor’s Hospital, I launched “Right Help, Right Now” an initiative that outlined a package of more than $230 million in new investments in behavioral health.
The funding we are going to deliver together is the first step in a three-year transformation toward a strong and stable health safety net. It’s part of a bold approach that will make major changes in the system.
I outlined Wednesday six pillars: same day care, relief of the burden on law enforcement, greater capacity, a focus on substance abuse, a stronger behavioral health workforce, and service innovations.
While I will not recap the entirety of the package, I want to reiterate the MAJOR steps we can take RIGHT NOW.
Yes, it’s a three-year plan, but the first steps are always the most important.
Which is why they include my proposal for $20 million to fully fund the necessary number of mobile crisis units, so we can ensure that every Virginian can get the right help, when they need it.
We are also asking for $58 million to increase the number of Crisis Receiving Centers, including FULLY FUNDING the number of necessary centers in Southwest Virginia and Hampton Roads – regions that have been too often left behind – and $20 million to contract with hospitals to build out psychiatric emergency services. These are TWO big steps on capacity building.
And, finally, on substance abuse. We will together launch an ongoing crusade against the horrors of fentanyl poisoning and opioid overdose.
I am so pleased that one of the principal issues the First Lady is focusing on is increasing awareness surrounding fentanyl poisoning, truly helping young people make wise choices.
That’s why she and our Attorney General launched the ‘One Pill Can Kill’ public awareness initiative around the dangers of counterfeit drugs and fentanyl.
The work we are about to finish together stands on the shoulders of the broad, bipartisan effort to strengthen Behavioral Health in the Commonwealth over the last 15 years. Senator Deeds, and so many others, have done yeoman’s work, and every success that comes in the years ahead is the result of those long, long hours. Thank you.
And finally, I want to address the real need to accelerate conserving and preserving our beautiful Commonwealth.
Whether it’s Blackwater Park I opened Tuesday in the City of Franklin or the new Mendota trail I opened this summer in Washington County… we are so fortunate to have these natural resources.
And we must preserve them.
I am proposing that we add $685 million to this budget for resiliency, the Chesapeake Bay, and our agricultural best management practices program. This includes: $100 million in additional general fund support to address the Richmond Combined Sewer Overflow.
A $200 million deposit into the newly created Resilient Virginia Revolving Loan Fund, for flooding prevention projects statewide and to secure our coast lines.
On top of that, we are going to provide support for the victims of flooding. We will invest another $11 million in emergency funds for the Buchanan County flood victims.
We will also attack key Chesapeake Bay 2025 goals by investing $50 million in additional funding for agriculture best management practices on our farms, and $237 million to fund necessary water system improvements to reduce nutrients.
While we may not meet our Chesapeake Bay 2025 goals by 2025, we are going to rapidly get back on track. Now, I told you to buckle up because we were going to go fast… and we’ve covered a lot of ground. Our economic competitiveness – tax cuts, sites, and talent.
Education…Our quiet heroes – teachers, law enforcement, and nurses…Turbocharging behavioral health. And protecting our beloved Virginia. As I wrap up, I want to make the simple case to you.
Over the remainder of this biennium, we are going to add $3.6 billion in resources. The package I am proposing today includes $1 billion in additional tax relief, and over $2.6 billion in new commitments. We have taken a prudent approach, designating some aspects of our tax relief package contingent on hitting our revenue targets in FY23.
The vast majority of those commitments are one time and reflect the reality that one time money must go to one time spending. We have also put contingency safeguards in place on other spending proposals, to guard against uncertainty in our already conservative revenue forecast.
And finally with the strong forecasted revenue growth overtime the years of this budget continue to be structurally balanced. I say all of that because I want to ask you to join me over the next few months in the spirit of partnership.
I fully understand General Assembly plays an equal role in crafting our budget, and I respect that.
And I look forward to hearing and working with each of you to get us across the finish line – on time this year.
