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February 18, 2024

Statement: Money Committees Reject Worst of Governor’s Tax Package, Make Stronger Investments in Education, Health, and More

Ashley C. Kenneth, President and CEO of The Commonwealth Institute for Fiscal Analysis (TCI), released the following statement regarding the proposed budgets from the House Appropriations and Senate Finance and Appropriations committees:

“Today, Virginia’s legislative money committees rejected the worst of Governor Youngkin’s tax package, which would have lined the pockets of millionaires while raising taxes on people with low incomes. By rejecting these costly, untargeted tax policies, budget leaders had additional revenues to make key investments in their proposed budgets. TCI is proud to have played a leading role in defeating the most harmful tax proposals while maintaining the expansion of the sales tax base to keep up with the economy we live in today. 

“Compared to the governor’s proposal, lawmakers made more meaningful budget choices in the areas of public education, health care, housing, compensation, and more. 

“Both the House and Senate make significant investments in public education, including raising teacher and staff compensation, improving funding for English language learners, implementing JLARC’s recommendations for additional funding for high-poverty school divisions, and investing in community schools to help make sure students’ needs are holistically met so they can focus on learning. Compared to the governor’s introduced budget, the House invests $940 million more for Virginia’s school divisions, including $911 more per student on average over each of the next two years for students in school divisions with the highest share of poverty, and $820 more per student on average for students in school divisions with the highest share of Black students. The Senate provides $1.7 billion in additional General Fund support for Direct Aid to Public Education over the biennium compared to the governor’s proposed budget (school division-level data is not yet available for the Senate).

“Virginia’s college and university students also see additional support in the House and Senate budget proposals compared to the governor’s introduced budget, including additional support for need-based financial aid to help students from lower-income families attend colleges without taking on crushing debt.

“Senate and House budgets also make investments in the health of Virginia families by providing funding to meet state costs for Medicaid and Virginia’s program for children (FAMIS) while improving access to coverage and services. The proposals also include investments for our public health safety net, funding to support Community Health Workers in Virginia, and help individuals obtaining developmental disability waivers to more easily access services by increasing provider reimbursement rates. A state-level paid family and medical leave program was funded in the Senate budget, while the policy is studied further in the House. Notably, the Senate included funding to create the Cover All Kids program in fiscal year 2026 to help eliminate barriers to health coverage for 13,000 children. 

“Both House and Senate budgets keep Virginia on track to raise the minimum wage to $15 an hour and lift up working families. Additionally, unlike the governor’s proposed one-time bonuses and small pay raises that fall far below the rate of inflation, both chambers also propose significantly higher salary increases for state employees. 

“These investments are possible because the money committees rejected harmful tax policies that would have primarily benefited the wealthy. In the future, lawmakers should build on this critical choice and make sure the ultra-wealthy pay their fair share. By raising new, sustainable revenues through fair share tax choices, we can continue to make transformative investments that create opportunities for all families to thrive as seen in today’s budget proposals. A Fair Share Tax, which would create a new 10% bracket for annual taxable incomes above $1 million, would have generated over $3 billion in the upcoming budget. We will continue to engage with lawmakers about the need to clean up our tax code so that a teacher and a corporate CEO are not in the same top tax bracket in Virginia and so that we can invest in all of us.”

On Wednesday, The Commonwealth Institute will release our much-anticipated budget side-by-side, an easy to understand comparison of the 3 budget proposals. Additionally, on Wednesday at 11am, we will host a budget briefing for advocates and press to take a deeper dive into the budget and answer questions people have.

The Commonwealth Institute

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