The 2024 Regular Session of the Virginia General Assembly is underway. We started last week with committee assignments, a speech from the Governor, the annual convening of the Agribusiness Council, and the first committee meetings.

As you know from previous columns, Virginia budgets on a biennial, or two-year, cycle. The next biennium runs July 1, 2024 through June 30, 2026. We will adopt a new two-year budget for the cycle as well as make some adjustments to the current fiscal year. Our starting point for discussions is the Governor’s proposal introduced in December. A previous column dealt with my initial thoughts on that proposal.

This year’s session is long under Virginia’s rules. This is a 60 day session, which includes the weekend, so this will fly by. We essentially have eight and a half weeks to deal with thousands of bills and finalize our two-year budget. In the Senate, we have a 21 bill limit per member. The House of Delegates does not have any limitations. So this year, a majority of work for the Senate will happen after crossover. We will spend the first five weeks dealing with bills originating in the Senate until crossover, at which point bills originating in the House of Delegates must come to the Senate for consideration. We will spend the remainder of the session considering bills originating in the other chamber.

Since both chambers are controlled by Democrats, there will be a real temptation, in my view, to challenge the Governor as much as possible and to send bills to him that he will be tempted to veto. In fact, he will probably veto a lot of legislation. Our goal should be to find policy issues we can achieve to move Virginia forward. With a divided government, we need to work on items with bipartisan support. However, that does not mean we abandon our principles or lower our sights. It does mean we have to be realistic and focus on areas where we can work together to lift all boats. I think it will be a busy session.

A couple of things are clear. We need to work together to get a budget done on time. As written before, the Governor’s plan has a number of unrealistic proposals, among them plans to cut about $2 billion in taxes. He proposes raising the sales tax by .9 cents, to the tune of about $1 billion. And in my view, while he raises some issues that need to be discussed, it is simply not feasible to cut taxes in this environment. The federal COVID dollars run out this year, and we have major obligations that have to be met, including over $4 billion in K-12 that was identified in the JLARC report. Simply said, we are underfunding education and have been doing it for years. Localities have been filling in the gaps to a large extent, but that means that while state taxes have remained relatively low, local taxes have increased particularly in the area of real estate taxes. I do not think we can get this fixed in one session, but we need to set short and long-term goals if we are to address that funding shortfall..

The Governor has also raised the issue of the car tax. The car tax is a complicated issue, because it is a constitutionally mandated tax. Eliminating the car tax would require amending the Constitution, which is a multi-year endeavor. Then we would need to develop an alternative to replace it. The personal property tax is the second largest source of revenue for local governments in the Commonwealth of Virginia. All of this is much easier said than done.

Another issue garnering significant attention is energy policy. In 2020 we passed the Clean Economy Act. To date we are simply not generating enough renewable energy to meet our goals for carbon reduction. This is especially true given the increasing demand of data centers situated throughout Virginia that require more energy than most other industries.

A popular idea is to ban data centers or to keep them out of certain areas. However, this is not realistic. More than 70% of internet traffic in this country goes through Loudoun County, Virginia. So much internet traffic is centered in Virginia, this is where the data centers will be. From my perspective, we can’t say no to data centers, but we can impose some rules and figure out how to take advantage of the tax revenues generated from data centers, the jobs they create, and the investments that flow from that industry. We can’t do that unless we figure out a way to generate more alternative sources of energy. In my view, that is going to require us to grow our solar and wind-based energy. We have a lot of work to do.

Last session I was co-chair of the Judiciary Committee, which has now been restored to the name it held for hundreds of years, the Courts of Justice Committee. I also chaired the Capital Outlay Subcommittee of the Senate Finance and Appropriations Committee. This year I will chair the Committee for Commerce and Labor, and the SFAC Health and Human Resources Subcommittee. While both of those jobs are somewhat lateral moves from important work I was doing (and by the way I will remain a member of both of those committees) they will increase my workload significantly. The Commerce and Labor Committee will hold its regular meetings on Monday afternoon. The HHR Subcommittee will meet on Thursday mornings. Both will require significant preparation and homework.

Thank you again for allowing me to serve in the Senate. We are still settling into the new office, room 612, in the General Assembly Building. We also have transitioned to our new email address, senatordeeds@senate.virginia.gov, and our new phone number, 804-698-7511. While the building is beautiful and more accommodating to the public, we are still working out a lot of the kinks. If you come to Richmond for a visit, I hope you will stop by my office.

Best,

Creigh Deeds