CUs Pleased With Legislative Wins, But General Assembly Adjourns Without Budget Deal

Sources: Washington Post and Richmond Times-Dispatch

The Virginia General Assembly ended its legislative session Saturday without reaching agreement on sweeping changes to the state budget, leaving both tax cuts and massive new spending on the table as Republicans and Democrats couldn’t break a late deadlock over priorities.

Instead, lawmakers approved spending some $250 million to patch an accidental shortfall in revenue for local school systems around the state, caused by a glitch in the state’s tool for calculating education funding. Senators and delegates also passed a handful of technical fixes to the two-year spending plan related to the state retirement system and to a mandatory rainy day fund.

But otherwise, they punted. With more than $3 billion in surplus revenue left unspent, lawmakers will head home to fundraise for a busy election season.

Republicans who control the House of Delegates and Democrats who control the state Senate had neared a budget deal Friday night only to have Senate Democrats balk at plans for extensive tax cuts as requested by Gov. Glenn Youngkin (R), according to several lawmakers who spoke on the condition of anonymity to discuss the closed-door negotiations.

Youngkin was seeking $1 billion in tax cuts on top of the $4 billion in tax cuts the General Assembly approved last year. Senate Democrats were holding out to use more of that money to make up for long-underfunded education expenses and to provide raises for teachers.

League Offers Recap as General Assembly's Regular Session

See our recap of the session here. We're pleased to note a couple of key wins this session, including our cryptocurrency custody services measure and a measure that codifies the Virginia Community Development Financial Institutions Fund, originally created in the 2021 Appropriation Act, and establishes the Virginia Community Development Financial Institutions Program to carry out the purposes of the Fund. Your League read through thousands of bills filed this session and tracked around 100 that were of particular interest to credit unions. Approximately half of these bills ultimately passed the legislature.

The governor has until midnight on March 27 to act on bills passed this session.