The Virginia General Assembly adjourned sine die back in June of this year when the work of the legislature was complete with one notable exception: a mid-point revision of the biennium budget on which the House, Senate, and Governor could not agree had gone to a conference committee that could not agree on its final form. The lack of agreement did not cause the kind of budgetary crisis seen at the federal level when the federal government faces a shutdown without a budget. In Virginia the legislature passes a biennial budget good for two fiscal years and at the halfway point such as this year passes a revision to the existing budget. The revisions take into account any additions or subtractions to revenue as a result of what is happening in the economy and any changes in priorities impacting the budget that came from the outgoing governor but is now being implemented by the current governor. Most years these revisions pass fairly easily. This year was an exception in that revenues increased substantially over the last couple of years with an economy that did much better than economists predicted, and the state received gobs of federal monies from Covid-related programs and economic recovery monies intended to stave off a recession. In many respects appropriating new monies can be as difficult as having to skimp by to balance a budget for the unmet needs are so great.
Last week there was an announcement among the Governor and the nine senators and six delegates that make up the conference committee that an agreement had been reached except only the roughest outline of what it contains is known. Hopefully there are no details that will blow up the deal or no misunderstanding that will cause it to fall apart.
In broad terms the disagreement had been from the Governor who wanted to return more than a billion dollars to the richest Virginians and corporations in the form of tax cuts and the Senate Democrats who constitute a majority in that body and wanted to appropriate more monies for education and mental health and to limit any tax relief to one-time tax rebates that would not recur unless the state realized an economic bonanza as it has recently. Cutting tax rates would reduce state tax revenues into the future indefinitely at a time when school and mental health funding have been shown to be inadequate and would reward the wealthiest in a state that already has a low rate of taxation on the wealthy. Rebates reward all taxpayers including those at the lowest income levels and are made available only as the state realized higher than usual tax revenues.
Those essential differences have had the Governor and the House Republicans on one side and the Senate Democrats on the other side for months. A special thank you goes to Senators Janet Howell and George Barker for holding firm on the Senate position that for the most part seems to have prevailed. After months of discussion the Governor and the Senate Republicans blinked!