A generational opportunity
Virginia’s budget surplus makes this a pivotal moment for the commonwealth
Like two trains on the same track screaming toward one another, Republicans and Democrats are headed for a collision when they return to the General Assembly this week.
The two-year budget, left unfinished when the legislature adjourned in March, must be completed, but neither side seems willing to concede an inch to the other. Virginians should hope they can find common ground and deliver, since the commonwealth has a singular opportunity to achieve great things.
Virginia ended the 2021 fiscal year with a $2.6 billion budget surplus. Reports to the two legislative committees tasked with budgeting predict additional $3.5 billion surpluses each of the next two years.
That means while Virginia might not be able to have it all, this rare and almost unbelievable windfall will allow officials to do a lot — so long as lawmakers resolve this impasse.
The commonwealth has endured budget showdowns before; in 2014, a battle over Medicaid expansion was resolved in June, only days before the start of a new fiscal year on July 1 would have shut down state government.
Then, like now, control in Richmond was divided between officials of different parties. And then, like now, those philosophical differences manifested themselves in arguments about policy and spending priorities.
That can be good and healthy for Virginia — the commonwealth should have serious debates about consequential decisions — but there is a great deal of acrimony infecting those discussions this year. Additionally, the determination and
resolve expressed by both sides suggest it will be tricky to find common ground.
The sticking point is how best to use the surplus. There is broad agreement that Virginia should divide the sum between tax relief and spending, but there is ample disagreement about where to balance the two.
On the campaign trail, Republican
Gov. Glenn Youngkin promised to deliver the largest tax cut in Virginia history. He outlined plans to suspend the gas tax, eliminate the grocery tax, double the standard deduction and send rebates to every
Virginia taxpayer.
Those aspirations received a boost from an unlikely figure: Democratic Gov. Ralph Northam, who included several of Youngkin’s campaign promises — ending the state’s share of the grocery tax, distributing tax rebates — in the budget he proposed during his final weeks in office. (Don’t get us started about Virginia’s oddball tradition of asking an outgoing governor to work up a two-year spending plan before handing the keys to the Governor’s Mansion off to his successor.)
By including those initiatives in his plan,
Northam gave Youngkin a helping hand earlier in his term and paved the way for bipartisan cooperation on the budget. It showed a Democratic commitment to returning some of the budget surplus to taxpayers through reductions and rebates, which were sure to find favor on the other side of the aisle.
But Democrats, who enjoy legislative leverage by way of a slim majority in the Virginia Senate, have argued that while the budget should include tax relief, the General Assembly cannot afford to squander this generational opportunity to make needed one-time investments across the commonwealth.
After all, this region has an estimated $40 billion in flooding resilience projects needed to protect against rising seas. The Virginia Department of Education estimates that repairing or replacing the commonwealth’s aging stock of public schools will cost at least $25 billion. Numerous other areas — mental health, public safety, higher education, unemployment — would greatly benefit from investment instead of continued neglect.
These aren’t initiatives which would require ongoing spending year after year, but unchecked items on the state’s “To Do” list that need one-time money. And even the surplus isn’t sufficient to pay for all the resilience needs of coastal communities, an apt illustration of how much there is to do in Virginia.
There is no question that Virginians should see some of their money returned to them by Richmond. But this is a pivotal moment, one that can change the commonwealth’s trajectory, if lawmakers make smart choices this week.