After more than two months of negotiation, Virginia lawmakers are nearing a deal on the state’s biennial budget plan and intend to hold a vote on compromise legislation on June 1.
The House of Delegates, which has narrow Republican control, and the Senate, which has narrow Democratic control, passed their own versions of the state budget in early March but missed a mid-March deadline to pass compromise legislation. Spokespersons for the House Republicans and the Senate Democrats have both confirmed with The Center Square they are nearing a deal that will be ready on June 1.
“We’re Still hashing out minor details, but confident we’ll be prepared to vote on Wednesday, June 1,” Garren Shipley, a spokesperson for the House Republicans, told The Center Square.
Gov. Glenn Youngkin urged lawmakers to include his legislative priorities in the final plan, which include tax relief.
“Virginians are ready for the General Assembly to come together on the budget and deliver much-needed tax relief and investments in education, law enforcement, and behavioral health for Virginians,” Youngkin said in a statement his office provided to The Center Square. “I look forward to reviewing their budget proposal.”
One of the major points of contention has been taxes and spending. The Senate version gave the state about $3 billion more in available spending and the House version sought to return some of that money to the taxpayers.
The House version would double the standard deduction from $4,500 to $9,000 for single filers and from $9,000 to $18,000 for married filers, which would create broad middle-class tax cuts. The Senate version would not change the standard deduction, which is set to decrease in 2026, and raise taxes on some middle-class Virginians.
Both chambers supported reducing the commonwealth’s grocery tax, but House lawmakers wanted to fully eliminate the tax, and Senate lawmakers sought to only cut it. Both versions would get rid of the state’s share of grocery taxes, which is a 1.5% tax, but keep the 1% local option. The House version would get rid of the local option but divert funding to local governments to offset those financial losses.
“Given that the state treasury is bursting at the seams with cash flow, it would be tragic if the final agreement does not include significant tax reform, especially a major increase in the state standard deduction,” Steve Haner, a senior fellow for state and local tax policy at the free-market Thomas Jefferson Institute, told The Center Square.
“And the increase should apply to the tax year we are already in,” Haner said. “The other idea on the table with the broadest benefit is removing the sales tax on groceries, and if they fail to do that, I predict a nasty reaction from the voters.”
House and Senate lawmakers both sought to increase teacher pay, but not to the same extent. The House version would give teachers a 4% pay raise and a 1% bonus, and the Senate version would give them a 5% pay raise and a $1,000 bonus. The Senate plan includes a larger increase in education spending, and the House plan would divert some education funding to school choice programs.
Lawmakers are also debating the specifics of a lab school program, which would allow higher education institutions to run K-12 lab schools. The Senate version would allow non-profit and public lab schools, but the House version would also include privately run lab schools. The House version would divert funding from the traditional public schools to the lab schools, based on the number of children who switch to those schools, but the Senate version would ensure the current public schools do not lose money, even if they lose students.
Specifics about the compromise legislation have yet to be released.
Tyler Arnold reports on Virginia and West Virginia for The Center Square. He previously worked for the Cause of Action Institute and has been published in Business Insider, USA TODAY College, National Review Online and the Washington Free Beacon.
