RICHMOND — Gov. Glenn Youngkin has proposed more than $3.5 billion in amendments to the $158 billion two-year budget left by his predecessor, Gov. Ralph Northam, but doesn’t say where he would find the money to pay for his priorities.
The centerpiece of the new governor’s proposed amendments is a campaign promise to double the standard deduction for state income tax filers at a cost of more than $2.1 billion in state revenues.
Youngkin also proposes to exempt up to $40,000 a year in military retirement benefits from income tax, phased in over three years at a total cost of $515 million.
The other big piece of the new governor’s tax cut package would raise the amount of money given to taxpayers as one-time rebates by about $203 million for a total of about $1 billion when combined with tax relief that Northam proposed in his outgoing budget.
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The amendments, released late Friday afternoon, break precedent with the past three governors—one Republican, two Democrats—whom the House Appropriations Committee did not allow to propose budget amendments directly, but only through members of the House of Delegates.
“The practice has been you need to pay for what you’re proposing,” former House Appropriations Chairman Chris Jones, R-Suffolk, said Monday
Jones confirmed that he and his predecessor, former Chairman Lacey Putney, I-Bedford, did not allow incoming governors to propose executive amendments to the budget—from Gov. Bob McDonnell, who took office in 2010, through Gov. Terry McAuliffe in 2014 and Northam in 2018.
“The custom and practice was the governor was not allowed any amendments,” Jones said, noting that governors propose the budget in subsequent years for the General Assembly to consider.
House Appropriations Chairman Barry Knight, R-Virginia Beach, said Monday that he is not bound by precedent because the assembly allowed budget amendments by two previous incoming governors, Mark Warner and Tim Kaine, both Democrats now serving in the U.S. Senate.
McDonnell took office during the Great Recession, Knight noted. He said he gave Youngkin an additional week to submit budget amendments, which were due the day before he was inaugurated as Virginia’s 74th governor.
“He understands the separation of powers,” the chairman said. “I have no doubt we can co-exist.”
Senate Finance Chair Janet Howell, D-Fairfax, said she also gave the new governor an additional week to propose budget amendments. “We will treat them like any other member’s,” she said.
But Howell, whose committee is controlled by Democrats, added, “A responsible governor would have explained how to pay for them.”
Knight, who became chairman this month after Republicans gained a 52-48 majority in the House, said few delegates adhere to the past committee practice of requiring them to show how they would pay for their proposals, so he won’t require it of the governor.
“I’m not going to hold him to that,” he said.
Macaulay Porter, a spokesperson for Youngkin, said, “The governor appreciates the General Assembly’s willingness to accept a package of amendments that reflects the governor’s priorities for this budget cycle. He especially appreciates Senator Howell’s willingness to do so as a gesture of good faith.”
“The package reflects the priorities outlined in the day one game plan, and the governor looks forward to working hand in hand with the General Assembly to incorporate them into the budget they are already working on.”
Youngkin’s 21 proposed line-item amendments would add more than $3.5 billion to the budget that Northam proposed last month. Northam’s proposal left about $150 million unappropriated, which means budget writers would have to cut from Northam’s plan in order to back the new governor’s proposals.
Youngkin is counting on unprecedented revenue growth projected in Northam’s parting budget, which could increase again when the new administration considers a potential mid-session revenue forecast next month.
“I’m optimistic it will be reasonably good news,” Secretary of Finance Steve Cummings told the House Appropriations Committee on Monday.
Tax cuts Youngkin wants to give rebates of $300 to individual taxpayers and $600 to couples, compared with Northam’s proposal of $250 for individuals and $500 for couples. House Finance Chair Roxann Robinson, R-Chesterfield, has proposed legislation to require the refunds.
He also proposed a $75 million credit next year on income taxes paid by small businesses, and included language in the budget bill for this fiscal year to require the tax rebates and suspend the most recent 5-cent-per-gallon increase in the state gasoline tax.
Other big winners in Youngkin’s proposed amendments are economic development initiatives proposed through the existing GO Virginia grant program and a proposal by the Growth4Virginia business coalition for spending on higher education.
The governor proposes almost $84 million for GO Virginia “talent pathways” program and $32 million for a higher education program to expand paid internships and other “work-based learning opportunities” with state businesses.
Both are priorities of the Virginia Business Higher Education Council, which closely aligned with McGuireWoods Consulting. The lobbying firm is an offshoot of the powerful Richmond law firm, whose former chairman, Richard Cullen, serves as Youngkin’s counselor.
Museum and safetyIn Richmond, the government proposes $10 million over two years for the state and city to create a “slavery and freedom heritage site” in Shockoe Bottom, which was the heart of the second largest domestic slave market in the United States before the Civil War.
Youngkin also proposed new spending on public safety, including $27 million over two years for cities and large counties with police departments through the so-called “599” program. Local police departments were left out of big boosts in compensation to state police, local sheriffs’ departments and other law officers in the current budget and Northam’s parting proposal.
He also proposes $40 million to expand cybersecurity initiatives, including $12 million from consolidating existing programs.
Youngkin proposes $100 million in federal money from the American Rescue Plan Act to provide grants to state and local law enforcement agencies for training and equipment, and $65 million in capital funding for a new State Police Training Academy.
Charter schoolsIn K-12 education, the governor has proposed $150 million in funding over two years to create what he calls “laboratory innovation charter schools,” as part of his push to use state money to expand privately run public school choices for parents. He also proposes more than $50 million to provide grants to local school divisions to hire school resource officers for security in schools.
But Youngkin did not seek more money to help local school divisions repair or replace crumbling schools, in addition to $500 million that Northam proposed.
“I see nothing for schools,” Del. David Reid, D-Loudoun, told Cummings during the committee meeting.
Knight, the chairman, stepped in to answer the question.
“School construction has never been a function of state government,” he said. “It’s always been a function of local government.”