RICHMOND (AP) — Virginia Gov. Glenn Youngkin on Wednesday proposed a state budget plan to provide tax credits on tips and cars, measures his Republican administration says are aimed at returning money to middle- and lower-income workers.
The proposal, which would change the final year of the state’s two-year budget cycle, also aims to boost funding for schools, maternal health care and disaster relief. An adviser to Youngkin said before his speech that the proposed adjustments are fueled by excess funds coming out of the 2024 fiscal year.
“We reopened Virginia’s economy after a global pandemic while producing surplus after surplus after surplus,” Youngkin said in a presentation to the General Assembly’s money committees. “And as a result of us working together, Virginia is growing, Virginia is leading and Virginia is winning.”
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Budget plans introduced by governors are typically reviewed by the money committees before lawmakers vote. And with Democrats poised to retain control of both chambers of the General Assembly after January’s special elections, Youngkin’s priorities will likely hinge on bipartisanship.
Democratic House Appropriations Chairman Luke Torian said Wednesday that none of Youngkin’s proposed amendments were off the table, clarifying that the state had about $2 billion to $3 billion in excess funds. He also said the state must be strategic in its spending, especially if the economy takes a downturn in the coming years.
“We’ll go through the governor’s presentation and see what applies — what we can do, what we can’t do,” he said.
Youngkin said $1.1 billion from the state’s surplus could be put into an auto tax-exemption fund that could pre-fund the state’s first three years. In his speech, he proposed a permanent, refundable income tax credit of up to $150 for people making less than $50,000 a year, and up to $300 for joint filers making less than $100,000 annually.
“Let’s give Virginia families relief from the most hated tax in America since the tea tax: the local car tax,” he said.
He also pushed for Virginia to eliminate taxes on tips, making the Old Dominion the first state in the U.S. to take such action. Youngkin argued that the proposal would save $70 million, although some Democrats questioned whether such fiduciary relief would be feasible.
“My concern is that as I read the legislation, there was actually no definition of what gratuities are, as this is ground that has not been plowed before,” Democratic Rep. Vivian Watts said during the joint committee meeting. “I look forward to a discussion before we take action on any such legislation on how we define tipping.”
Echoing national concerns around immigration, Youngkin emphasizes that he would also like to cut off funding for local entities that do not fully comply with U.S. Immigration and Customs Enforcement — an initiative he says would eradicate sanctuary cities.
In his speech, Youngkin said local law enforcement officers, sheriffs and jail directors should be required to notify federal authorities of the arrest of migrants 48 hours before their release. His proposal comes after the governor took to national news networks to decry illegal immigration.
“This should be common sense. I don’t think anyone wants to see an illegal immigrant who committed a serious and violent crime released back into the community,” Youngkin said.
Youngkin’s proposal to deny money to jurisdictions that ignore immigration detentions would likely be blocked by Democrats. But as lawmakers enter an election year in 2025, immigration could become a key issue for voters across the state.
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Olivia Diaz is a staff member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.
