Gov. Youngkin says he refuses to support a budget that raises taxes

RICHMOND — Republican Gov. Glenn Youngkin said Thursday he will not support a budget that increases Virginians’ tax burden, panning the spending plan the Democratic-controlled General Assembly sent to his desk last week as a nonstarter.

Youngkin, who said he hoped to avoid vetoing the budget as a whole, called on Democratic leaders to “get around the table” with his administration to refashion a plan that axes a proposed new sales tax on digital goods and makes corresponding spending cuts to account for the revenue reduction. Youngkin suggested he could then submit compromise amendments to the budget for a General Assembly vote in April, when lawmakers reconvene next.

“So that’s the work we’ll do over the course of the next three weeks in order to come up with a budget that does not have tax increases in it and make sure that we’re funding our key priorities,” Youngkin said.

He made clear he would keep pushing to advance another priority lawmakers have so far rejected — a $2 billion development district with a new arena intended to lure the NBA’s Washington Wizards and the NHL’s Washington Capitals to Alexandria.

Youngkin’s remarks, which came during a campaignstyle appearance at a Richmond-area restaurant filled with supporters, were the most extended he’s given on the budget since lawmakers adjourned their annual session Saturday after passing the spending plan for the next two years and a bill that makes adjustments to the existing budget.

Democrats have defended their budget proposal, which passed with some Republican support, as focused on the needs of working families and Virginia’s public education system.

The plan “was on time, it was balanced, structured, consistent with Virginia traditions, invested more in K-12 and advanced the priorities of Virginians we’re working for,” Senate Majority Leader Scott Surovell said Saturday.

Youngkin argued the Democrats’ legislation would take Virginia “backward” after bills signed in the previous two years enacted a combined $5 billion in tax cuts, some through one-time rebates.

“They want to put their hand in your pocket and take your money that you deserve to keep and go do pet projects with it,” said Youngkin, who initially introduced the idea of the expanded sales tax in December, but did so coupled with a cut to the income tax rates, resulting in a budget plan he said would reduce taxes overall.

Lawmakers also included language in their budget legislation directing Virginia to rejoin the Regional Greenhouse Gas Initiative, a multistate carbon cap-and-trade program intended to reduce power plants’ carbon emissions. A regulatory panel removed the state from the program under Youngkin’s direction in a move that’s being challenged in court.

The governor argues the program has functioned as a tax on Virginians because utilities can at least partly recover the costs from ratepayers.

The combination of the cost of rejoining the initiative along with the proposed new tax on digital goods, which lawmakers expanded to include business-to-business transactions as well, would amount to a $2.6 billion levy over two years, said Youngkin, who made clear he wants both components removed from the bill.

Democratic Del. Luke Torian, who chairs the House Appropriations Committee and is the top budget negotiator for his chamber, said in an interview Thursday evening that Youngkin had requested a meeting with legislators and that work was underway to find a date.

Torian said he would otherwise reserve further comment on the governor’s speech or his own position on the negotiations until he’d had the chance to discuss the matter with Youngkin.

“I think it’s important that we simply have a conversation, and then we’ll go from there,” he said.

Democratic Sen. L. Louise Lucas, of Portsmouth, Torian’s Senate counterpart and a sharp critic of the governor, didn’t immediately weigh in on Youngkin’s budget remarks but took a jab at the proposed arena deal on social media and in emails on which she copied many reporters. She has been the Assembly’s leading opponent of the proposal, which Youngkin unveiled in December, and has effectively defeated standalone legislation underpinning it and blocked its inclusion in the budget legislation.

“The GlennDome is done,” she wrote in one of the emails, using her nickname for the project.

Youngkin, who noted he could insert arena language back into the budget bill, told reporters he hoped the Senate would give the proposal a more thorough vetting.

“The Senate has to engage,” he said.