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Editorial: A product of compromise

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Sen. Janet Howell (left), D-Fairfax, chair of the Senate Finance and Appropriations Committee, and Del. Barry Knight, R-Virginia Beach, chair of the House Appropriations Committee, led the budget negotiations.

The Virginia General Assembly reached agreement on a budget last week, and that’s a good thing.

For one, it averts the possibility of entering the new fiscal year on July 1 without a spending plan, ensuring the continuity of state government services. For another, the deal is a fair one, representing concessions from both sides in the interest of finding a compromise.

Though the work was sometimes contentious and the negotiation process too opaque, lawmakers delivered a healthy mix of tax relief and investment in public programs that should benefit the commonwealth over the next two years.

Lawmakers came to Richmond in January following a November election that brought significant change to the capital. Gov. Glenn Youngkin is the first Republican executive in eight years; the GOP returned to the House majority after two years of Democratic rule.

Awaiting them was the largest budget surplus in memory, a whopping $2.6 billion in revenue at the close of the last fiscal year. Returning some of that money to taxpayers was a priority for members of both parties, but while Republicans favored larger tax cuts and rebates, Democrats largely wanted more modest relief coupled with substantial investments in areas of broad public need.

Polling earlier this year by the Wason Center at Christopher Newport University showed popular support for a healthy mix of tax relief and public spending, but Republicans could rightly claim a mandate for their approach due to last year’s election.

While lawmakers were unable to find common ground during the session, both sides insisting they wouldn’t budge on their priorities, negotiations in the months that followed saw leaders of the “money committees” — House Appropriations Chairman Barry Knight, R-Virginia Beach, and Senate Finance Chair Janet Howell, D-Fairfax — produce something that worked for both sides.

As a result, Virginia taxpayers will enjoy larger standard deductions on their state taxes ($8,000 for single filers and $16,000 for married couples filing jointly, up from $4,500 and $9,000, respectively) and rebates — $250 per single filer, $500 per married couple — in line with the budget proposal of outgoing Gov. Ralph Northam.

But there was also compromise. Lawmakers eliminated the state’s 1.5% portion of the grocery tax but left the 1% local-option grocery tax intact. Virginia will reduce its tax on military retirement (Republicans wanted it eliminated altogether) and increase the earned-income tax credit (Democrats wanted a larger boost).

But there are also plenty of spending increases that will strengthen communities across the commonwealth — including raises for teachers and state employees, millions for gun violence prevention programs, $100 million for lab schools (a Youngkin priority), $1 billion for the state retirement system, and $40 million for affordable housing.

Importantly, this spending plan hedges against the ongoing economic uncertainty as the nation continues its recovery from the pandemic and inflation remains a concern in most Virginia households. Caution is always to be applauded and warranted here.

However, it would have been better to see some of these discussions take place in public, rather than in private, and to give the public more time to review the proposal before the legislature convened to adopt it this week. The process left much to be desired in terms of transparency.

Ultimately, both Republicans and Democrats can point to provisions of the two-year budget that advance their interests and reflect their principles. That’s no small achievement these days. And with money coming back to Virginia families along with more money for education and other needs, this is a compromise that puts the commonwealth on sound footing.

It may have come three months later than expected, but lawmakers deserve credit for the what they achieved working together.

— The Virginian-Pilot & Daily Press Editorial Board

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