RICHMOND — On Wednesday, Virginia Governor Glenn Youngkin unveiled a budget proposal designed to offer tax relief for tips and vehicles, initiatives his Republican administration claims will benefit middle- and lower-income earners.
The proposal aims to revise the final year of the current two-year budget cycle and includes increased funding for education, maternal health programs, and disaster relief efforts. An advisor to Youngkin indicated that these adjustments are made possible through surplus funds projected for fiscal year 2024.
“We’ve managed to reopen Virginia’s economy after enduring a global pandemic, and through it all, we delivered surplus after surplus after surplus,” Youngkin stated during his address to the House and Senate money committees. “Consequently, Virginia is growing, leading, and winning.”
Generally, budget proposals introduced by governors undergo modifications by legislative committees prior to a vote. Given that Democrats are expected to retain control of both chambers of the General Assembly following upcoming special elections in January, Youngkin’s agenda may depend heavily on bipartisan cooperation.
Democratic House Appropriations Chair Luke Torian remarked on Wednesday that none of Youngkin’s suggested changes were off the table. He clarified that the state is facing a surplus projected between $2 billion and $3 billion, while highlighting the need for careful spending, particularly if economic conditions deteriorate in future years.
“We’ll thoroughly review the governor’s presentation to determine what adjustments can feasibly be made,” he said.
Among Youngkin’s proposals is the allocation of $1.1 billion from the surplus towards a fund for car tax relief, which would pre-fund the initiative for its initial three years. He proposed establishing a permanent, refundable income tax credit of up to $150 for individuals earning under $50,000 a year, alongside a $300 credit for joint filers earning less than $100,000 annually.
“Let’s provide Virginia families with relief from the most disliked tax in America since the tea tax: the local car tax,” he asserted.
Additionally, Youngkin advocated for the removal of taxes on tips, aiming to make Virginia the first state to eliminate such taxes nationwide. He claimed that this measure would generate savings of approximately $70 million, although some Democrats expressed skepticism regarding the feasibility of such financial relief.
“My concern stems from the vagueness in the legislation regarding the definition of tips, especially since this is uncharted territory,” Democratic Delegate Vivian Watts commented in a joint committee meeting. “I look forward to a thorough discussion before any legislation is enacted on how we will define tips.”
Addressing widespread concerns regarding immigration policy, Youngkin also proposed cutting funding to localities that do not fully cooperate with U.S. Immigration and Customs Enforcement, an effort he claims is aimed at eliminating sanctuary cities.
During his address, Youngkin suggested that local law enforcement and other officials should be mandated to inform federal authorities about the arrest of migrants at least 48 hours prior to their release. This proposal follows Youngkin’s appearances on national media platforms, where he has voiced concerns about illegal immigration.
“This is a matter of common sense. No one wants an illegal immigrant, especially one who has committed serious violent crimes, to be allowed back into the community,” Youngkin stated.
However, Youngkin’s proposed funding cuts for jurisdictions that disregard immigration detainers are likely to face resistance from Democrats. In the lead-up to the 2025 election year, immigration remains a significant issue for voters across Virginia.