Youngkin unveils Virginia budget proposals

The Youngkin Administration said Virginia has a multibillion dollar surplus and strong economic outlook for the next two years.

Virginia Gov. Glenn Youngkin presented today budget proposals to take advantage of a rosier economic outlook for the state that would increase funding for schools, hospitals, and offer tax relief. 

“Virginia is roaring,” Youngkin said in a presentation in Richmond to lawmakers. “Let’s keep going.” 

Youngkin touted the strength of Virginia’s economy and the positive economic outlook as reasons for offering tax relief and additional spending across the state. Virginia’s revenues are projected to have a $3.2 billion surplus over the course of fiscal years 2025 and 2026. 

Youngkin proposed what he called a “working class car tax credit” to help Virginians pay taxes on their cars. Youngkin proposed a $1.1 billion deposit in a car tax credit fund to give income tax rebates to taxpayers. Single taxpayers making less than $50,000 a year could get up to $150 in car tax relief, and a two-person household making up to $100,000 could get up to $300. The proposal would impact an estimated 1.9 million tax filers. 

Virginia Sen. Barbara Favola of Arlington County told The Dogwood she wants to hear from localities about the the impact of the car tax proposal before deciding whether to support it.

“I don’t know how complicated this is going to be to administer and I’d like to get feedback from localities,” she said.

Youngkin also proposed getting rid of taxes on tips for workers, a policy the incoming Trump Administration introduced on the presidential campaign trail earlier this year. The proposal would total an estimated $70 million in relief, according to the Youngkin Administration. Democrats have raised questions about the feasibility of the proposal given the potential challenge in defining what counts as tips. 

On education, Youngkin proposed additional investments in public school buildings, school security, and English language learning. Youngkin proposed a $50 million scholarship program to help low-income students attend private schools. 

Youngkin reiterated his desire to withhold funding from localities that refuse to cooperate with U.S. Immigration and Customs Enforcement’s (ICE), echoing anti-immigrant rhetoric about how “every state has become a border state.” 

Youngkin’s presentation kicked off in earnest a debate over the state’s finances that will play out over the course of the upcoming General Assembly session that begins Jan. 8.