Statement: Governor Youngkin’s Outgoing Budget Cuts Health Care, Fails to Provide Needed Resources in K-12 and More

Today, Ashley Kenneth, President and CEO of The Commonwealth Institute for Fiscal Analysis (TCI), released the following statement on Governor Glenn Youngkin’s outgoing budget:

“At a time when Virginia schools remain billions of dollars under JLARC-recommended levels, and hundreds of thousands of people are at risk of being kicked off or priced out of health coverage, Governor Youngkin’s outgoing budget fails to meet the moment. The governor proposes to cut health care services for over 1.8 million people in Virginia to help pay for tax giveaways to corporations, businesses, and ultra-wealthy investors. At the same time, the governor avoids a critical choice needed to move Virginia forward: raising new, sustainable revenues needed to invest in our communities. 

“We can — and must — dream big when it comes to investing in our communities, and that requires making bold choices. Virginia has the capacity and opportunity to make the state more affordable for families, particularly for low-income families struggling to make ends meet month after month. But when we look at the details of the governor’s budget, it becomes clear that certain choices and inaction in critical areas will continue to harm communities across the commonwealth. 

On Tax Policy

“One good note is that Governor Youngkin proposes making the refundable Earned Income Tax Credit (EITC) permanent. The refundable EITC is one of the most powerful tools to help families afford the basics and lift families above the poverty line. And in 2023, JLARC found that this policy decision made our tax code fairer. We look forward to working with legislators in 2026 who have championed this choice to secure and increase our progress to improve our tax code. 

“Unfortunately, Governor Youngkin has chosen to hand out over $400 million to corporations, businesses, and ultra-wealthy investors by mostly conforming to the tax provisions in HR1. That is money that could be better used to invest in Virginia families. 

“There are better, more targeted tax policy choices that can provide real economic relief to families, such as protecting and strengthening the EITC, and creating a state Child Tax Credit. 

On Health Care

“While details on Governor Youngkin’s Medicaid/CHIP decisions were sparse during his remarks, there was an indication of nearly $645 million in “savings.” Much of this “savings,” however, takes the form of cuts to health care services. This includes removing access to prenatal and postpartum care for certain low-income individuals and limiting adult dental health services. The budget proposal also risks reducing the number of providers who serve people with Medicaid coverage by freezing reimbursement rates. Over 1.8 million people rely on critical services and programs through Medicaid/CHIP, and the General Assembly will need to take action to ensure families can maintain access to services.

On Public Education

“Every student in every school should have the opportunity to learn and thrive. Unfortunately, the governor’s budget doesn’t appear to include any improvements for our K-12 schools. The proposed 2% salary increases will likely not even keep pace with inflation over the next two years, which means they aren’t real improvements. Increased special funds for education appear to be mostly used to reduce (supplant) general fund dollars rather than increase the quality of education. Legislators have the opportunity to take a dramatically different approach and make real progress for our students by removing barriers for students with disabilities, students from low-income families, and English language learners while supporting an inclusive process for creating a simpler, more transparent school funding formula.

On Child Care

“It appears that the governor’s budget doesn’t include much-needed new funding for child care, instead only reallocating some money from one program to another. Significant new resources are needed to make sure Virginia families have access to high-quality, affordable child care so that parents can go to work with confidence.

“The budget proposed by Governor Youngkin cuts critical health care services while maintaining the status quo otherwise, and that is not good enough for many families across the commonwealth. To dream big and make meaningful investments for Virginia families, we need to act boldly. And to do that, we need new revenues, which Governor Youngkin fails to include in his budget. Thankfully, this budget proposal is just the beginning of the conversation. We look forward to working with legislators and community members to have much-needed conversations around modernizing our tax code and ensuring the wealthy pay their fair share so that we can build a Virginia where everyone can thrive, no exceptions.”