Show me the money, General Assembly!

We survived crossover last week, with the House passing mostly regressive and backwards-moving GOP bills and the Senate passing some important reforms, many of which are unlikely to survive in the House.

This week we begin to focus on the budget:

Breaking from precedent set by Governors Northam, McAuliffe, and McDonnell before him, Gov. Youngkin introduced executive amendments to the proposed budget, and did not say where the money would come from to pay for the additional $3.5 billion in expenditures he proposes.

His additions include:

• Doubling the standard deduction for taxpayers ($2.1 billion)
• Exempting military retirement benefits from state taxation
• Increasing the proposed one-time tax rebates to $300 for singles, $600 couples
• Suspending the $0.05/gallon gasoline tax increase
• $150 million for “lab schools”
• $50 million to put an SRO into every school
• $100 million federal funds from American Rescue Plan Act to fund law enforcement training and equipment

The House and Senate money committees met on Sunday to approve the reports of the budget subcommittees, and report the budget out to the floor. Next will come discussions on the floor, proposed floor amendments, and then members of the House and Senate will go to conference to work out a compromise between the two very different budgets. Here are a few of the differences:

Taxes:

• Both include the elimination of the grocery tax and menstrual products tax exemption
• House doubles standard deduction
• Senate gives $250/$500 one-time rebates; House gives $300/$600 
• Senate makes EITC refundable up to 20% of the federal EITC

Pay raises:

• Senate gives 5% each year pay raises to state employees and school teachers, plus targeted additional raises to jobs difficult to fill. House only gives 4% pay raises.
• Senate raises direct care behavioral health worker pay to 75% of the benchmark; House only raises to 50th percentile.
• Both budgets spend $89 million over the biennium to increase starting salaries of sheriff deputies and regional jail staff

Public Education:

• 2023 direct aid to local schools: $9.5 billion in Senate budget vs $8.8 billion in House budget; 2024 direct aid: $9.3b Senate vs $9.1b House
• Senate adds $500 million from General Fund plus $200 million from the Literary Fund for school construction and modernization; House allocates $291 million from General Funds and $250 million from the Literary Fund 
• The House budget spends $58.3 million to increase at-risk add-on, while the Senate spends $268 million

Health and Human Services:

• Senate allocates $33.8 million over the biennium for permanent supportive housing for those with severe mental illness, versus $18.7 million in the House
• House and Senate both increase developmental disability waivers by 1200
• Total Senate increases spending on Health and Human Services by $2.1 billion, where the House only adds $1.5 billion

Natural Resources:

• The Senate deposits $170 million of the $370 million RGGI proceeds into the Community Flood Preparedness Fund, and another $190 million of those proceeds on a housing energy efficiency innovations program. The House report only mentions spending $11 million on flood damage in the town of Hurley.

Business:

• Senate budget adds $190 million to the Housing Trust Fund for affordable housing construction
• Senate spends $85 million on advance grant payments for Amazon HQ, House spends $120.5 million
• Senate budget includes $10 million “driving decarbonization” fund and $10 million low- to moderate-income solar loan rebate program