Enacted Budget – Fiscal Years 2025-2026
On May 13, Virginia Governor Glenn Youngkin signed the state’s two-year budget bill for fiscal 2025 and 2026. The budget totals $87.5 billion in all funds in fiscal 2025, an increase of 5.1 percent over adjusted fiscal 2024, and $89.1 billion in fiscal 2026, an increase of 1.8 percent over fiscal 2025. General fund spending totals $31.8 billion in fiscal 2025, an increase of 3.7 percent over adjusted fiscal 2024, and $32.0 billion in fiscal 2026, an increase of 0.6 percent over fiscal 2025. The revised general fund revenue estimate for the bill is $28.6 billion in fiscal 2025, an increase of 1.0 percent over adjusted fiscal 2024, and $30.3 billion in fiscal 2026, an increase of 6.0 percent over fiscal 2025.
The budget includes the following education provisions: $969.0 million over the biennium to re-benchmark the cost of direct aid to public education; $350.1 million to continue access to childcare subsidies following the expiration of federal pandemic relief funds; $546.6 million for a 3.0 percent pay raise for K-12 teachers and support positions; $371.3 million to modify and expand support for at-risk students; and $205.4 million over the biennium to increase access, affordability, and degree production at public colleges and universities. Other provisions include: $178.8 million in fiscal 2025 and $366.4 million in fiscal 2026 for a 3.0 percent salary increase for state employees and state-supported local employees; $203.6 million over the biennium in new behavioral health spending; $175.1 million in fiscal 2025 and $538.9 million in fiscal 2026 for forecasted Medicaid utilization and inflation; closing four correctional facilities and assuming savings of $118.6 million over the biennium; $100.0 million in fiscal 2025 for the Community Flood Preparedness Fund; and $12.5 million each year for the Virginia Housing Trust Fund. Tax policy adjustments in the bill increase general fund revenue projections by $31.9 million in the first year and $44.7 million in the second year and include provisions such as increasing staffing dedicated to tax compliance, restoring the cap on the Land Preservation Tax Credit, assuming additional revenues from sports betting, and adjusting assumptions for education scholarship tax credits.