Northam’s unveils budget plan with major new investments; Youngkin wants more tax cuts

RICHMOND, Va. (WRIC)–Governor Ralph Northam unveiled his final two-year budget plan to members of the General Assembly on Thursday. 

With Governor-elect Glenn Youngkin sitting by his side, Governor Northam laid out his list of priorities for the 2022-2024 biennium. The speech is one of the outgoing governor’s last chances to mark his legacy with the transition of power underway.

“I invited the incoming administration today because, once the campaigns are over, we all should work together to help Virginia succeed,” Northam said.

The budget proposal reveals Youngkin and Northam have many common goals, though they remain divided on how far to go on tax cuts. The General Assembly and Youngkin will have a chance to make changes to Northam’s framework in the 2022 legislative session. 

Despite months of fiscal uncertainty during the pandemic, Northam’s speech comes as the state is seeing its highest-ever budget surplus and record reserves. 

“Pandemic funding is one-time—revenues are ongoing. And those booming revenues show us that the things we’ve been doing these four years are working,” Northam said during his speech. “We are at a unique moment when we have the funding to catch up on long-delayed investments, while also putting money back into the pockets of the hardest working Virginians.”

Northam’s budget includes a slew of tax policy changes, such as cutting the state’s share of the grocery tax, a one-time tax rebate ($250 for individuals and $500 for married couples), an income tax cut for certain working families and the elimination of accelerated sales tax payments for retailers. 

“My plan focuses tax relief in the right way, helping keep a few more dollars in the pockets of working families,” Northam said.

Asked why he left out various proposals that Youngkin campaigned on, Northam said, “Not all tax cuts are created equal…we have to be careful as we move forward and we have to continue to invest in our priorities. So I have tried to present a balanced, structured budget.”

Speaking with reporters after the presentation, Youngkin said Northam’s plan lays the groundwork for much of his Day One Game Plan but it doesn’t go far enough to provide tax relief for Virginians.

“The governor’s budget proposal today reflects a continuation of basic philosophical agreement in a number of areas,” Youngkin said. “There are a number of areas where we disagree and I fundamentally believe that the recognition of the need for tax cuts is understated in his budget and fully embraced in our Day One Game Plan.”

Youngkin’s plan also calls for suspending the most recent gas tax increase for one year, doubling the standard deduction and providing a tax cut on a portion of veterans’ retirement pay.

“The money we call a surplus is a surplus because we have been overtaxing Virginians and we need to give more of it back,” Youngkin said.

Northam’s budget proposal makes a number of historic investments, many of which appear to have bipartisan support.

The plan includes a 10 percent pay raise over two years for educators and state employees. It also gives significant salary increases to state police, correction officers and state-funded sheriff’s department employees.

Northam’s plan provides $2.3 billion in direct aid for education in total. It includes extensive funding for school construction projects, increased support for at-risk students, and expanded early childhood education resources. 

In the area of higher education, Northam wants to put more funding into tuition assistance grants, Historically Black Colleges and Universities and his free community college program for students seeking jobs in high-need fields. 

Northam is backing greater investments in behavioral health as the system struggles with severe workforce shortages that, at times, have forced state facilities to halt new admissions. His plan includes $560 million total, including money for targeted salary increases, community services boards, crisis services, permanent supportive housing, new behavioral health standards in jails, more counselors at state prisons, community-based addiction treatment and more waiver slots for those with developmental disabilities.  

On gun violence, Northam is proposing $27 million to establish and staff the Virginia Center for Firearm Violence Intervention and Prevention. It would collect data to inform solutions, as well as provide support to localities and community-based organizations. 

The Governor’s outgoing budget also aims to put more money toward the development of future business sites, the expansion of affordable housing and the improvement of cybersecurity. It looks to narrow the digital divide as Northam expects to have universal broadband on its way to every community by 2024. 

Additionally, Northam is proposing funding to support outdoor recreation, clean up the Chesapeake Bay, expand tribal lands and update local sewer systems.