There is so much work to do to make Virginia the best place to live, work, and raise a family – but we only get there by locking arms and working together.
The question before us is this: over the next few weeks, will you be bogged down by the partisan rancor of an election year? Or will we all together rise above and demonstrate that yes, we can get things done.
Virginians deserve it.
The spirit of Virginia is alive. And in order for our great Commonwealth to accelerate we must work together.
Virginians deserve leadership that works together, going faster to get more done.
I hope you’ll join me.
Thank you. God Bless You, and God Bless the Commonwealth of Virginia.
State News
Heavy traffic and rain forecasted for Memorial Day weekend – pack patience, plan ahead
Travel and weather forecasts for the 2023 Memorial Day weekend have the Virginia State Police strongly encouraging all drivers to be prepared before heading out to any holiday destination. Pack your patience for potential delays and congested highways due to significant traffic volume and inclement weather conditions. In addition, state police remind drivers to ditch distractions, buckle up, and never drive under the influence of alcohol or drugs. Travelers are also encouraged to “know before you go” by checking the Virginia Department of Transportation’s (VDOT) 511 traffic cameras and real-time information on road conditions by dialing 511 on a phone, visiting www.511Virginia.org or downloading the 511 app.
“Virginians need to make traffic safety a priority every day and, especially as we head into the Memorial Day weekend and summer travel season,” said Colonel Gary T. Settle, Virginia State Police Superintendent. “Memorial Day weekend is filled with celebrations, vacations, outdoor festivals, and backyard cookouts, which is why we need all motorists to share the road responsibly by driving smart, safe, and sober.”
Beginning Friday, May 26, 2023, VSP joins law enforcement around the country for the Operation Crash Awareness Reduction Effort (C.A.R.E), a state-sponsored, national program intended to reduce crashes, fatalities, and injuries due to impaired driving, speed, and failing to wear a seat belt. The 2023 Memorial Day statistical counting period begins at 12:01 a.m. on May 26 and continues through midnight Monday, May 29, 2023. All available state police troopers and supervisors will be on patrol through the holiday weekend to help keep traffic moving safely and responsibly.
On Monday, May 22, 2023, state police participated in the kickoff for the annual “Click It or Ticket” campaign. This enhanced enforcement and education effort aims to further emphasize the lifesaving value of seat belts for every person in a vehicle.
During the 2022 Memorial Day Operation C.A.R.E. initiative, 16 individuals lost their lives in traffic crashes on Virginia roadways.* During last year’s combined Memorial Day C.A.R.E. initiative and the annual “Click It or Ticket” campaign, Virginia Troopers cited 4,888 speeders and 1,875 reckless drivers and arrested 90 impaired drivers. In addition, 659 individuals were cited for seat belt violations, 117 were cited for child safety restraint violations, and 144 felony arrests were made. Virginia State Police also assisted 1,735 disabled motorists.
With the increased patrols, VSP also reminds drivers of Virginia’s “Move Over” law, which requires motorists to move over when approaching an emergency vehicle stopped alongside the road. If unable to move over, then drivers are required to cautiously pass the emergency vehicle. The law also applies to workers in vehicles equipped with amber lights.
State News
States see record low unemployment across the U.S.
Across much of the country, the jobs market is as strong as it’s ever been, and Black women, young people, and people with disabilities are among the workers benefiting, recent U.S. Bureau of Labor Statistics data show.
Twenty states reported an unemployment rate under 3% in April, while 15 states saw record lows, led by South Dakota at 1.9%, followed by Nebraska at 2%, and New Hampshire and North Dakota at 2.1%. The national rate was 3.4%. Other states that saw their unemployment rates reach levels not seen since the BLS began recording them in 1976 include Alabama, Arkansas, Kentucky, Maryland, Maine, Montana, Ohio, Pennsylvania, and Wisconsin, according to BLS data released on Friday.
