Youngkin, Va. lawmakers agree to seek new state budget, avert crisis

While Democrats who control both houses of the Legislature expressed no interest in Youngkin’s plan to radically rewrite the budget they passed March 9, it appeared the state was headed for a showdown in which Youngkin would exercise its veto over the entire budget for the first time. .

That, in turn, would leave Virginia facing a possible — and unprecedented — state government shutdown if no budget compromise is reached by the end of the current fiscal year on June 30. .

Wednesday morning’s agreement unites lawmakers and the governor united around the idea of ​​avoiding this breakdown in governance, which threatens to upend Virginia’s coveted AAA rating and undermine the state’s reputation for good budgetary management.

According to the two people familiar with the matter, who spoke on the condition of anonymity to share private negotiations, Youngkin and a bipartisan group of leaders from the state House of Delegates and Senate met in the state Senate building. General Assembly and agreed to find a way. out. That will involve the seemingly drastic step of rejecting all 233 of Youngkin’s proposed budget amendments and then procedurally killing the underlying document, according to the two people.

But even though that appears to leave the state in an even worse situation, lawmakers and the governor agreed to work on developing a new two-year spending plan based on the General Assembly’s budget, but in acknowledging Youngkin’s opposition to a proposal to extend the state budget. state sales tax on digital goods and apply the new tax to businesses as well as consumers.

There is no agreement to permanently abandon that plan, the people said, but there is an understanding that some sort of compromise will have to take place. Youngkin himself initially proposed the tax change, but it was in concert with other tax cuts that lawmakers rejected. Youngkin’s administration also announced Tuesday that the state is running a surplus of about $1 billion, providing a potential source of funding for legislative priorities such as teacher raises and higher education.

Youngkin and General Assembly leaders agreed to hold a special legislative session, likely in mid-May, to conclude the budget process well before the June 30 deadline.

This story is developing and will be updated.