Youngkin Unveiled His Final Budget Proposal
Last week in front of the Joint Appropriations Committees of the General Assembly, Governor Youngkin unveiled his final biennium budget proposal. The Governor and his finance team delivered the message that Virginia is on stable financial footing. As reassuring as this message sounds, it contradicts the forecasts of economists who point to rising costs for the average consumer, the loss of federal jobs, the rising rate of unemployment overall, and other global uncertainties. His message also sounds significantly hollow for the hundreds of thousands of Virginians who are facing hardships as the federal government, under Republican leadership, failed to renew critical healthcare support that would enable families to maintain health insurance and as Speaker Mike Johnson moves to slash essential Medicaid funding.
With these concerns in mind, we see a significant credibility gap between the Governor’s rhetoric and the budget’s real impacts. First of all, the articulated tax changes contain a mixture of permanent and temporary measures, and many taxpayers will not see their full effect without further legislative action; these measures impose considerable demands on the budget and will affect schools, infrastructure, and critical services such as health care. Moreover, by making tax cuts a priority over serious, sober, and robust revenue planning, the budget risks underfunding these services at a time when needs are rising because of federal actions. Economists are warning of possible economic downturn pressures about which we must be cautious.
More concerning are the practical gaps in funding for essential services. The proposed budget falls short of fully covering projected costs when compared with estimates by our own legislative analysts, who see a larger price tag for maintaining current levels of government services. Youngkin’s answer, that administrative efficiencies will close the gap, strains credulity given the structural complexities of Medicaid, nutrition assistance programs, and the likelihood of continued rising costs of health care, especially at the state level.
In education, Youngkin touted his administration’s investments in teacher compensation and K-12 funding; these investments have been made by the Democratic-led General Assembly over the past two years. The administration’s new commitments are likely underestimating our long-term needs. The budget’s benchmark funding for schools is strong, but it is still below what Virginia’s own analysts project as necessary. In the past few years, under this administration, we have faced significant school funding shortfalls due to drafting errors and misallocations, and these funding shortfalls have placed significant strain on the budgets of local governments.
Another glaring omission in the Governor’s outline is targeted funding for critical infrastructure needs, such as clean water systems. His proposal did not include funding for the Combined Sewage Overflow (CSO) situation in Richmond which must still be addressed if we are to adequately respond to the public health and environmental impacts of an aging infrastructure in the Capitol city. This gap raises important questions about how essential priorities are being overlooked in the budget proposal.
The released budget proposal does not present sustained investment in core public services such as education, health care, infrastructure, and other critical areas. Our incoming new administration, as well as the newly elected House of Delegates and the returning state Senate, will face the difficult work of correcting and amending these imbalances in order to ensure that long-term and necessary government responsibilities are met while also balancing economic stability and fiscal responsibility.