Virginia unemployment
According to Bureau of Labor Statistics data, Virginia’s unemployment rate dropped to 3.1% in April, a slight decrease from its March rate and below the national rate of 3.4%. A May 19 press release from Gov. Glenn Youngkin’s office also noted the state recorded its highest labor force participation rate since June 2014 in April, at 66.2%.
“The Virginia labor market continues to show strength during the first part of 2023,” said Secretary of Commerce and Trade Caren Merrick. “Despite large gains in labor force participation, filling open positions remains a challenge for businesses in the commonwealth, and we remain laserfocused on getting more Virginians into the workforce.”
Recent data from the Virginia Employment Commission also found there was just under one unemployed worker for every two job openings in Virginia in March 2023 — a measurement known as the “job seekers ratio.” That ratio has held steady since July 2021.
Mark Vitner, the chief economist at Piedmont Crescent Capital in Charlotte, North Carolina, said major metropolitan areas and emerging metropolitan areas in the South have benefited from recent shifts in the labor market. In Florida, the labor market in Miami, Fort Lauderdale, West Palm Beach, Orlando, Tampa, and Jacksonville has been growing rapidly, he said.
“Huntsville, Alabama, is one of the fastest growing markets, and it’s a big tech market in aerospace and in defense. We’ve seen a huge influx from California into Huntsville, and Chattanooga, Tennessee, has seen an influx of investment in the automotive industry,” he said. “The Port of Savannah has been the fastest-growing port in the country. It’s just fueled enormous growth in the industrial market in Savannah and, more broadly, in south Georgia. These markets have low unemployment rates and very strong job growth, and so that’s what you want to see that mix of.”
Vitner added that the rural areas of states with low unemployment may have a different story to tell.
“States that have a larger rural population tend to have lower labor force participation, and given the stronger overall job growth, it results in some very low unemployment rates without particularly strong nonfarm employment,” Vitner said.
To be sure, in some states, the number of people who have lost work has increased. Ten states had rates of 4% or higher than the nation. Nevada, which had the highest unemployment rate in the country in 2020, has seen job gains but still had the nation’s highest rate in April, at 5.4%. States like Washington and California, which have seen large layoffs among tech companies, also have seen their job markets slightly worsen.
But the recovery has also lifted up workers often sidelined in worse economic times. Bureau of Labor Statistics data on the demographics of workers and their unemployment rates for April showed that employment among Black women climbed to a 22-year high. Women’s labor force participation is also moving up. It increased by 0.6 of a percentage point in the past year.
That growth is affecting women of all ages and education levels, and Black women and Hispanic women have had some of the biggest labor force participation growth, at a 2.2% and 2.1% increase over the same period, according to an analysis from the University of Michigan’s Betsey Stevenson, a professor of economics, and Benny Docter, a senior policy analyst.
The unemployment rate for people with disabilities, while still high compared to the overall unemployment rate, is 6.3% compared to 8.3% a year ago. In March, the unemployment rate for people aged 16 to 24, who are already benefiting from pre-pandemic labor market conditions, marked a 70-year low at 7.5%, according to the Economic Policy Institute. In April, it dipped further for that age group to 6.5%.
“What happens when the economy is strong is that you can bring marginalized groups of workers off of the sidelines because employers are more open to different folks essentially,” said Katherine Gallagher Robbins, a senior fellow at the National Partnership for Women & Families. “Part of the consequence of this strong labor market is that you’re seeing low unemployment rates for Black workers, and in particular Black women and for disabled workers. The rates for disabled workers have been both in terms of unemployment, but also in terms of participation, really strong compared to what we have seen in years gone by.”
Gallagher Robbins added that Gen Z workers came into a very strong labor market, which bodes better for them than previous generations, but it also means they have more to lose if the economy falters soon.
“They’re hopefully in a position of setting themselves up for lifelong higher earnings, and yet they will be amongst the first to go. They tend to work in industries where there’s more churn,” she said, such as retail and hospitality.
Many industries are also showing fast job growth right now, Docter said, and growth has been largest in education and health care.
