Virginia lawmakers ended their 60-day regular session on Saturday without approving the state budget, scheduling a special session in the coming weeks to complete their work.
Budget negotiators remained at loggerheads over a set of planned tax cuts, namely a proposal to eliminate the state grocery tax and an increase in the state’s standard deduction on personal income tax.
With budget negotiations stalled, lawmakers took the opportunity to continue negotiations on other contentious bills, including legislation to bring a new football stadium to Virginia and a bill backed by the Governor Glenn Youngkin to inaugurate public schools operated by colleges and universities.
In a meeting with reporters after the two chambers adjourned at 2:55 p.m., Youngkin said he was “satisfied with the progress made in recent days on the budget” and hoped the two chambers would reach an agreement soon. .
“We still have work to do. We need to cut taxes. And we need to invest in really important areas like education, law enforcement and behavioral health,” Youngkin said.
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Neither Youngkin nor legislative leaders were willing to set a timetable for the completion of the remaining work. When negotiators agree on a budget, Youngkin is expected to call a special session to review the spending plan and any agreement reached on pending legislation.
House Appropriations Chairman Barry Knight, R-Virginia Beach, painted an optimistic picture of budget negotiations, describing an amicable meeting Friday night between House and Senate counterparts.
“I think without the distractions that we have, we can walk into a room and we can talk,” he said. “We’re very quickly going to agree to agree, or we’re going to agree to disagree,” Knight said.
“I believe right now we have a budget that, with some small adjustments, will pass the Senate and the House with bipartisan support.”
Senate Finance Chair Janet Howell, D-Fairfax, declined to answer questions about the status of budget negotiations Saturday afternoon. In a statement, Howell said Senate negotiators “will work to maintain funding from the original Senate budget to invest in the future of Virginia students; provide health resources, especially behavioral care, for everyone in the Commonwealth; and to secure the economic strength of every family”.
House Speaker Todd Gilbert, R-Shenandoah, said the special session would be limited to the budget and about two dozen outstanding items. He said Senate lawmakers made the decision to pause for a few days before continuing negotiations.
“We laid out the limits of any future special session to the budget, and then the remaining conference reports that are in limbo today,” he said. “There are still great things in there.”
The House budget Friday afternoon included nearly $5.5 billion in tax cuts and refunds, but the Senate continued to insist on postponing the centerpiece of the governor’s tax plan — doubling the tax bill. the standard deduction for income tax filers — until a joint subcommittee completes a comprehensive study of Virginia’s tax policy over the coming year. Doubling the standard deduction would reduce state revenue by $2 billion over two years.
The Senate agreed to the partial repeal of the 2.5% sales tax on groceries, but balked at eliminating the 1% that goes directly to local governments and approved a less generous tax exemption for income military retirement than the House.
He also endorsed lower tax refunds this year than the House and dismissed a 12-month gas tax cut as meaningless in the face of soaring prices at the pump.
Patrick Wilson contributed to this report.