Budget and Home Stretch

Thanks to everyone who came out to my Town Hall meeting earlier this month. We had a great turn out and lots of good discussion. If you missed it, the event can be viewed in its entirety on CityScreen-12.

They don’t call it a short session for nothing! The past two weeks have flown by. February 7 was “cross-over,” which is traditionally the busiest day of the session. Cross-over is the half-way point where the House and Senate must complete work on their own bills. During a roughly eight-hour span we acted on over 145 bills. These included everything from very simple bills to extremely complicated subjects such as digital tokens and decentralized autonomous organizations (HB1784). Click here for a quick explanation in case you are similarly challenged in this area! 

Budget Negotiations

On February 9, the House and Senate acted on their respective versions of the budget. Since Virginia has a biennial budget process, this year we are amending the two-year budget adopted last year. The Governor introduces the initial amendments, and then the House and Senate add and subtract accordingly. Both budgets have plenty to like – and some things to dislike. 

Here are just a few of the major differences in the three budgets (Governor’s original and the House and Senate changes):

• K-12 Education. All three budgets increase funding for direct aid to school divisions, although the Senate investment ($1.02B) is about triple the amount proposed by the Governor ($321.1M) and the House ($382.8M). 
• Teacher and State Employee Salaries. While the Governor proposed a one-time bonus, the House and Senate converted that to a 2% salary increase. This approach will better help our employees to keep up with the impacts of inflation.
• Reading Specialists. All three budgets increase money for reading specialists, with significantly more by the House ($30.8M) and Senate ($51.1M) than the Governor ($16.9M). This funding is an important part of the plan to address COVID learning loss.
• Higher Education. Both the House ($75.6M) and Senate ($224.8M) include additional funding aimed at making higher education more affordable. No additional funding was proposed in the Governor’s budget.
• Health Care. All three budgets include funding for 500 additional developmental disability (DD) waiver slots. They also increase Medicaid reimbursement rates that are critical to quality health delivery services. However, the Senate increase ($210M) is significantly larger than the House ($53.8M) and Governor ($42.7M). 
• Mental Health. The Governor proposed much needed funding ($58.3M) for crisis receiving centers and stabilization units. The House ($83.3M) and Senate ($88.3M) add additional funds in this chronically underfunded area of government.
• Water Quality. All three budgets increase funding for water quality and Chesapeake Bay restoration. This is one area where the House ($432.3M) outdid (slightly) the Senate ($427M). 
• Resilience. The Governor and Senate propose $200M for the Resilient Virginia Revolving Loan Fund, while the House includes $100M (still a hefty amount).
• Economic Development. All three budgets include significant new funding for economic development, including site readiness for large projects. The House and Governor include $500M while the Senate has $300M.

I am pleased that several of my initiatives made their way into the House budget. These include:

• Livable Homes Tax Credit. Increases the total cap on the Livable Homes Tax Credit program from $1M to $2M. This program is designed to improve accessibility for people with disabilities and helps older adults by allowing them to retrofit their homes and age in place.
• Teacher Mentoring Program. Adds $630K to support and expand REACH Virginia. This mentorship program is designed to help new teachers succeed for the long-term. Supporting new teachers through mentorship is a key element to addressing Virginia’s current teacher shortage.
• Chesapeake Bay Restoration. Adds $10M to the Stormwater Local Assistance Fund (SLAF). This program provides grants to localities so that they can clean up polluted urban stormwater. This has the dual benefits of improving local streams as well as the Chesapeake Bay.

My greatest concern with the House budget is that it retains the Governor’s proposal to reduce the corporate income tax rate from 6% to 5%. Last year, the General Assembly cut taxes by $4B, most of which were targeted toward working-class Virginians. This additional cut has the potential to throw our budget out of balance – since our forecasters predict an economic downturn during 2023. In addition, most businesses I have talked to don’t consider our corporate tax rate to be unreasonable. It is squarely in the middle compared to other states. However, many businesses have cited investment in workforce development, site readiness, transportation infrastructure, and K-12 education as key factors in choosing to do business in Virginia – things that will be at risk if we lose an additional $362M in revenue.

You can find a good side-by-side comparison of the budgets by the Commonwealth Institute. A detailed overview by the House Appropriations Committee staff can be found here.

The budget bill is now in conference where differences between the House and Senate versions are being worked out. I am looking forward to reviewing the final recommendations.

Unsung Hero Bills

Workforce Development

This week, the General Assembly passed legislation to create a new Department of Workforce Development and Advancement (HB2195). The Department will be responsible for administering workforce development programs and overseeing a coordinated approach to program evaluation and data sharing.

In 2019, the Southern Regional Education Board (on which I serve as an advisory member) published “Unprepared and Unaware.” The document was a wakeup call that states need to not only focus more on workforce development – but also shift to highly adaptable programs that can keep up with wildly shifting workforce needs. The report notes that up to 44% of current manual work activities in the Unites States could be automated by 2030 and that “by 2030, between 3% and 14% of the global workforce will need to be able to perform a completely different job function than the one they did in 2016.”

While Virginia has made significant investments in workforce development, these programs are scattered among several different agencies. This new legislation will ensure that Virginia has an overall strategy for dealing with shifting technologies and market forces. That said, it is important to get this right! Simply consolidating programs, without linking them to industry experts in the field, can do more harm than good. But after many iterations, this bi-partisan effort was passed on a nearly unanimous vote.

Blue Lights!

Once upon a time, if a car was coming toward you and you were being blinded, it meant that the person forgot to turn off their high beams. Today, being blinded by an oncoming car is just as likely to come from purposefully installed “blue lights.” While these xenon (as opposed to halogen) bulbs can certainly light up the road, they are also a safety hazard for everyone else. There is a scientific reason for this. Not only are the bulbs brighter, but the blue wavelength achieves greater penetration into the retina, which results in more glare than other colors. The same phenomenon happens with blue holiday lights. They are pretty – but it is hard to look at them for a long period of time.

SB855 prohibits aftermarket modifications that make headlights appear as a blue light. The bill passed the House 87Y-11N and is now headed to the Governor.​

Now that session is wrapping up, I am happy to attend community meetings to provide an overview of issues debated and to get your feedback. If you are interested, please reach out to my legislative assistant, Rama Van Pelt, at [email protected] or (703) 310-6752.