The VMA and Kemper Consulting have issued the following:
2024 VA General Assembly Adjourns Sine Die
The Virginia General Assembly adjourned Saturday, March 9th, the 60th or the last in accordance with its joint procedural resolution adopted on day one of the session, January 10, 2024. Below is a quick recap of a few of the main legislative items we were advocating for or against.
Legislation Recap
- Fossil Fuel Moratorium - OPPOSED - Failed to pass
- Restrictive Natural Gas Requirements - OPPOSED - Failed to pass
- Railroad Crew Size Mandates - OPPOSED - Vetoed by Governor
- VEDP Site Readiness Grant Improvements - SUPPORTED - Passed
- VEDP Expedited Site Permitting - SUPPORTED - Passed
Even years or 60-day sessions are reserved for the adoption of the new biennial budget, while odd years or 46-day sessions are reserved for the adoption of budget amendments. Before adjourning today, the House of Delegates approved the 2024-2026 biennial budget by a vote of 62-37, and the Senate approved it by a vote of 24-14. The budget conference report was negotiated by twelve senior appropriators - six from each chamber - and in keeping with the legislative rules, it was voted on 48 hours after it was released on Thursday. Below is a quick recap of a few of the main budget items we were advocating for.
Budget Recap
- International Trade Plan (Item 113.M) $4.6m each year
- VA Business Ready Sites (Item 101.N.1-3) $20m
- Talent Accelerator (Item 113.J) $9m each year
- Mount Rogers Planning District Inland Port (Item 101.Q.1-4) $2.5m in FY26
Governor Youngkin proposed his biennial budget on December 20 and of note, offered significant changes to Virginia’s tax structure. He reduced income tax rates but increased the state share of the sales and use tax by almost one percent, as well as applying it to digital service sales, a new taxable item. Additionally, the Governor asked the General Assembly to eliminate the local personal property tax on vehicles.
The General Assembly eliminated Youngkin’s tax cuts but maintained the digital service sales tax and added a new business-to-business tax on “software application purchases.” The General Assembly also restored Virginia’s participation in the Regional Greenhouse Gas Initiative, an 11-state market requiring energy producers to offset carbon emissions with “purchase allowances.” Youngkin eliminated the program in his budget despite the fact the dollars support flood control projects and energy-efficient programs for low-income Virginians.
Combined, these actions generate more than $2.0 billion in additional biennial revenues and provided the revenues needed for the General Assembly to:
- Increase public education spending by $2.5 billion over the current base;
- Provide three percent salary increases each year to state and state and local employees;
- Appropriate $527.8 million over the biennium to support early childhood care and education programs, representing a $116.7 million increase above the introduced budget;
- Fully fund the Medicaid and children’s health insurance forecasts;
- Restore the local share of the sales and use tax on groceries for public education; and
- Appropriate $65.0 million the first year and $84.5 million the second year for additional operating assistance to the Washington Metropolitan Area Transit Authority (WMATA). These expenditures, combined with increased local support, will generate approximately $150.0 million, each year, for Metro.
Governor Youngkin expressed concern with the General Assembly’s budget and specifically criticized the tax increases. The Constitution of Virginia provides governors wide-ranging legislative authority. In addition to signing bills into law and issuing vetoes, the chief executive can offer amendments to legislation, including the budget. Governors also can issue line-item vetoes to specific budget provisions. Lastly, governors can propose new legislation (“send down a new bill”).
Friday, Governor Youngkin acted on 84 bills requiring his Constitutional consideration before midnight. He vetoed eight bills. After today, he has 30 days or until midnight on April 8 to act on more than 1,000 bills approved by the General Assembly including the budgets – HB 29, the Caboose budget bill (amendments to the current year that ends on June 30, 2024), and HB 30, the new biennial budget for fiscal years 2025 and 2026.
Youngkin is expected to issue a significant number of gubernatorial vetoes and propose amendments to an untold number of bills. It will be difficult, if not next to impossible, for the legislature to garner two-thirds majorities required to override his vetoes. Gubernatorial amendments are approved with a simple majority. The Democrats control both chambers by slim majorities (51-49 in the House and 21-19 in the Senate).
As Kemper Consulting previously reported in its November election report, the Democrats regained control of the House and the Democrats maintained control of the Senate but lost one seat to the Republicans. The General Assembly welcomed a modern-day record number of new senators (18) and new delegates (35). The historic number of new members was the result of Virginia’s revamped redistricting process that spawned a significant number of competitive primaries and a wave of retirements (voluntary and involuntary). The retiring members accounted for more than 700 years of legislative service. Kemper Consulting’s election report showing all new members is available here.
The General Assembly is scheduled to reconvene on April 17th to act on the Governor’s recommendations. The Governor wants approval of the proposed arena development in Alexandria and has voiced concern, if not opposition, to several key bills on which he will act, including at least two priorities of the Democrats - legalization of marijuana and an increase in the minimum wage. The runup to April 17th may provide the Governor and Democratic majority an opportunity to reach agreement on a number of these issues.
As always, do not hesitate to contact us. We will provide key updates as necessary between now and the scheduled reconvened session on April 17th.