Private sector education and health services “had been the strongest job grower through the time between the last recession and 2020, and it got knocked pretty far off course in a way that was pretty atypical. Since then, we’ve seen really steady, really impressive growth most months (in those areas), and I expect that we still will for a while,” he said. “It’s nowhere near its pre-pandemic trajectory, so there’d be over 700,000 more jobs in that industry today than there are. And so there’s a lot of space there to grow if you look at the numbers this month. … There’s nothing really to say that those industries are going to falter any time soon.”
The labor market is still leaning toward greater power for workers as well, which has been positive for labor organizers, Gallagher Robbins said. Americans’ approval of labor unions has increased from 64% before the pandemic to 71% in 2022.
“[Worker bargaining] is on the rise and not accidentally. … Not everything has been successful, but those [organizing efforts] coming to the fore now, I think, are no coincidence,” she said. “That is also something that is interacting and intersecting with the economy of the moment, and if we shift back towards a place where workers have less bargaining power, I think that that’s going to have an impact on the ability to organize.”
Vitner said the retirement of Baby Boomers provides many workers with greater labor power than they previously enjoyed.
“Workers clearly have more negotiating power today. One of the things that’s in their favor is that we have a rising tide of Baby Boomers that are leaving the workforce. And that makes for a very tight labor market, and certain industries have even greater challenges because their workforce skews a bit older,” he said. “Younger workers have a bit more negotiating power, but they have a brighter outlook. They’re entering the workforce at a time where there’s going to be opportunities to advance relatively quickly.”
Inflation has made it more difficult for many workers to enjoy these gains, but that could be changing. Although inflation is still far above the Federal Reserve’s 2% target, it is moderating, and wages are now outpacing inflation, at a 6.1% increase in median weekly earnings for January, February, and March compared to a year before. During the same period, there was a 5.8% rise in consumer prices. In April, average hourly earnings rose by 4.4% over the past 12 months.
by Casey Quinlan, Virginia Mercury
Virginia Mercury is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence. Contact Editor Sarah Vogelsong for questions: info@virginiamercury.com. Follow Virginia Mercury on Facebook and Twitter.
Regional News
Suez Service ‘First-in call’ expands Port of VA connection to SE Asian markets
The number of first-in vessel services calling The Port of Virginia® is growing and last week the port welcomed the latest addition to that list, the ONE Munchen, which left Southeast Asia and headed straight to Virginia. Reworked service will compliment Port’s newest rail link to Memphis.
The arrival of the ONE Munchen last Tuesday at Norfolk International Terminals signals the beginning of a reworked EC4 vessel service that now has The Port of Virginia as the first US East Coast stop. The weekly service links the port with several important Southeast Asian markets.
“The cargo owners will benefit from this reworked service because a first-in port call allows them to get their cargo quicker and it gives cargo owners more markets, more options, for moving their exports and imports,” said Stephen A. Edwards, CEO and executive director of the Virginia Port Authority. “This service is taking advantage of our ability to efficiently handle big ships, their cargo and our rail reach into critical Midwest population and manufacturing centers.”
Edwards said the reworked EC4 will pair nicely with the port’s service to its newest rail market, Memphis. In early April, the port began offering daily rail service to Norfolk Southern’s regional intermodal terminal in Rossville, which is just outside of Memphis.
“Both exporters and importers were asking us [Norfolk Southern and the port] to develop a high-quality Memphis rail service,” Edwards said. “Now we have service into Memphis, which is an important step south and west for us. Couple that with another first-in vessel call that uses the Suez Canal and this works to the advantage of cargo owners for several reasons. The first is an alternative to the US West Coast, second is speed to market and third is access to our growing rail network.”
Edwards also pointed out that The Port of Virginia was ranked the nation’s second highest performing in The Container Port Performance Index 2022 (CPPI), which was published in earlier this month. The CPPI ranks the world’s leading container ports based on data collected by World Bank, with contributions from S&P Market Intelligence IHS Markit.
