Legislators are scheduled to meet next week to try to complete the two-year budget for Virginia — but the two chambers, which are both under Democratic control, are no closer to an agreement than they were at the end of the legislative session a month ago.
The budget conferees, who are the negotiators from each chamber, have not met. But even if they had, it is unclear what money they would have to work with after a slate of amendments and vetoes by Gov. Abigail Spanberger.
Del. Luke Torian, D-Fairfax, who chairs the House Appropriations Committee, told Virginia Scope on Wednesday that the budget conferees have not met.
“The likelihood is that we will not be prepared for special session if there are no meetings,” he said.
“Right now, we can still hold out that there may be some meetings that take place, and if that’s the case, then we may be able to produce something,” Torian continued. “But if there are no meetings, then obviously we’re not going to have a budget to present.”
Sen. Louise Lucas, D-Portsmouth, who chairs the Senate Finance and Appropriations Committee, is standing strong against the House plan to continue providing a sales tax exemption for data centers in Virginia.
“I stand with the 67% of Virginians who think the state should end the sales tax exemptions for data centers,” Lucas told Virginia Scope Wednesday. “It is for this reason that I await a serious proposal from the data center group. This will facilitate efforts to get the budget done.”
The exemption, which was enacted in 2008, is estimated to cost Virginia more than $1.5 billion annually, according to Senate Democrats.
The task for budget negotiators became more complicated this week after Spanberger either vetoed or amended legislation that would have contributed to the state’s revenue.
The governor wants to delay the start of a marijuana retail market that legislators scheduled for Jan. 1, 2027, by six months to July 1. Sponsors of the legislation say the market is expected to generate $400 million in annual revenue for the state.
Spanberger also vetoed legislation to legalize skill games in Virginia, which was estimated to generate $249 million in revenue.
“When you have a $2 billion difference on top line revenue, there’s not a lot of progress that’s going to be made on expenses,” said Senate Majority Leader Scott Surovell, D-Fairfax, during an interview Wednesday morning.
Surovell predicted Tuesday that there will not be an agreement in time for the special session on April 23.
“When you have a governor who is throwing $300 or $400 million curve balls into the conversation with vetoes, it makes it very difficult to have those kinds of conversations until there’s more clarity about what her position is,” Surovell continued.
Spanberger’s Secretary of Finance Mark Sickles told the Senate Appropriations and Finance Committee on Tuesday that the administration is “working with the revenues that we have.”
Lucas said Spanberger’s veto actions made the debate over data center tax exemptions more crucial.
“The Governor’s amendments and vetoes make it even more important for us to carefully consider how we move forward with data centers, especially as it has to do with the expansion of tax exemptions.”
While it has never happened in modern times, if the General Assembly and the governor cannot reach a budget agreement before July 1, employees of the commonwealth will likely go without paychecks.
As of last summer, Virginia had over 160,000 state government employees.
Spanberger’s office stressed the importance of a budget agreement in a statement to Virginia Scope Wednesday.
“Passing a budget is the most fundamental obligation of the legislature,” said Libby Wiet, a spokesperson for the governor. “Every day a budget is delayed is another day of uncertainty for localities across the Commonwealth that can’t plan for the next school year, how to fund their local law enforcement, and maintain their roadways.”