House Budget Proposal Highlights Need for Sustainable Revenue To Support Long-Term Investments

Today, Ashley Kenneth, President and CEO of The Commonwealth Institute for Fiscal Analysis (TCI), released the following statement on the budget proposal presented by the House Appropriations Committee:

“Today, leaders in the House of Delegates released a set of proposed budget amendments for budget conferees to consider as negotiations continue. 

“A number of these proposals align with investments in the Senate proposal released in February, such as 3% pay raises for state and state-supported employees, as well as teachers. However, while the House recognizes the need to invest in our communities, it does so without a new revenue source, leaving little room to invest in the future and adapt to new challenges. The Senate proposal remains strong in ensuring data centers pay their fair share of taxes by eliminating their sales and use tax exemption, which cost Virginia nearly $2 billion last budget year in foregone revenue. Instead of keeping its proposal to tie the data center tax exemption to clean energy standards, the House’s new plan proposes no action this year, while a new commission would study the impacts of data centers. 

“The House proposal shows that without a new source of revenue, it is hard to craft a budget that both invests in our communities and provides lawmakers with the flexibility to respond to future needs. The new House budget ends its two-year period with a $582 million balance. According to the 6-year plan published alongside the proposal, lawmakers would need to use leftover funds to balance the next 2-year budget. Projections show that even with significant leftover funds from this budget, just maintaining current investments in the next budget will exceed how much money they have in total. This means that, without new revenues, lawmakers will not be able to make new, big investments in future budgets. 

“Making life more affordable for Virginia families requires new, sustainable revenues. By making millionaires and big corporations pay their fair share, we can invest in programs that create opportunities for communities to thrive. We appreciate the steps taken in the recent proposals to reach these goals, and hope more can be done as a final budget compromise is negotiated.”