(The Center Square) – Virginia Governor Ralph Northam presented a budget to lawmakers this week that included tax cuts and spending initiatives, including a pay rise for teachers and money to incentivize businesses , but House Republicans are already planning some revisions.
“While we have had our ups and downs, particularly in the early months of the pandemic, I can say with confidence that our economy today is the strongest we have seen in a very long time,” the governor said. in his presentation.
In response to a revenue surplus, Northam argued that the Commonwealth can afford to cut taxes while increasing funding for certain initiatives. One of his priorities is to end the state’s 1.5% grocery tax and provide income tax relief by returning 15% of the tax credit federal refundable income for low- and middle-income families. The governor’s plan would also offer tax refunds of $250 to individuals and $500 to married couples to return some of the excess money.
The budget plan would also end the accelerated sales tax, which requires retailers to prepay sales tax before collecting any revenue. The new policy would not require them to pay the tax until the company collects the money from the buyers.
All state employees would receive a pay rise under this plan: a 5% increase in the first year of the budget and another 5% increase in the second year. This includes teachers, whose salaries would then reach the national average. The plan also increases a pay rise for law enforcement officers and corrections officers.
The budget plan also includes $1 billion for the Virginia Retirement System, $2 billion for capital projects, $560 million for behavioral health issues, $164 million for salary increases for direct public hospitals and training centers and $263 million for community services.
Although the governor submits his budget before leaving office in mid-January, the state budget will need to be approved by new members of the General Assembly and Governor-elect Glenn Youngkin, a Republican. Republicans will also have control of the House of Delegates, but Democrats will retain control of the Senate.
House Republicans have already announced they will review Northam’s budget and add revisions, including additional tax relief.
“House Republicans will work with the new administration and our Senate colleagues to responsibly secure Virginia’s budgets,” Speaker-Elect Todd Gilbert, R-Shenandoah, said in a statement.
“The excess revenue that Virginia is currently experiencing is not guaranteed and the General Assembly must budget accordingly,” Gilbert said. “I am pleased that Governor Northam’s final budget proposal seeks to fund a number of initiatives that were proposed by Republicans just months ago, including tax relief and helping localities fix the schools in ruins. That being said, the final budget produced by the House of Delegates will contain tax relief for all Virginians, proposals to keep Virginians safe, ease the burden of higher costs due to federal government inaction, and additional priorities. championed by Republicans in the 2021 campaigns.”
The governor has unveiled parts of his budget plan individually over the past two weeks.