Majority Leader Scott Surovell’s Virginia Budget Update: “Right now, there are three different budgets floating around Capitol Square”

This week, when someone asks a question about the budget, the answer is likely to start with, “Which one?” Right now, there are three different budgets floating around Capitol Square: the Governor’s, the House of Delegates’, and the State Senate’s.

The Governor’s budget, which he announced in December, forms the basis for the budget. Then, each chamber of the General Assembly propose amendments to this budget, creating their own versions of the budget.

Here’s a helpful chart showing the somewhat complicated budget process. We are between steps 6 and 7!

Though discussions are continuing, I am proud of this year’s budget and the historic investments we have made. Here are some of the important differences between the Senate budget and the Governor’s budget:

Governor’s Tax Cuts vs Senate’s Needed Investments

The Governor’s introduced budget included nearly $1 billion in tax cuts, most of which are for the wealthiest Virginians. The Senate budget does not accept these
changes and instead redirects that $1 billion to meeting needs in education, mental health, and other important priorities.

The Senate budget’s highest priority is K-12 education. Key components of the Senate budget include:

• Increase Teacher Pay – $525.2 million for the state portion of a 3% pay increase per year for teachers (localities asked provide at least 1.5% of pay increase). This will put Virginia as close as it has been in a long time to being at the national average for teacher pay.

• Remove Support Staff Cap – The Senate budget adds $400 million to remove the support position cap. This cap was added in 2010 as a budget measure. It placed a cap on the number of support staff positions that the state would support through its Standards of Quality funding. This recommendation is a key part of the recent JLARC recommendations on Virginia’s education funding formula.
• Support In-Need Schools – Increases the At-Risk Add On funding by $200.6 million. This money is distributed to school districts with high concentrations of students on free and reduced lunch. It can be used for anything a school deems necessary. This funding is particularly important for Fairfax County Public Schools.
• Increased Money For Fairfax Public Schools – The Senate budget provides the most money for Fairfax Public Schools out of all proposed budget, increasing the base budget by over $226 million over two years. The Senate budget also includes over $185 million more over two years than what the Governor proposed in his budget.

Health and Human Resources

• Funding for Medicaid and Children’s Health Insurance – Both the Governor’s budget and the Senate budget include significant increases in Medicaid funding. In all, these increases total $1.2 billion. The budget also includes an increase of $62.7 million to fund the children’s health insurance programs.

• In addition, the Senate budget includes
  • A 3% increase in Medicaid dental rates, totaling $11.3 million
  • A 2.1% increase in developmental disability waiver rates, totaling $37.4 million
  • Increases in rates for Medicaid providers.

Community Behavioral Health

• Mental Health Services – One area of bipartisan agreement is mental health. Governor Youngkin’s budget made significant increases in crisis care, and the Senate budget maintains those increases.

• New Workforce Agency – The Governor’s budget provides one-time funding to establish new Department of Workforce Development and Advancement. The Senate budget also includes this funding. Both budgets also include new grant programs that include apprenticeship grants (a maximum of $2,000 apiece).

• Increase of State Employee Salaries – The Governor’s budget gives full-time state and state-supported employees two bonuses equal to 1% of an employee’s salary effective Dec. 1 of 2024 and 2025. The Senate budget provides funding for a 2.5% salary increase each fiscal year.

There are still major issues to be resolved. Discussions about funding for Metro is ongoing and will occupy much of our time between now and adjournment. If you are interested in going in depth in the budget amendments, here is a link to all the budget amendments made this year.

Raising the minimum wage has been a long-time commitment for me. This year, the bill to raise the minimum wage was the first bill filed in each chamber (HB1 and SB1). Both bills have passed their respective chambers on party line votes and will be sent to the Governor.

In 2020, the General Assembly passed legislation raising Virginia’s minimum wage in increments. It now stands at $12 per hour. But since then, inflation has eroded that buying power.

Nine out of every 10 workers who will benefit are over age 20. Most are workers of color, and 6 out of every 10 are women. Annual income for year-round workers who
would be affected by the increase would rise by an average of about $1,300 in 2022 dollars. That’s money that working families with low incomes can use to pay the rent, make needed car repairs, and buy back-to-school supplies.

The Commonwealth Institute has great information regarding the impacts of raising the minimum wage in their “The State of Working Virginia” Report.

The Governor, however, has indicated that he will not sign the bills if they come to his desk. “The market is working,” he said.

Senate and House Democrats disagree. We will continue to fight for working families.