(The Center Square) – Nearly two weeks after the Virginia General Assembly adjourned sine die, budget wranglers are still trying to reach an agreement on amendments to the state’s biennial spending plan.
Lawmakers in the House and Senate remain divided over amendments to the state's budget signed last summer. The main sticking point for budget negotiators comes down to the inclusion of $1 billion in tax cuts proposed by Gov. Glenn Youngkin.
The proposed $1 billion in tax cuts floated by Youngkin would come on top of $4 billion in tax cuts passed in last year’s budget. With the state eyeing a $3.6 billion budget surplus, Youngkin and Republicans in the General Assembly have argued there is room for further tax cuts, while Democrats have said the money should be used to bolster funding for education and other priorities.
Last month, the House passed budget amendments that included the tax cuts, while the Senate passed a proposed spending plan without any of the proposed cuts.
Co-Chair of the Senate Finance and Appropriations Committee Sen. George Barker, D-Fairfax, told The Center Square this week no agreement on the budget amendments has been reached just yet. He said spending priorities in the House and Senate are different, noting state Senators are focused on increasing funding in four main areas – K-12 education, higher education, public safety and mental health.
Del. Barry Knight, chair of the House Appropriations Committee was not available for an interview, and the office of Del. Terry Austin, R-Bedford, vice chair of the House Appropriations Committee, did not respond to several interview requests.
Barker said he believes if it were not for the debate over tax cuts, he believes “most of the House members, both Republican and Democrat, would be supportive of that as the funding for elementary and secondary education, higher education, mental health and public safety.”
Barker added he thinks “there's clearly an opportunity to get some tax cuts included” in the budget amendments, but said “not all tax cuts are the same.” Democrats disagree with proposals to cut the corporate tax rate from 6% to 5% and slash the top individual income tax from 5.75% to 5.5%. In Virginia’s tax code, the top individual income tax credit begins at $17,001.
“This is my 16th year in the Senate, and I don't remember any business saying this corporate tax code is too high,” Barker said. “They understand that paying taxes is part of doing business.”
“It's unlikely that the Senate conferees are going to agree to a package that has a reduction in income taxes for the top earners and not for people who are more middle class,” Barker later added.
The Senator did not specify which tax cuts he believes could be included in the amended spending plan, but said he thinks raising the standard deduction could be up for discussion.
Del. Rob Bloxom, R-Accomack, a House conferee on the budget amendments, told The Center Square budget wranglers are still divided over what level of revenue they are working with – namely, tax cuts versus spending.
“I think once you figure out the revenues, then everything from spending on higher ED to K-12 to mental health – you just go right through the budget,” Bloxom said.
While a deal on the amended spending plan remains in the works, Barker said he believes lawmakers will “most likely” reach an agreement. The Senator estimated the “most likely” timeline would be an agreement reached some time between late March and mid-April.
Knight, the chair of the House Appropriations Committee, previously told reporters once an agreement is reached between the House and the Senate, they will notify Youngkin to call a special session.
“I'm optimistic,” Barker said of reaching an agreement. “I think we will get down to serious negotiating pretty soon. We're going to be looking at some options over the next couple of weeks, and we'll see where we come out.”