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Virginia lawmakers say they have deal on ‘major components’ of budget, including rebates, tax cuts

The Virginia legislators who have been leading negotiations over the months-delayed state budget announced Friday they have reached agreement on the “major components” of a compromise proposal that would boost education spending and offer some tax relief.

The apparent deal includes a one-time tax rebate of $200 for individuals and $400 for joint filers, according to a statement from the negotiators. It would also increase the standard deduction, reinstate a popular sales tax holiday and allocate more revenue to public education and college financial aid, the statement said.

The actions are aimed at providing relief to low- and middle-income citizens and Virginia businesses, the negotiators said. The full framework of the proposed legislation — which will need approval from the full General Assembly and the governor — was not released. The statement did not specify the total proposed amounts of tax cuts or spending allocations, and it did not elaborate on any remaining sticking points.

“While the major components have been agreed to, our conferees and staff will be completing the final touches in the days to come. The deal is one that provides Virginians with additional tax relief and unprecedented investments in education, natural resources, and behavioral health. It is a win-win for the citizens of Virginia,” the money committee leaders — Democratic Sens. Janet Howell and George Barker and GOP Del. Barry Knight — said in a joint statement.

The politically divided General Assembly ended its regular session in February without full agreement on adjustments to the two-year state budget initially adopted in 2022. The state operates on a two-year budget cycle, with the plan initially adopted in even-numbered years and amended in odd-numbered years

Closed-door negotiations between the GOP-controlled House and Democratic-controlled Senate have plodded since then, frustrating school districts, local governments, and special interest groups and their lobbyists.

“While the negotiations have been deliberate and extended, we are very pleased that the outcome is both fair and balanced toward the priorities of the House and Senate. In an era when partisanship often prevails, the negotiations were cordial and respectful,” Friday’s statement said.

GOP House Speaker Todd Gilbert said in a statement that the development was “encouraging” and that discussions about when lawmakers might convene for a potential special session to consider the compromise legislation would take place over the coming week.

“We’re closer than ever before to providing real tax relief to Virginia families who are being squeezed by inflation and other skyrocketing costs, and providing historic levels of support for our schools,” Gilbert said.

Leaders of the broader Democratic Senate majority also signaled support for the proposal in written statements. Caucus Chair Sen. Mamie Locke said Friday’s development marked a “huge triumph for all Virginians.”

The budget negotiators said earlier this week, when they told reporters they were close to a final product, that a special session would likely take place in September.

The meeting will come at a busy time for lawmakers, who are in the midst of campaigning. Every General Assembly seat is on the ballot in November.

Macaulay Porter, a spokeswoman for Republican Gov. Glenn Youngkin, said in a statement that the governor would review the final details when they are released, adding: “Virginians welcome the news that the conferees have come to an agreement on a framework that builds on the governor’s work to deliver historic investments in education and mental health while providing significant tax relief which will reduce the cost of living in the Commonwealth.”

The apparent deal would also remove the age requirement for a military retiree tax benefit, something the governor has pushed for, according to the statement.

It presumably does not include the corporate tax cut Youngkin and House Republicans previously sought, which Knight indicated weeks ago his party had conceded.

House Democrats celebrated the agreement as a win for the working class over corporate interests.

“With their irresponsible demands for corporate tax cuts, the Governor and the MAGA Republicans in the House almost derailed the entire budget process. Luckily, Democrats stood strong and we were able to make them come back to the table to take care of our priorities right now,” House Democratic Leader Don Scott said in a statement.

Source: The Associated Press