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The Virginia General Assembly will vote Wednesday on a state budget that includes tax cuts

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RICHMOND — Virginia lawmakers return to the Capitol on Wednesday to vote on a state budget that includes billions in tax relief as well as more money for teachers and other public employees and record spending on education.

The budget deal, reached by House and Senate negotiators in the weeks after the General Assembly closed its regular session on March 15, also includes language providing for new penalties for possessing small amounts of marijuana.

Additionally, House Democrats will vote on new leadership, with Del. Don L. Scott Jr. (Portsmouth) — a relative newcomer — vying with at least two veteran lawmakers for the House Minority Leader job.

Virginia budget compromise gives Governor Glenn Youngkin partial victory

The state’s two-year spending plan is the star of the show, with Governor Glenn Youngkin (R) hoping to secure at least a modest victory in his campaign for sweeping tax cuts. Republicans who control the House of Delegates had passed a package of tax breaks that cost about $3 billion more than those passed by the Democratic-controlled Senate, leading to a stalemate that left lawmakers unable to agree on a budget in this year’s regular legislative session.

Last week, negotiators said they had finally reached a compromise deal that gives Youngkin some, but not all, of his wishes. The centerpiece: increasing the standard income tax deduction, which Youngkin had wanted to double. The legislature’s proposed budget would fall just short of that, dropping it from the current $4,500 for individuals and $9,000 for joint filers to $8,000 and $16,000, respectively.

But the increases would only occur if state revenue continues to rise by a certain amount and ends before the 2026 tax year.

Virginia General Assembly adjourns with unfinished business

The deal also includes reducing the 1.5% state tax on groceries, but not the additional 1% tax on groceries that localities can levy. Youngkin had wanted to eliminate the two.

Lawmakers did not agree to suspend the state gasoline tax, which Youngkin had proposed. But they accepted his proposal to reduce taxes on military pensions, which they would phase in over several years.

The budget proposed by the General Assembly also achieves a long-standing goal of Democrats: to make 15% of the earned income tax credit refundable for low-income working families.

“This is a historic budget in many ways,” said Assemblyman Mark D. Sickles (D-Fairfax), who was on the negotiating team. “Most of the things that people expect from states and want states to do, we’ve done more than ever,” he said, attributing an almost unprecedented increase in revenue.

A faster-than-expected recovery from the economic hurt of the pandemic, along with waves of federal relief payments related to the health emergency, have left the state with billions in excess revenue.

This allowed budget negotiators to combine tax cuts with big investments in a number of areas, including primary and secondary education, the state pension system, social services and welfare programs. water quality.

The budget compromise includes enough money for each K-12 campus to employ a school resource officer, said Sen. George L. Barker (D-Fairfax), who worked closely on the negotiations.

“Currently, 90% of high schools and middle schools have them, but less than 50% of elementary schools have them,” Barker said. School divisions would not be required to assign officers to each campus, but the state would bear the full cost for the duration of the two-year budget; after that, the cost would be split between local and state government according to a formula based on the locality’s ability to pay.

The budget also increases reimbursement rates for group and other homes that provide services to people with mental illness or intellectual or developmental disabilities, and for medical professionals who provide services to Medicaid recipients.

Once the General Assembly has adopted the budget, it can take several days for it to reach the governor’s office. At that time, he has seven days to propose amendments. The legislature will then return to the Capitol to consider any amendments.

House Appropriations Chairman Del. Barry D. Knight (R-Virginia Beach), said he encouraged Youngkin to accept the compromise bill with little or no tinkering, adding that he promised his Senate counterpart, Sen. Janet D. Howell (D-Fairfax), who chairs the finance committee — to stick firmly to their agreement.

“We acted in good faith with each other, and I promised to use what little influence I had [with Youngkin]”, Knight said in an interview last week. “It’s called the legislative budget. Its prerogative is to change it, and we think we have a very good instrument for the future, and we hope that he will recognize him for the good instrument that he is. And that message was conveyed to him in a very polite way, and he was very polite and said that he understood that.

In a written statement, Youngkin said he just started reviewing the budget on Tuesday morning. “Based on what I’ve seen, I think it’s a really good setting,” he said, adding that it’s “an opportunity for all of us to come together as Virginians.” .

“I encourage the General Assembly to cross the finish line on Wednesday,” he said. “Then we’ll take some time to review it and see if there are any changes that are needed.”

Youngkin Proposes New Pot Possession Offenses and CBD Retail Changes

The marijuana provision was an unusual part of the budget deal, intended to resolve a legislative impasse over one element of Virginia’s legalization effort.

Under a legalization plan passed last year, adults can possess up to an ounce of recreational marijuana, though the state has yet to establish a process for legal sale. of grass. Possessing between one ounce and one pound is currently subject to a civil fine, but having more than one pound is considered a felony.

The wording of the proposed budget would make it an offense to possess more than four ounces or up to one pound. Some lawmakers have argued that creating a new criminal category runs counter to the idea of ​​legalization.

The budget plan also includes language to close a loophole that allows sports betting operations to claim unintentionally low tax rates. Sickles, who sponsored a related bill that failed to make it out of the legislative session, said the change fixes a mistake that led to only five of the state’s 12 licensed sports betting providers have to pay state taxes.

Before the legislature meets at 10 a.m. Wednesday, House Democrats will caucus and are expected to vote on the new leadership. Scott, in just his second term, led an uprising last month in which Democrats ousted former House Speaker Eileen Filler-Corn (Fairfax) as Minority Leader, in part out of frustration that the party lost its majority in the chamber in last fall’s election.

Scott is said to be battling for the party’s lead against at least two rivals – Del. Charniele L. Herring (D-Alexandria), who is the caucus chair, and Del. Richard C. “Rip” Sullivan Jr. (D-Fairfax).

correction

A previous version of this article misidentified Del. Charniele L. Herring as being from Arlington. She comes from Alexandria. The article has been corrected.