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Virginia’s Proposed Budget Update – Courtesy of the Virginia Chamber of Commerce

by Andrea Winey

Tony Howard, President & CEO
January 3, 2024

Just before Christmas, Virginia Governor Glenn Youngkin presented his proposed budget for the 2024-2026 fiscal years, a spending plan that includes numerous investments in a wide variety of economic and workforce development initiatives long championed by the Virginia business community.

The Virginia General Assembly will open its 2024 Legislative Session on January 10th to consider the Governor’s budget proposal and other legislative proposals.

Here are some of the proposed investments by the Governor:

Taxes

  • Reduce income taxes by 12% for all tax brackets.
  • Increase state sales tax from 4.3% to 5.2% (a 0.9% increase)
  • Impose a new sales tax on digital goods.
  • Increase the Earned Income Tax Credit.
  • Though not included in his budget, the Governor has proposed repealing the car tax

Economic Development

  • $200 million for the Virginia Business Ready Sites Program and $25 million for the Virginia Business Ready Sites Acquisition Program.
  • $100 million to establish the Virginia Biotechnology, Life Sciences, and Pharmaceutical Manufacturing Network, a partnership involving the University of Virginia, Virginia Tech, and Virginia Commonwealth University.
  • $85 million over two years for the Major Headquarters Workforce Grant Fund
  • $60 million over two years for GO Virginia, to encourage regional cooperation among business, education, and government on economic and workforce development.
  • $15 million for the Virginia Economic Development Partnership to create a comprehensive marketing program to attract and retain the workforce in Virginia.
  • Nearly $40 million for the Commonwealth’s Development Opportunity Fund to incentivize economic development prospects to locate or expand in Virginia

Education & Workforce Development

  • Increased public education funding including $61 million for reading specialists, $30 million for College Partnership Laboratory Schools, and $40 million to develop a new state assessment system.
  • $26.1 million for the Diploma Plus grants to support industry-recognized credentials.
  • Continue funding for the Virginia Talent and Opportunity Partnership to increase internships and other work-based learning opportunities.
  • Increased funding of $9.2 million for the Workforce Credential Grant Program, to ensure workforce training programs are more affordable to students.
  • $7.8 million for Virginia Community Colleges to establish regional career placement centers.
  • $15 million for a new workforce recruitment program by the Virginia Economic Development Partnership

Child Care

  • $437 million over two years for Virginia’s Child Care Subsidy program to offset the ending of federal pandemic funding

Energy

  • $6 million for the Virginia Power Innovation Fund to support the research, development, and commercialization of new energy technologies.
  • Over $700,000 for the Office of Offshore Wind to grow this industry in Virginia

Environment

  • Over $400 million was proposed for resiliency, water quality improvements, and environmental remediation.

Infrastructure

  • $70 million to accelerate the completion of the Interstate 81 northbound widening project.
  • $20 million to the Transportation Partnership Opportunity Fund to support infrastructure improvements necessary for major economic development projects.

Health Care

  • Approximately $20 million for a variety of programs designed to recruit, train, and retain nursing talent across the Commonwealth.
  • Over $316 million for Right Help, Right Now funding to support school-based mental health services, crisis stabilization services, comprehensive psychiatric emergency programs, and Behavioral Health Loan Repayment program.

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