Budget Matters: How it Works and How It Can Work For Virginia Families
The state budget reflects what and who we value as a commonwealth because funding decisions impact the lives of everyone in Virginia through K-12 education, higher education, health care, safety net programs, and more. Creating broadly shared opportunity requires investing our resources in these building blocks of thriving communities — that’s why Virginia’s two-year budget and changes to that budget are among the most important decisions made each year during the legislative session.
There are two sides to these important budget decisions: how we raise money and how we spend it.
When we all pitch in our fair share of taxes, we can invest in programs and services that help everyone thrive, no exceptions. But special interests and those at the top have rigged the rules to get out of paying what they owe, and Virginia’s tax code is upside-down, where those with less pay a greater share of their incomes in taxes. A more fair tax code can lift up families with low incomes and raise the shared resources we need to achieve our shared goals.
Lawmakers have recently made some progress to flip Virginia’s upside-down tax code.
In particular, the 2022 choice to give qualifying families greater access to their Earned Income Tax Credit (EITC) will help families with low incomes better make ends meet. And each legislative session provides lawmakers with more opportunities to advance tax choices that work for all of us.
No budget “surplus” with unmet needs
While recent reports and comments from elected officials have characterized Virginia’s current strong financial position as having a “budget surplus,” we know that our state can’t have a budget surplus when Virginia families have so many unmet needs.
When it comes to making spending decisions, it’s important that lawmakers focus on what matters most for families and communities: targeted help for families struggling with increasing costs, investing in our schools, expanding health care access, and making sure profitable corporations and wealthy individuals pay their fair share.
Instead of more tax cuts each year that primarily benefit the wealthy and profitable corporations and harm our ability to pay for critical services in the short and long term, lawmakers could:
- Pay the state’s fair share of the costs for custodians, front-office staff, and other support staff in schools: $271 million
- Increase teacher pay to the national average: $329 million
- Meet all unmet financial need for in-state undergraduate students: $400 million
- Pilot long-term affordable housing voucher program for 4,500 households: $73 million
- Establish a Commonwealth Kids Credit to help over 1 million children in Virginia: $564 million
- Improve the state EITC to 20% refundability: $36.5 million
- Create a health coverage option to Cover All Kids from families with low incomes: $19.3 million over the first biennium
- Improve access to behavioral health services through increasing provider reimbursement rates by 10%: $17.4 million
Understanding Virginia’s budget and tax policies and process isn’t just for lawmakers. By learning more and sharing with our neighbors, each of us can add our voice and make sure that the needs of our families and communities are at the center of these critical conversations.