The Virginia General Assembly is about to vote on a compromise deal with Youngkin

RICHMOND, Va. (AP) — Public schools would get more funding, teachers and other government workers would see a pay increase and Virginia’s tax policy would remain as it is under a compromise budget. Democratic lawmakers were expected to send Republican Governor Glenn Youngkin on Monday.

Youngkin and leaders of the General Assembly negotiated an end last week to their prolonged standoff over the state’s next two-year spending plan, agreeing to use higher-than-expected revenues to fund key priorities without implementing them a hotly debated new sales tax on digital goods such as streaming services and computer software.

The plan was made public Saturday and was scheduled to be voted on Monday in a special session starting at noon.

“I am confident that we will pass this budget today,” House Speaker Don Scott said in a telephone interview Monday morning.

Youngkin’s office has expressed support for the deal. His press secretary, Christian Martinez, said in a statement last week that the governor “looks forward to completing the work to deliver on our collective priorities for all Virginians.”

Documents prepared by the House and Senate finance committees say the latest version of the budget for the 2024-2026 biennium retains virtually the same spending priorities as lawmakers’ version. adopted in March on the last day of their regular session, minus a few technical adjustments.

The plans include what lawmakers have said would be record funding for K-12 public schools and a 3% annual raise for teachers and state employees.

It was possible to maintain these and other allocations while eliminating more than $1 billion in projected revenue from the proposed new sales tax, thanks in large part to the fact that revenue collections for fiscal year 2024 are well ahead of forecast, according to a presentation by the House Appropriations. the committee said.

Year-end revenue collections could end up exceeding what was forecast by more than $1.2 billion, and budget lawmakers would expect revenues to balance Monday if revenues rise by less than half – $525 million, according to the presentation.

Other technical changes have helped close the gap, including updates to account for legislation that Youngkin amended or vetoed, such as wiping out funding set aside for a now-nixed increase at the minimum wage.

“These changes represent an ‘easy approach’ to balancing the budget without adjustments to tax policy,” the House presentation said.

The latest plan also calls for taking on debt instead of using $500 million in cash to finance capital projects such as construction or renovation initiatives.

Whether to include the new proposed tax on digital goods has been the biggest sticking point between lawmakers and the governor, who have been at odds over the budget for months.

Jongkin first proposed the idea in December, but he combined it with other tax policy changes that Democrats left out during the legislative process, including an income tax cut, for an across-the-board tax cut.

The governor then launched a public tour he criticized Democrats’ version of the spending plan as “backward” and said he would not sign legislation that raised taxes.

Democratic leaders launched a dueling tour of themselves. The two sides finally agreed in April to lower the temperature Extend the timeline for conversations instead of sending Youngkin a budget, he would probably veto it. Without an agreement at the start of the new fiscal year on July 1, they would have faced a government shutdown.

The House budget presentation It is suggested that lawmakers may want to revisit the issue of “modernizing the tax system” next year.

The latest version also lacks language forcing the state to rejoin a regional carbon cap-and-trade plan that Youngkin opposes and got Virginia out in a movement that is challenged in court. A coalition of environmentalists criticized what they called “capitulation” by Assembly leaders to “reckless and bad public policy.”

The compromise agreement also does not resolve one of the most heavily lobbied issues of this year: whether legalization should take place Skill games, the slot machine-like slot machines that proliferated in businesses across the state before a ban took effect. Youngkin faces a Friday deadline to decide how to respond to a bill that would greenlight and tax the machines after the General Assembly rejected many of the proposals. are proposed changes to the measure in April.

Lawmakers were also expected to take up the so-called caboose budget on Monday, which would make minor changes to the existing budget that runs through June.