Virginia Gov. Glenn Youngkin proposes budget cuts and tax restructuring
RICHMOND, Va. (AP) — Virginia Gov. Glenn Youngkin (R) presented a state budget on Wednesday that includes cuts to income taxes but an increase in the sales tax. Youngkin’s administration says this approach aims to make state finances more resilient by shifting the revenue stream from what people earn to what they spend.
The proposed two-year plan includes increases in funding for mental health, child care, and pay for teachers and state employees, although the pay raises are smaller than in recent years. With Democrats set to take control of both chambers of the General Assembly, Youngkin will have to work across the aisle to get his priorities enacted.
The governor called the budget the “unleashing-opportunity budget” and emphasized the need for lawmakers to work together for the public good.
This budget presents Youngkin’s single biggest chance to put an imprint on state policy. The governor seems to have taken a less confrontational approach than when he first took office.
On the issue of tax cuts, Youngkin is proposing a 12 percent reduction in all income tax rates, a measure he previously tried but failed to achieve. This time, he’s also proposing to increase the earned income tax credit for low-income working families, something Democrats have long sought.
The proposed income tax cuts would cost the state about $1.1 billion in the first year and $3.4 billion in the second year. To offset this, Youngkin is proposing a 0.9-percentage-point increase in the state sales tax, as well as expanding sales tax into digital areas that are not currently taxed in Virginia.
Youngkin’s spending priorities are likely to draw bipartisan support in the General Assembly, especially in areas such as mental health and child care services. However, his pay proposals for teachers and state employees are less generous than those favored by Democrats.
This story is developing and will be updated as more information becomes available.