“Our performance is a clear reason why we are attracting first-in vessel calls and new rail services,” Edwards said. “Our ability to service vessels and get them back to sea quickly and safely is being recognized by independent sources. We have a $1.4 billion expansion effort underway and the improvements we are making are going create even greater efficiency and continue to drive cargo to and through this port.”
In the report, Virginia’s port was 52nd out of the world’s top 370 ports. The rankings are based on total number of hours a ship spends at a port, which is measure as the elapsed time between when a ship reaches a port to its departure from the berth having completed its cargo exchange.
There are four ocean carriers in the EC4 service, ONE (Ocean Network Express), Hapag-Lloyd, Yang Ming and HMM (Hyundai Merchant Marine), that all contribute vessels to the service; the 14,000 TEU (twenty-foot equivalent unit) ONE Munchen is owned by ONE. The port call rotation includes Kaohsiung, Xiamen, Hong Kong Yantian, Cai Mep, Singapore, (Suez Canal transit), Norfolk, Savannah, Charleston, New York.
State News
Virginia State Police honors fallen heroes at 2023 memorial service
In an emotion-filled ceremony, the Virginia State Police gathered together with their families and communities on May 24, 2023, to remember the heroes of law enforcement who made the ultimate sacrifice while serving the citizens of the Commonwealth of Virginia. The event highlighted the dedication and courage of these officers, echoing the sentiment that their duty, honor, and selfless service will never be forgotten.
Central to this year’s Memorial Service was the unveiling and dedication of the official portrait of Captain J. Gregory Blankenship, the former division commander of the Bureau of Criminal Investigation’s (BCI) Salem Field Office. A respected figure in Virginia’s law enforcement community, Capt. Blankenship tragically passed away due to COVID-19 complications on August 7, 2021, aged 61. He devoted 28 years of his life to the service of the Virginia State Police.
Captain John Gregory Blankenship,Virginia State Police, End of Watch Saturday, August 7, 2021
In tribute, Capt. Blankenship’s portrait will be hung in the Colonel C.W. Woodson Jr. Memorial Gallery within the Virginia State Police Academy, joining the solemn ranks of 66 other brave men and women commemorated there. Blankenship is also recognized amongst the thousands honored at the National Law Enforcement Officers Memorial in Washington, D.C.
Adding a personal touch to the occasion, the former Virginia State Police trooper and retired Bristol, Va. Police Chief Bill Price served as the keynote speaker. The touching harmonies of the Powhatan High School “One Voice” Concert Choir singing the National Anthem provided a stirring backdrop to the poignant ceremony.
The Memorial Service also paid tribute to 14 other law enforcement officers marking significant milestones this year, their years of passing ranging from 10 to 95 years ago. Each tribute was marked by a solemn bell toll and an Honor Guard salute, reinforcing the perpetual bond between the police force and those they have lost.
Among the honored were Inspector W. Neville Hatcher, Sergeant Charles W. Puckett, Trooper Robert E. Caldwell, and Special Agent in Charge Rodney D. Grimes, to name just a few. More information about these brave individuals can be found on the Virginia State Police’s website.
The Virginia State Police’s 2023 Law Enforcement Officers’ Memorial Service served as a poignant reminder of the risks law enforcement officers undertake every day to serve and protect their communities and the enduring respect and honor they hold for their fallen comrades. As the gathered crowd slowly dispersed, it was clear that the legacy of these brave individuals continues to inspire the current and future generations of Virginia’s law enforcement.
State News
Attorney General Miyares sues Avid Telecom over illegal robocalls
On May 23, 2023, Attorney General Jason Miyares sued Michael D. Lansky, LLC, which does business under the name Avid Telecom, its owner Michael Lansky, and Vice President Stacey S. Reeves, for allegedly initiating and facilitating billions of illegal robocalls to millions of people and violating the Telephone Consumer Protection Act, the Telemarketing Sales Rule, and other federal and state telemarketing and consumer laws.
