Virginia

Virginia

Budget Cycle
Biennial

Governor Submits Budget
December
Fiscal Year Begins
July 1 

Governor Signs Budget 
April-May

Proposed Budget - Fiscal Year 2023-2024

On December 16, former Virginia Governor Ralph Northam released a biennial budget for fiscal 2023 and fiscal 2024; newly elected Governor Glenn Youngkin released a series of budget amendments to the proposed biennial budget on January 21. The former governor’s recommended budget proposes all funds operating spending of $79.79 billion in fiscal 2023 and $78.24 billion in fiscal 2024. General fund operating spending would total $30.07 billion in fiscal 2023, an increase of 19.4 percent over the revised fiscal 2022 amount, and $28.18 billion in fiscal 2024, a decrease of 6.3 percent from fiscal 2023. The general fund revenue forecast estimates revenues of $25.79 billion in fiscal 2023, a decrease of 0.6 percent from revised fiscal 2022, and $28.08 billion in fiscal 2024, an increase of 8.9 percent over fiscal 2023. When transfers and balances are added in, total general fund resources are forecast at $32.12 billion in fiscal 2023 and $28.82 billion in fiscal 2024. The Revenue Stabilization Fund and Revenue Reserve Fund are estimated to have a combined total of $3.9 billion in fiscal 2023 and the budget assumes an unexpended balance of $149.4 million at the close of the biennium. The proposed budget contains multiple tax policy proposals: tax refund checks of $250 for individual filers and $500 for joint filers ($1.04 billion in fiscal 2023); eliminates the 1.5 percent state sales tax on groceries effective January 1, 2023 ($159.8 million in fiscal 2023 and $384.8 million in fiscal 2024); eliminates the accelerated sales tax ($202.8 million); and provides for a refundable individual income tax credit equal to 15 percent of the federal Earned Income Tax Credit claimed ($159.0 million in fiscal 2023 and $156.0 million in fiscal 2024).


Proposed Budget Highlights 

The former governor’s proposed biennial budget built on the priorities of his last four budgets: education, equity, and investments in working Virginians. The budget includes additional resources for education, behavioral health, public safety, and economic development, and also includes funding recommendations for American Rescue Plan Act (ARPA) allocations.

Education
  • Provides $751.0 over the biennium to fund a 5.0 percent salary increase in fiscal 2023 and an additional 5.0 percent salary increase in fiscal 2024 for funded instructional and support positions.
  • Includes $500 million to support school construction, renovations, and modernization.
  • Provides $354.5 million to fund hold harmless payments to school divisions for base year re-benchmarking data affected by COVID-19 and $331.6 million to update the cost of re-benchmarking Direct Aid to Public Education for the biennium.
  • Adds $114.0 million to increase funding for affordable access at public higher education institutions and $150 million for additional need-based financial assistance for in-state students.

Administration
  • $806.8 million for a 5.0 percent salary increase in each year for state employees, state-supported local employees and adjunct faculty/graduate teaching assistants at public institutions of higher education.
  • $1.1 billion for a mandatory deposit to the Revenue Stabilization Fund.
  • $924.0 million for a one-time deposit to the Virginia Retirement System to reduce unfunded liabilities, contingent on meeting the revenue forecast for fiscal 2022.
  • $40.7 million for the employer share of state employee health insurance premiums.

Health and Human Resources
  • Provides $821.2 million general fund to cover the cost of Medicaid utilization and inflation as estimated in the most recent expenditure forecast.
  • Adds $294.2 million to increase Medicaid reimbursement rates for developmental disability waiver services.
  • Provides $37.7 million to fund 249 behavioral health case managers in jails to provide baseline staffing for mental and behavioral health services.
  • Includes $39 million general fund to help add 1,200 developmental disability waiver slots.
  • Provides $2.5 million general fund to fund care coordination services to individuals who are Medicaid eligible 30 days prior to release from incarceration.

Public Safety
  • Includes $74.0 million to raise the entry level salary to $42,000 for sworn sheriffs’ deputies and regional jail officers.
  • Provides $85.2 million to increase minimum salaries and address salary compression issues for correctional officers and supervisory staff in state correctional facilities.
  • Adds $48.4 million to support a compensation plan for the State Police’s sworn positions, increasing the starting salary for new troopers and addressing pay compression.
  • Provides $27.4 million and 13 positions to establish the Virginia Center for Firearm Violence Intervention and Prevention.

Economic Development
  • Provides $190.0 million to support the Housing Trust Fund.
  • Adds $85.0 million to support anticipated payments from the Major Headquarters Workforce Grant Fund.
  • Provides $207.2 million in one-time funding to support the statewide planning, development and construction of multi-use trails.

American Rescue Plan Act (ARPA)
  • The budget includes $253.2 million in fiscal 2023 and $85.3 million in fiscal 2024 for the continuation of ARPA initiatives originally authorized during a 2021 Special Session.
  • The budget also includes $349.9 million in fiscal 2023 and $500,000 in fiscal 2024 in new ARPA State and Local Fiscal Relief Fund (SLRF) allocations.
    • Dairy industry support, Rebuild VA, mental health, public health initiatives, drinking water and wastewater, and ARPA reporting.
  • The budget further includes $141.7 million in fiscal 2023 and $43.2 million in fiscal 2024 for non-SLRF ARPA grant funding.
    • Public health initiatives, COVID-19 vaccine preparedness, disease intervention, maternal health support, and family violence prevention.
 

Newly elected Governor Glenn Youngkin released a set of 23 budget amendments to the proposed biennial budget on January 21. Highlights of the amendments include: doubling the standard deduction to $9,000 for individual filers and $18,000 for joint filers ($1.2 billion in fiscal 2023 and $852.3 million in fiscal 2024); phase-in of military retirement income tax exemptions over three years ($287.0 million in fiscal 2023 and $228.0 million in fiscal 2024); one-time tax credit for small businesses ($75.0 million in fiscal 2023); increasing the one-time tax rebate to $300 for individual filers and $600 for joint filers ($202.8 million in fiscal 2023); and funding for the creation of new Laboratory Innovation Charter Schools ($100.0 million in fiscal 2023 and $50.0 million in fiscal 2024).