At Westwood Fountain - in Westwood Pharmacy - Gov. Glenn Youngkin responds to a questions about balancing tax cuts with education spending needs.
Partisanship was intense in the General Assembly this year, but two budget negotiators – one Democrat, one Republican – say they’re optimistic a compromise to bridge a $1 billion gap between the House of Delegates and state Senate will be reached soon.
That compromise will likely include Gov. Glenn Youngkin’s proposal to boost the standard deduction to $9,000 for single filers and $18,000 on joint returns, Senate Minority Leader Tommy Norment, R-James City, told the Greater Williamsburg Chamber of Commerce Wednesday.
That will have the effect of increasing the number of Virginians who can benefit from the low-income tax credit, he added. Expanding that benefit is a goal of Democratic legislators.
People are also reading…
But Youngkin’s proposal to cut the corporate income rate from 6% to 5% probably won’t make it into the conference committee compromise, while prospects seem questionable for the governor’s proposed cut in the top rate for individuals’ income taxes, Norment said.
Norment sponsored a bill for the governor’s standard deduction increase and individual income tax rate cut during the session, but it didn't make it out of the Senate Finance Committee.
“You rarely get everything you want … there will be a balance,” he said.
State Sen. Mamie Locke, D-Hampton, who like Norment is a budget negotiator, said the conference committee is set to meet again next week.
She said she’s hopeful that a compromise is in the works, and that it will include top goals of Democratic legislators for increases in teacher pay and school construction.
Del. Amanda Batten, R-James City, said she believes most legislators support teacher pay increases.
She said that while failing to act on revisions to the state’s current two-year budget would not risk shutting down the government, the city and town councils and county boards of supervisors now putting together their own budgets need to know what funds the state will put forward for schools, police and other public services.
“We could just let the governor use that money when he writes his own budget [for the next two years, beginning July 1 2024] later this year, but that’s not what we were elected for,” she said.
“The budget just has to get done,” said state Sen. Monty Mason, D-Williamsburg.
House Appropriations Chairman Barry Knight, R-Virginia Beach, confirmed that he expects to meet on Tuesday with Senate Finance Co-Chairs Janet Howell and George Barker, both Fairfax County Democrats, to talk about tax cuts and revenues available for spending before the other negotiators get involved.
“We probably need to meet the three of us to get the resources right,” Knight said in an interview on Wednesday. “If you don’t get the resources right, what does it matter?”
The talks are likely to begin where they ended on Feb. 24, when Knight ended negotiations after the Senate budget leaders balked at a package of proposed tax cuts that their conferees would not accept.
The package, reportedly totaling about $900 million, did not include Youngkin’s proposed reduction in the corporate tax rate, but did include a one-time tax rebate that was not part of the governor’s initial $1 billion in tax cuts in his proposed budget, as the Richmond Times-Dispatch first reported on March 3. The revised deal also would have lifted the age limit on a new exemption of military retirement income that was part of the $4 billion tax cut package that the assembly approved last year.
Overall, Norment said partisanship during the 2023 session reached what he called unparalleled heights.
Locke said it reached the point where House Republicans killed her bill expanding the definition of derelict buildings, simply because of her position as chair of the Senate Democratic caucus.
“Bills should get a full fair hearing and not be killed simply because they don’t like you,” she said.
Mason said he’s concerned that the large number of legislators leaving the legislature this year means there will be even less interest in working across the aisle.
He said a major effort this year, on a bill to tighten regulation of the electric monopoly Dominion Energy, was an example of how that kind of cooperation worked – and that Norment and Senate Majority Leader Dick Saslaw, both of whom are retiring this year, played a central role in bringing a compromise home.
“They got everyone around the table to agree,” Mason said.
The bill provides for a way to spread out the impact of Dominion’s dollar-for-dollar pass through of fuel costs – expected to otherwise amount to a $17 a month increase beginning this summer for a 1,000 kilowatt-hour bill – while ending surcharges that currently account for $6 to $7 a month on those bills.
A key proposal from Norment, limiting the time for an alternative way to calculate the profit Dominion is allowed to earn, broke through what looked like an impasse between House and Senate.
“That was the big surprise to me,” Batten said, of the Dominion bill. “People were all over the map on that.”
