We Have a Budget

On March 9, the General Assembly passed a budget that met Virginia’s needs. Among many other things, the budget made real investments in K-12 education, prioritized higher education, and rejoined the Regional Greenhouse Gas Initiative (RGGI).

One of the most critical investments was in K-12 education. The Joint Legislative Audit and Review Commission issued a report last year highlighting that Virginia underfunds K-12 education by $4 billion a year. If we are interested in preparing our children for the workforce and ensuring they can compete in this global economy, we have to be serious about fully funding our public schools. We made significant strides in the budget we adopted in March to begin addressing the deficiency in funding.

As we’ve discussed before, the Regional Greenhouse Gas Initiative (RGGI) has brought hundreds of millions of dollars to Virginia, much more than the amount paid into it by Virginia ratepayers, that was used for resiliency and flood control issues throughout Virginia and on energy efficiency measures.

The March 9 budget was something in which we could all take pride.

Shortly before the reconvened session in April, it became clear that the Governor had far different ideas about the budget. He sent down 233 amendments that effectively rewrote the budget. Included in those amendments was one to eliminate a new digital sales tax, which funded our investment in K-12 education, and others to eliminate the RGGI language. After much discussion, we agreed with the Governor to send the budget into a special session to convene the week of May 13.

I have been a member of the conference committee for four of the last five years. The state budget is a statement of the priorities of the Commonwealth, so the budget work effectively defines each session. We take the Governor’s budget submittal and amendments that were offered by both the House and Senate and try to reach an agreement that meets the long-term needs of Virginia. The budget we adopted on March 9 was the product of that work. My primary function in that work has been as chair of the Health and Human Resources Subcommittee of the Senate Finance and Appropriations Committee, but I have also been involved in public safety and capital outlay discussions.

Budgeting requires looking beyond the current fiscal year and the next election. The problem with long-term planning is that politicians each know that they must be reelected to make a difference. So that makes it very difficult when decisions must be made about revenue. Politicians don’t like to vote for tax increases. In 2021, I introduced a bill to raise the income tax for Virginians making over $150,000 a year by 0.15%. The bill would have generated about $140 million a year. I thought I had found a sweet spot, because I divided the revenue between K-12 education and law enforcement, both of which have been priorities in the General Assembly. Needless to say, I did not hit the sweet spot. The bill was carried over and referred to a subcommittee on tax policy that never met.

Because members of the House of Delegates run every two years, they are never more than a year away from a campaign. So, it is very difficult to vote to raise revenue. In the Senate, the longer terms and larger districts means we have a better chance of long-term planning. A governor, who cannot serve consecutive four-year terms, is the ultimate place for long-term planning to occur. However, the current governor has never stopped running for the next office and does not appear to care about identifying solutions to address the long-term needs of Virginians.

The budget we passed this week funds our priorities, primarily because revenue growth was higher than expected. But we could have – and should have – done more. But this should not have been a surprise given the political landscape in Richmond. The members of the conference committee opted not to fight with the Governor about RGGI or the new expansion of the sales tax.  The budget agreement does not include language rejoining RGGI or the sales tax expansion. However, the leadership has promised that the Tax Policy Subcommittee, of which I am a member, will meet. Part of the problem in the past was that the House refused to appoint members. I understand that will happen and we will meet.

With respect to RGGI, it is true that we already require membership in RGGI under state law. I think the Governor’s actions to pull us out of RGGI were illegal, and a lawsuit is pending. The language we inserted into the March 9 budget may very well have yielded additional litigation.

The expansion of the sales tax raised some legitimate questions about whether the sales tax is the appropriate means to raise revenue. This was an idea that the Governor developed and included in his introduced budget in December. While the budget we adopted this week did not include this expansion, the reality is that we still have a lot of work to do to address the funding shortfall identified by the JLARC report. The Tax Policy Subcommittee has a lot of work ahead of us in the next 12 to 24 months to address this long-term problem. I look forward to that work.

Thank you for allowing me to serve you. If I can answer any questions or assist you in any way, please do not hesitate to contact us at senatordeeds@senate.virginia.gov or (434) 296-5491.

 

Best,

 

 

 

 

 

ps. Serving in the legislature keeps you busy! You never know if you might meet some new four-legged friends at the Batesville Day Parade, get a tour from Bill Crutchfield of Crutchfield’s state-of-the-art distribution center, or catch up with friends at the Senior Statesmen Legislative Forum.

I look forward to seeing you around! If you know of a can’t miss event, please let me know!