The House of Delegates Appropriations Committee on which I serve met this past weekend to complete its recommendations on state spending for the remainder of this year (HB29) and for the next biennium beginning July 1 (HB 30). The Senate Finance and Appropriations Committee chaired by Senator Janet Howell also completed its recommendations. These reports must be approved by their respective houses before a conference resolves differences that are inevitable between the two houses in time to go to the Governor for his signature before adjournment of the General Assembly on March 12, 2022.
I have not seen the Senate Committee recommendations yet, but from having just attended the House Committee where our recommendations were adopted, I can say that the budget for the next two years is an exceptionally good one. The reason is simple: the Commonwealth has more resources with which to meet the needs than ever before. The proposed biennial budget has a net general fund spending increase of nearly $10.3 billion over the previous two-year period. In contrast, there was only $2.7 billion in new spending in the last budget.
There has been an unparalleled rise in revenue with economic growth and substantial federal revenue increases during the pandemic. I have cautioned against calling the increased revenue a surplus because of the number of unmet needs in the state. I think the House Appropriations Committee does a good job of balancing taxpayer relief with funding short-term projects without recurring costs and with funding unmet needs. For example, the budget proposes to eliminate all sales taxes on food and hygiene needs with no loss in revenue to local governments. There is also a doubling of the standard deduction on the income tax that will return more money to taxpayers.
Substantial reserves are set aside in the budget to meet future obligations when revenues are not so strong. By FY2024 there will be an historic $4.4 billion in all reserves, that is more than 400% higher than the reserve level in FY2020 and is the equivalent to 16.8% of assumed revenues in FY 2024.
The budget includes a 15 percent increase in elementary and secondary funding and is the largest K-12 budget in Virginia’s history. There is funding for a five percent increase in teacher salaries and funding for additional school support personnel that in the past were funded entirely by local governments. A school construction fund is proposed to assist localities with school construction since half the schools in the state are over 50 years old. Additional funding is provided for programs in remediation and dropout prevention.
An additional $1.5 billion is provided in health and human services to address unmet needs. An additional 1,200 DD waiver slots are proposed bringing the total waiver slots to 18,139 for individuals with developmental disabilities. More than $101.0 million to increase funding for nursing homes is proposed with close supervision over quality of care.
In higher education there is an increase in support of $425.5 million to increase access and affordability. Major increases in agricultural best management practices and wastewater projects will help the state meet its objectives of Chesapeake Bay clean-up.
For more details on the proposed House budget go to hac.virginia.gov and for additional analysis go to thecommonwealthinstitute.org/budget-revenue.
Ken Plum is a member of the Virginia House of Delegates.
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