“Avid Telecom refuses to stop their robocalls, despite receiving over three hundred warnings. They have routed nearly 235,000,000 calls to numbers with Virginia area codes. Avid Telecom even went as far as spoofing the Caller ID numbers of federal, state, and local law enforcement agencies, including the Virginia State Police. It’s obvious that the only way to get this organization to stop harassing Virginians is by taking them to court and holding them accountable,” said Attorney General Miyares.
Avid Telecom is a Voice over Internet Protocol (VoIP) service provider that sells data, phone numbers, dialing software, and/or expertise to help its customers make mass robocalls. It also serves as an intermediate provider and allegedly facilitated or helped route illegal robocalls across the country. Between December 2018 and January 2023, Avid sent or attempted to transmit more than 24.5 billion calls. More than 90 percent of those calls lasted less than just 15 seconds, which indicates they were likely robocalls. Further, Avid helped make hundreds of millions of calls using spoofed or invalid caller ID numbers, including more than 8.4 million calls that appeared to be coming from government and law enforcement agencies, as well as private companies.
Avid Telecom allegedly sent or transmitted scam calls about Social Security Administration scams, Medicare scams, auto warranty scams, Amazon scams, DirecTV scams, credit card interest rate reduction scams, and employment scams. Examples of some of these scam calls are available to listen to here and here.
The USTelecom-led Industry Traceback Group, which notifies providers about known and suspected illegal robocalls sent across their networks, sent at least 329 notifications to Avid Telecom that it was transmitting these calls, but Avid Telecom continued to do so.
Today’s legal action arises from the nationwide Anti-Robocall Multistate Litigation Task Force of 51 bipartisan attorneys general. In August, Attorney General Miyares joined this Task Force to investigate and take legal action against those responsible for routing significant volumes of illegal robocall traffic into and across the United States.
The Federal Trade Commission and the Social Security Administration’s Office of the Inspector General also provided investigative assistance in this lawsuit.
Attorney General Miyares is joined in filing today’s complaint by the Attorneys General of Alabama, Arizona, Arkansas, California, Colorado, Connecticut, D.C., Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.
A copy of the complaint is available here.
State News
Virginia man sentenced to over 15 years in federal prison for methamphetamine distribution and illegal firearm possession
Justine Kyle Elliott has been sentenced to over 15 years in federal prison after pleading guilty to drug trafficking charges and illegal firearm possession, according to U.S. officials last week.
Justine Kyle Elliott
Elliott, 33, was charged with conspiring to distribute and possess with the intent to distribute 500 grams or more of methamphetamine, possessing with the intent to distribute 50 grams or more of methamphetamine, and illegal possession of firearms as a convicted felon.
The conviction can be traced back to an incident in August 2021 when Elliott was arrested in Coeburn, Virginia after police found him asleep at the wheel of a vehicle parked in a bank drive-thru. Upon searching his vehicle, authorities discovered a large quantity of methamphetamine and multiple firearms.
Elliott later confessed to his involvement in distributing methamphetamine across Southwest Virginia. He was found to have trafficked significant quantities of crystal ice methamphetamine and cocaine into the region over a sixteen-month period, including more than 30 kilograms of methamphetamine, some of which was 100% pure.
The announcement was made by United States Attorney Christopher R. Kavanaugh, Virginia Attorney General Jason Miyares, and Special Agent in Charge Craig B. Kailimai of the ATF’s Washington Division.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, along with the Coeburn Police Department. Special Assistant United States Attorney M. Suzanne Kerney-Quillen, a Senior Assistant Attorney General with the Virginia Attorney General’s Major Crimes and Emerging Threats Section, prosecuted the case for the United States.
This sentence highlights the ongoing efforts of law enforcement agencies to tackle drug trafficking and illegal firearm possession in the region, signaling a major victory in the war against drug-related crimes in Southwest Virginia.
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