Few changes but plenty of political sparring as General Assembly adopts competing budgets | Govt-and-politics

The House of Delegates and Senate adopted competing budgets on Thursday with few changes but plenty of political sparring over billions in proposed tax cuts that separate the spending plans and the money available for public services.

The proposed two-year budgets are $3 billion apart. The Republican-controlled House followed the “day one” game plan of new Gov. Glenn Youngkin to carry out the promises of his gubernatorial campaign last fall, while the Democratic-run Senate drew a line over how much tax relief it’s willing to provide, while investing more in public education and other core services.

Senate Finance Chair Janet Howell, D-Fairfax, said the Senate budget strikes a balance between “the right amount of spending on restored or new services for the citizens of the commonwealth, and tax relief for those same individuals and businesses.”

The Senate approved the two-year, $166 billion spending plan by a 31-9 vote.

Earlier, it voted 36-4 to adopt a revised budget for the current fiscal year, which will end on June 30, after rejecting a proposal by Sen. Amanda Chase, R-Chesterfield, to spend $70 million in state tax funds on a “forensic audit” of the 2020 presidential election in Virginia, which Democrat Joe Biden won by 10 percentage points over then-President Donald Trump.

Six Republican senators backed the amendment, including two aspiring congressional candidates – Sen. Bryce Reeves, R-Spotsylvania, who faces an eight-candidate primary for the 7th District GOP nomination in June, and Sen. Jen Kiggans, R-Virginia Beach, who’s in a three-way primary race in the 2nd District. Senate Republican Caucus Chairman Ryan McDougle, R-Hanover, also supported Chase’s amendment.

The Senate approved only one amendment to the current fiscal year budget, which McDougle proposed to accelerate the repeal of special Department of Labor and Industry regulations stemming from the COVID-19 pandemic.

In the House, the current fiscal year budget passed on a vote of 100-0, but that was the end of unanimity, as Democrats lodged almost three dozen objections to the proposed two-year budget, as well as a series of floor amendments.

The Republican majority dismissed all of them – most of them on 52-48 party-line votes. More than 20 Democrats ultimately supported the budget, which passed on a 74-25 vote.

But the Democratic minority used the process to make political points about:

– the House budget’s almost $5.5 billion in proposed tax relief, which excluded a refundable tax credit for low-income families;

– the best way for the state to help local school divisions repair or replace crumbling buildings, either through a loan-rebate program included in the budget to raise up to $2 billion, or grants to localities;

– the slashing of more than $102 million in aid to Richmond and two other cities for eliminating polluted overflows despite the governor’s pressure on them to accelerate the work; and

– the refusal to make public the results of calls to a tip line that Youngkin established for the public to report on teaching of “divisive” subjects that the governor has sought to ban in public schools.

“We have a tip line established with taxpayer funds … things that we as a legislature ought to know about. Nobody can find out what they say,” said Del. Marcus Simon, D-Fairfax.

House Appropriations Chairman Barry Knight, R-Virginia Beach, said publicizing the emails would defeat the purpose of a tip line, which is to ease fear of retribution by making the tips anonymous.

Knight said Democrats’ attempt at shutting down the tip line through the budget could lead to an “unprecedented prohibition on the power of the executive branch.”

But the core of Democratic objections centered on tax cuts – specifically the doubling of the standard deduction for income tax filers at a cost of $2.1 billion over the first two years alone, coupled with the budget and finance committees’ refusal to support making 15% of the Earned Income Tax Credit refundable for working families that don’t earn enough to use all of the credit to offset state taxes.

Then-Gov. Ralph Northam, a Democrat, had proposed the refundable credit in the budget he introduced in December and Del. Cia Price, D-Newport News, had proposed the measure separately in legislation. The Republican-controlled committees rejected both.

“We are making a false choice,” said Price, who argued that the refundable tax credit is “the way to provide significant tax relief to working families.”

Knight argued that low-income families would benefit from the doubling of the standard deduction and the repeal of the state sales tax on groceries, as well as a proposal to roll back a 5-cent-per-gallon increase in the gas tax for 12 months.

In introducing the House budget, he noted that the budget Northam proposed included more than $10 billion in new revenues.

“Given this unparalleled growth in revenues, we approached this budget intent on spending not just the money we have available, but based our spending choices on what actually is needed,” Knight said.

The Senate budget excludes the change in the standard deduction and the suspension of the gas tax increase, while partly repealing the 2.5% grocery tax and protecting the 1% that goes directly to local governments.

“Targeted tax relief for those who need it most is critical, but we must do so in a manner that does not threaten core services for years to come,” former House Speaker Eileen Filler-Corn, D-Fairfax, said.

“At this unique moment, we have the ability to do so much more to reinvest in the future,” Filler-Corn said. “We owe it to Virginians, to our families, and to our children. That is what Virginia parents really want.”

Next week, the two bodies will appoint a conference committee to begin negotiating the wide differences between the two budgets before the assembly is scheduled to adjourn on March 12.