Senate Finance and Appropriations Annual Meeting
This past week, the Senate Finance and Appropriations Committee (SFAC) convened at Radford University for our annual retreat. SFAC staff, economists, and researchers provided presentations on Virgina’s budget and current economic forecast in light of the uncertainty and instability resulting from the Trump Administration’s policies.
The upcoming session that begins in January 2026 also includes the critical work of crafting the next two-year, or biennium, budget. Members of the General Assembly will be amending the outgoing Governor’s budget after it is presented to the House and the Senate; the incoming administration of Governor-elect Abigail Spanberger will also be providing its recommendations.
Virginia’s General Assembly is mandated to present a balanced budget, and this next biennium budget faces considerable challenges because of the impacts of H.R. 1, the unfortunately-named “One Big Beautiful Bill Act,” that has dramatic and ugly consequences for all states. Virginia is already grappling with the cuts to Medicaid funding, the shuttering of rural hospitals, and the increased costs for programs such as the Supplemental Nutrition Assistance Program (SNAP) which helps to address hunger concerns for our elderly, individuals with disabilities, and children in poverty.
My primary and immediate focus is on Medicaid which serves over 1.8 million Virginians, including over 700,000 children. Federal funds deliver nearly 63% of all Virginia Medicaid spending, but changes to the program as outlined in H.R.1 significantly impact not only Virginia’s share of federal funding, but also the Commonwealth’s ability to supplement Medicaid. Of immediate concern is the way in which the Congressional bill restricts and scales down the provider tax paid by our hospitals and which Virginia uses to finance the state’s 10% share of Medicaid Expansion. As a result of the changes and cuts, Virginia will lose $48 billion in Medicaid funding, including both state and federal dollars, over the next decade. These billions of dollars in losses impact all of our hospital and healthcare system, affecting each of us.
The Medicaid forecast for Virginia is requiring an additional $410.3 million of spending in 2026, and $2.8 billion in funding over the course of this next biennium (2026-2028). The Commonwealth, as well as other states across the nation, simply does not have the revenue streams that can cover these costs. The disaster that is H.R.1 is deliberately crafted to destroy the Affordable Care Act, increase healthcare disparities, and harm Americans’ access to essential medical services. Additionally, we will see even further reductions in our hospital and healthcare staffing, including primary care and specialized physicians, nurses, and other key healthcare professionals.
As we look at the increasing concerns for food insecurity and hungry communities, the cuts to food assistance programs are devastating. SNAP is the largest federal food assistance program. Over 850,000 Virginians are enrolled in SNAP, including more than 300,000 children. Trump and GOP-led changes to SNAP’s eligibility, work requirements, and state cost-share include the following:
- H.R.1 removes SNAP eligibility for several categories of lawfully-present immigrants who are not Lawful Permanent Residents (Green Card holders), including those who have been granted humanitarian protections, refugees, asylees, and certain survivors of domestic violence, human trafficking, or other identified humanitarian protections.
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New work requirements in H.R.1 remove previous exemptions for specific groups, including for veterans, individuals who are homeless, and foster care youth who have aged out of foster care (18 - 24 years old). Able-Bodied Adults Without Dependents (ABAWDs) will have additional work requirements. Benefits for ABAWDs are limited to 3 months in a 36-month period unless individuals work, volunteer, or train for at least 80 hours per month. Many within this population are parents of infants and toddlers who are also unable to afford childcare or are caregivers of disabled loved ones.
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H.R.1 increases the share of SNAP administrative costs that states must pay and shifts SNAP benefit costs to states for the first time in the program’s history. The Virginia Department of Social Services has shared that the federal actions increase the potential annual cost to Virginia for SNAP by approximately $360 million, in addition to increases in administrative expenses. These forecasts were echoed by SFAC staff during our retreat.
These new costs, in addition to programs already under jurisdiction of the Secretary of Health and Human Resources, are projected to require at least an additional $3.5 billion over the 2026-2028 Biennium. Mandatory budget pressures outpace revenue growth for the state by nearly $420.6 million beginning in 2027. As we begin the work of crafting the next budget, we will need to evaluate the steps that Virginia will take to respond to the crisis generated by Trump’s H.R.1, the impacts of the DOGE attacks on Virginia’s federal workforce, and the recent economic hardships created by the longest federal shutdown in history.
Presentation materials on these topics, as well as the briefings on the U.S. and Virginia economic trends, K-12 and higher education funding, and the state of public safety funding in Virginia, are available. On December 17, the joint meeting of Senate Finance and Appropriations, House Appropriations, and House Finance will occur in Richmond; at this joint meeting, the current Governor will deliver his proposed budget to legislators.
