Lawmakers approve budget without Youngkin’s costly arena project or tax cut for the rich

Virginia’s General Assembly wrapped up its 60-day legislative session on Saturday after approving a new, two-year state budget—a document Republican Gov. Glenn Youngkin has made clear he’s not happy with, calling it “backward” and saying it needs “a lot of work” before he’s willing to sign it. 

This is the third legislative session since Youngkin took office, however, it’s the first time he has had to work with a Democratic-controlled Senate and House of Delegates. As a result, the budget as it currently stands excludes many of the priorities Youngkin included in a proposal he submitted in December. 

Late last year, Youngkin announced he was pushing for a cut to the income tax rate, something he claimed would draw more people, and therefore jobs, to the commonwealth. He proposed increasing the sales tax rate and adding a tax on digital services to offset that revenue reduction.

Democratic lawmakers and liberal advocacy groups criticized these plans, arguing they were a handout to the wealthy. According to data from the Institute on Taxation and Economic Policy (ITEP), families in the bottom 20% of incomes, or those making below $30,000 annually, would see an average tax increase of $44 under Youngkin’s proposed tax plan. Meanwhile, those in the top 1%, or those making over $763,000 annually, would see an average tax cut of over $9,640 per year. 

Instead, the legislature has proposed using tax revenues to boost spending on public education, including a push to raise pay for Virginia teachers, whose pay hasn’t topped the national average in over 50 years. Under the budget approved Saturday, teachers and state employees will get 3% raises in each of the two years covered by the budget.

Lawmakers did however include Youngkin’s idea of expanding the sales tax to apply to digital services, such as streaming services, in the budget. 

Also notably absent from the budget is language that would have helped Youngkin achieve one of his top priorities: a $2 billion development district that would include a new arena meant to attract the NHL’s Washington Capitals and the NBA’s Washington Wizards to Alexandria. 

Democratic Sen. L. Louise Lucas (D-Portsmouth), who chairs her chamber’s Finance and Appropriations Committee, used her position to keep the deal out of the budget, saying that she opposed the project mainly because of its reliance on bonds backed by the city and state governments. 

Lucas also told reporters last week that she does not believe “we are to put the full faith and credit of the commonwealth behind a project that’s going to further enrich billionaires.”

Youngkin could still revive the idea by calling a special session to start over with a new bill.

Elsewhere, the governor had until Friday night to act upon 84 bills that were sent to him on a shorter-than-usual timeline. Youngkin signed 64 of the bills, vetoed eight of them, and recommended changes to a dozen.

Perhaps most surprising was his approval of a measure seeking to enshrine the legality of same-sex marriage in the state. He did, however, block several bills having to do with gun safety and reproductive rights. 

Lawmakers have sent Youngkin over 1,000 pieces of legislation for his review before they reconvene on April 17 to consider the governor’s initial amendments and vetoes. 

Bills surrounding the establishment of a recreational marijuana market, the raising of the state hourly minimum wage, and the legalization of skill games are among some of the more noteworthy pieces of legislation lawmakers, and Virginians, are waiting for a decision from Youngkin on. 

The governor can sign or veto the bills, let them become law without his signature, or seek amendments.