Virginia Viewpoint Budget Briefing: First Steps To A Final Budget

Budget Briefing: First Steps To A Final Budget

In this update: A summary of the Governor’s proposed budget amendments, along with an update on the special elections that will fill vacancies ahead of the 2025 Regular Session of the Virginia General Assembly.

On Wednesday, Governor Youngkin introduced amendments to the 2024-2026 biennial budget, kicking off a months-long process of review and negotiation with the legislature. While the Governor has outlined his priorities, the Virginia General Assembly—narrowly controlled by Democrats in both chambers—will soon have the opportunity to propose their own changes. This dynamic of divided government is likely to necessitate bipartisan compromise to address the Commonwealth’s needs.

With his term set to end in January 2026 and Virginia’s Constitution limiting him to one term, this budget represents Governor Youngkin’s defining opportunity to shape state spending and policy priorities in his last full year as Governor. In his remarks on the budget, the Governor emphasized recurring themes of his administration, including tax relief, economic development, and public safety.

The Governor’s office has also provided a document highlighting his top funding priorities, while the full list of changes can be found here. Key budget highlights are provided below.

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Governor Youngkin’s Proposed Budget Amendments

Tax Policy Adjustments

• Car Tax Relief: A $1.1 billion proposal introduces refundable income tax credits—$150 for individuals and $300 for joint filers—targeting residents in areas with car tax rates at or below 2.5%.
• Exemption for Tips: Income from tips in the food service, personal service, and hospitality industries would be exempt from state income tax, impacting an estimated 250,000 workers.
• Standard Deduction Made Permanent: The budget proposes making the current standard deduction of $8,500 for individuals and $17,000 for joint filers permanent.

Education Funding

• K-12 Support: Additional funding of $517.6 million increases total K-12 spending to over $22 billion for the biennium, focusing on teacher salaries and direct student aid.
• English Learners: The budget raises funding for English language education by $110.7 million.
• Lab Schools: $25 million is allocated to support the development of laboratory schools in partnership with Virginia’s Historically Black Colleges and Universities (HBCUs).

Public Safety and Security

• Law Enforcement: $150 million is proposed for upgrades to Virginia State Police facilities and officer pay increases.
• School Safety: Restored funding of $6.8 million would bolster school security initiatives, including school resource officers, in schools that do not currently have an SRO or SSO or need additional law enforcement personnel or equipment.

Healthcare and Community Support

• Maternal Health: The amendments include funding increases for maternal health programs, aiming to improve care and outcomes.
• Disaster Relief: A new Disaster Assistance Fund at the Department of Housing and Community Development with $127 million to assist with relief efforts, including $25 million as a direct allocation for immediate recovery efforts.

Economic Development and Infrastructure

• Business Ready Sites: $50 million is proposed to expand the Virginia Business Ready Sites Program, designed to attract economic development.

Special Elections

Two vacant seats in the Senate of Virginia and one in the House of Delegates are set to be filled through special elections on January 7 — just one day before the General Assembly convenes for the 2025 Regular Session.

In Senate District 10, Republican Luther Cifers has clinched his party’s nomination after Senator John McGuire’s successful bid for Congress. Cifers is set to face Democrat Jack Trammell in a race widely considered to favor Cifers.

In eastern Loudoun County’s Senate District 32, Delegate Kannan Srinivasan was selected as the Democratic nominee to fill the seat vacated by Congressman-elect Suhas Subramanyam. Srinivasan will go up against Republican Tumay Harding in what is considered a Democratic stronghold.

Meanwhile, the seat  previously held by Srinivasan will also be decided on January 7. Democrat JJ Singh and Republican Ram Venkatachalam are competing for the opportunity to represent 26th House District.

Looking Ahead

The Virginia General Assembly will gavel in for the 2025 Regular Session on January 8, kicking off its vetting process on the budget and a flurry of legislation. Within the short 46-day period, lawmakers will deliberate, negotiate, and revise the proposed amendments, which will then be returned to the Governor’s desk for review.

With such a tight timeline, efficiency will be key during the 2025 Session.

Youngkin unveils ambitious budget proposal for his final year as governor

By Markus Schmidt, Virginia Mercury

Youngkin proposes tax relief on tips and cars in his adjusted Virginia budget plan

By Olivia Diaz, Associated Press

Youngkin unveils budget amendments, proposes plan to to help offset the cost of ‘hated’ car tax

By Tyler Englander, ABC 8News

JJ Singh wins democratic nomination for House District 26 in firehouse primary

By 7News Staff, ABC 7 News

Tumay Harding, Kannan Srinivasan to face off in VA Senate District 32 Special election

By 7News Staff, ABC 7 News

Virginia prepares for special elections as McGuire, Subramanyam head to Congress

By Markus Schmidt, Virginia Mercury

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