Virginia Budget Negotiators Say Deal Likely By End of Week

Virginia budget negotiators said Wednesday they hope to reach a deal on long-awaited amendments to the state’s two-year spending plan by the end of the week.

The signs of progress, which have followed months of on-again, off-again talks between budget leaders in the Democratic-controlled Senate and Republican-controlled House of Delegates, came as Gov. Glenn Youngkin urged the General Assembly to reach an agreement.

Budget negotiators Sen. George Barker, D-Fairfax, Del. Barry Knight, R-Virginia Beach, and Sen. Janet Howell, D-Fairfax, in Richmond Aug. 23, 2023. (Sarah Vogelsong /Virginia Mercury)

“Our course for the current budget is clear,” Youngkin told the joint money committees of both chambers in an address in Richmond Wednesday morning. “Please send me one.”

Speaking with reporters after his speech, Youngkin said lawmakers needed to “move fast” to reach a deal, pointing out he will soon begin work on his proposal for the next two-year budget, which is traditionally presented to the committees in June.

“Eventually, this just becomes a moment where we say, ‘You can’t reach a deal, fine. We’ll just take care of it in January,’” he said. “And that clock is ticking.”

Sen. Janet Howell, D-Fairfax, who, along with Sen. George Barker, is leading negotiations for Senate Democrats, said she was “quite sure we’re going to have a deal probably by the end of this week.”

Lead House negotiator Del. Barry Knight, R-Virginia Beach, said all of the parties “concur on that.”

“We’re all working as hard as we can on that. Nobody’s stalling anybody. We’re all getting along. We’re meeting. Last night it was well after 10 o’clock when we broke up,” he said.

Virginia operates on a two-year budget cycle, with lawmakers traditionally revising the plan in off years during the winter legislative session to account for not only changing fiscal circumstances but also new legislation. This year’s extended budget impasse has left billions in surplus funds unallocated while also stalling other initiatives greenlit by the legislature, such as new positions to enforce stricter rules on hemp products, additional teacher raises, and major investments in the state’s struggling behavioral health system.

As Virginia budget negotiations drag on, here’s what hangs in the balance

Democrats and Republicans have largely presented the disagreement as being over whether the surplus should go toward greater investments in state services like education or should be seen as an example of excess taxation and returned to residents through long-term tax cuts.

On Tuesday, negotiators told The Richmond Times-Dispatch and Virginian-Pilot they may have reached a deal that would provide one-time tax rebates of $200 to individuals and $400 for companies as well as increases to the standard deduction and teacher raises.

Despite that reporting, Howell, Knight, and Barker on Wednesday would not confirm any of the terms of a potential agreement, saying only that they were close to a deal but had several unspecified “sticking points” to work out.

“We have the answers to your questions, we’re just not going to tell you right now until we have a finished product,” Knight told reporters.

Howell characterized the ongoing talks as “very productive and very cordial” and characterized some delays as due to legislators’ varied schedules.

“So many people have travel plans and vacation plans,” she said. “It’s hard to get everybody back, and that’s creating some consternation.”

This week’s apparent breakthrough followed a public breakdown in talks in July when Knight announced Democrats had “decided to abandon” a deal he said the parties had reached in February but decided to delay announcing due to the stiff primary challenge Barker was facing. (Barker lost his primary in June.) Democrats, in turn, said there had never been a firm February agreement and that the Republicans had walked away from the table over their insistence on long-term tax cuts.

Asked about the potential deal reported by the Times-Dispatch that would provide one-time tax rebates instead of more permanent cuts, Youngkin said he thought it was “a moment where we’re going to come together around the reality that we can provide one-time tax relief in refunds but also begin to get at some of the more permanent tax relief.”

“I’m looking for a billion dollars in tax relief,” he said. “I know that we can afford permanent cuts, and if we take a moment here and provide the one-time tax relief and we move forward for permanent cuts next year, that’s a compromise that I’d be willing to accept.”

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