RICHMOND, Virginia – Legislators are meeting in behind-the-scenes meetings to try to finalize a budget compromise before the General Assembly is set to adjourn on Saturday, but they are divided by a House of Delegates desire for substantial tax cuts and a Senate desire for higher state employee salaries plus a desire to preserve more future tax revenues. House Appropriations Chair Barry Knight (R-Virginia Beach) said that negotiations may take too long to have a compromise ready for a weekend vote, although he emphasized that his Senate counterparts including Finance Chair Janet Howell (D-Fairfax) are cooperating in good faith.
“I think with the time constraints that we have, with the two bodies doing our business, I’m not sure we’re going to make it,” Knight told reporters on Tuesday.
The conference committee must have the compromise completed by Wednesday evening in order to have a Saturday vote since the legislature is governed by a rule requiring that the budget must be completed 48 hours before a vote to allow legislators to study the lengthy bill. That rule could be overridden with a super-majority vote, but Knight said it’s likely that the General Assembly will have to meet next week to vote on the budget bills.
One of the top problems for the handful of legislators who are working to craft the compromise is Governor Glenn Youngkin’s proposal to double the standard tax deduction, incorporated into the House budget, but not into the Senate budget, leading to a big difference in the amount of revenue available for spending.
“We’re talking close to $2.1 billion on the double standard deduction, compared to their zero on that,” Knight said.
State Senator Emmett Hanger (R-Augusta) is one of the senators in the budget negotiations. He’s taken a more moderate approach than some of the other Senate Republicans and says that Virginia’s surpluses right now are due in large part to one-time income. As a result, he wants the priority to be on one-time expenditures with studies to look at the potential impact of long-term reduced revenue from tax cuts, especially during hard times.
“Their [the House of Delegates] budget was predicated on the standard deduction, so that limited their resources,” Hanger told The Virginia Star. “Our position was that needs to be out there on a study where we’ll come back and come up with a logical way to absorb it because we’re talking about a huge amount of money.”
Gone from discussions is Youngkin’s call for a one-year gas tax suspension after bills to do that failed. Bills to double the standard deduction also failed, which Hanger said is part of the reason it shouldn’t be included in the budget.
“You can’t force consensus. You have to work for consensus, but you can’t force it,” he said.
Knight listed other differences, including the grocery tax. the Senate proposal eliminates the state’s share of the tax, while the House proposal eliminates state and local taxes.
Additionally, both chambers include salary increases for state employees including teachers and law enforcement. The Senate proposal is more generous, with five percent raises in each of the next two fiscal years alongside bonuses; the House proposal is four percent in each of the next two years alongside bonuses.
On the Senate floor on Tuesday, State Senator Chap Petersen (D-Fairfax City) exhorted the conferees to hold the line on teacher salary increases and cited the challenges from masking, distance learning, and other COVID-19 measures.
“We’ve had tremendous retention issues, we’ve had tremendous morale issues,” he said. “Our teachers are not paid the national average according to the statistics. The average salary for a teacher in the United States of America is $62,000 a year. The average salary for our teachers in the Commonwealth of Virginia is $56,000 a year. And we’re not one of the poorer states, so there’s really no reason for the discrepancy.”
Petersen said even the Senate’s five percent increase per year plus bonuses might fall short.
“We need to hold on to that; in fact, quite frankly, I’d like to see us hold onto it. Why? Because we’re living in a world of seven percent inflation right now. That five percent pay increase doesn’t mean as much as it would have a year ago.”
Knight told reporters a compromise on the pay increase is close.
“We’re coming together on that, I think we’re going to work that out today,” he said Tuesday.
Despite his expectation that the budget will not be ready for a vote by the weekend, Knight said things could change.
“If we can agree on five or six big issues, the rest of it will come together,” he said. “I’ve seen it many, many times where we were way apart, and in the last five, six hours it just came. So we’re working in good faith. Nobody is not meeting with each other, which has happened in the past, you know, ‘If you’re going to be that way we’re just not going to meet with you.’ We’re meeting, meeting every chance we get.”
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Eric Burk is a reporter at The Virginia Star and The Star News Network. Email tips to [email protected].
Photo “Barry Knight” by Barry Knight. Background Photo “Virginia State Capitol” by Skip Plitt – C’ville Photography. CC BY-SA 3.0.
