RICHMOND — 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.
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.
“We ran out of time,” Sen. Janet D. Howell (D-Fairfax), co-chairwoman of the Senate Finance and Appropriations Committee, told senators. She said House and Senate negotiators would continue working on a broader bill, insisting that “we’re not that far apart.”
House Appropriations Chairman Del. Barry Knight (R-Virginia Beach) agreed that the two sides would continue pursuing a deal, but said: “We’re very far apart on the money.”
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.
They could yet reconsider. If negotiators are able to come up with an agreement, Youngkin could summon the legislature back to Richmond for a special session to take up budget items.
“We’ve still got a lot of real work to do on the budget,” Youngkin said at a brief gathering with reporters after adjournment. “Virginians deserve an opportunity to see our legislature and our government work for them. And we have $3.6 billion of surplus and there is plenty of money for tax cuts and to invest in these most important priorities like education and like behavioral health and law enforcement. We can get this done.”
While Youngkin and budget leaders were cordial and upbeat about prospects for an agreement down the road, House Speaker Todd Gilbert (R-Shenandoah) struck a sharper note on Twitter: “[T]he Senate’s brick wall may turn into a barrier to better schools, safer communities, and putting people’s hard earned money back in their own pockets."
One major item that did get resolved during a session otherwise hampered by partisan gridlock: Measures to tighten regulatory oversight of the state’s biggest public utility, Dominion Energy.
A bipartisan group of lawmakers had struggled until the final hours of the session to craft complex legislation aimed at restoring the State Corporation Commission’s ability to regulate Dominion and set rates for what consumers pay for electricity. That power had been eroded in recent years by a legislature that was often seen as in the thrall of Dominion, a generous campaign donor to both parties and considered almost a shadow governmental body.
A growing number of Democrats had pushed to rein in Dominion’s ability to make money and bill consumers, joined by a handful of consumer-minded Republicans. This year many credited Youngkin with stepping in to tip Republicans toward regulatory overhaul.
The 59-page bill passed Saturday would subject Dominion to rate reviews by the SCC every two years instead of the current three. It also rolls a series of surcharges into the base electricity rate for consumers and sets up a mechanism for securitizing a spike in fuel costs over several years. Those two changes are expected to save the average residential electricity customer more than $20 a month.
In addition, the bill reasserts regulatory control over how much Dominion can earn. As of 2024, the utility’s target for return on equity, or profit margin, will be set at 9.7 percent, less than the 10.5 percent the company was said to have sought. (Dominion said later that it had sought 10.05 percent.) After that year, the SCC is free to set profit at whatever level it sees fit. The measure also establishes that 85 percent of over-earnings should be refunded to customers, up from 70 percent now.
Sen. Chap Petersen (D-Fairfax), who has worked for years to get tighter public control over the utility, urged his fellow senators to support the measure.
“Today we’re going to vote on a bill that was not dictated to us by Dominion Power, but rather, it was people working together from different viewpoints — the ratepayer viewpoint, the power company viewpoint, the industrial consumer viewpoint, even the environmentalist viewpoint,” Petersen said. “Not everybody got what they wanted, but you didn’t have one entity dominating the conversation. I think that’s historic.”
Sen. Scott A. Surovell (D-Fairfax) warned, however, that the bill will be undermined by the General Assembly’s failure to reach an agreement to fill two vacancies on the three-seat SCC.
“In order for somebody to be looking out for the little guy, we have to have a regulator that’s ready to follow through on all the discretion to be given [to the SCC] under this bill,” he said. “Right now, there’s only one commissioner sitting on the SCC and two vacancies. And that’s not getting resolved … None of this works unless we can also reach that compromise.”
The legislation passed the Senate 40-0; the House approved its version of the measure 94-1.
“This is really and fundamentally about restoring public trust in utility regulation,” said Del. Lee Ware (R-Powhatan), who had sponsored similar legislation for years without success.
Dominion spokesman Aaron Ruby thanked the legislature and executive branches for working on the legislation, calling it “a win for consumers and regulatory oversight. It will lower electricity bills for our customers, reduce the impact of rising fuel costs and strengthen SCC oversight.”
“For too long we’ve been regulating utilities through the General Assembly and not the SCC,” Youngkin said Saturday, adding that he was “very pleased” with the legislation.
All 140 seats in the legislature are up for election this fall, and with new district boundaries, next year’s House and Senate are set to look far different from the bodies that adjourned Saturday. A host of veteran lawmakers have announced plans to retire, and much of Saturday was devoted to farewell and tribute speeches.
Senate Majority Leader Richard L. Saslaw (D-Fairfax), who will hit 48 years in the legislature when his term ends in January, and Del. Ken Plum (D-Fairfax), who will hit 44, are both retiring after two of the longest runs in General Assembly history. Saslaw is the longest-serving senator and Plum the second-longest serving delegate.
Others who announced or confirmed Saturday that they will not seek reelection: Del. Rob Bell III (R-Albemarle), chairman of the House Courts of Justice committee; Del. Jeff Bourne (D-Richmond); Del. Roxanne Robinson (R-Chesterfield); Del. Margaret Ransone (R-Westmoreland); Del. James Edmunds (R-Halifax); Del. Dawn Adams (D-Richmond); Del. Tim Anderson (R-Virginia Beach); Del. Michael P. Mullin (D-Newport News); Del. Kathleen Murphy (D-Fairfax); and Sen. Jill Holtzman Vogel (R-Fauquier).
The Senate will see one seat turn over even before it reconvenes for the annual “veto session” on April 12, with Sen. Jennifer L. McClellan (D-Richmond) heading to Congress. McClellan on Tuesday won the 4th District seat vacated after the death in November of Rep. A. Donald McEachin (D).
Democrats will hold a firehouse primary Sunday to choose from among three candidates: Dels. Dawn Adams and Lamont Bagby, and activist Alexsis Rodgers. Republicans have not announced plans to run anyone in the deep-blue district, but they have until Sunday to put forward a nominee. The winner of the March 28 general election will serve the remainder of McClellan’s term, which expires in January, and would have to stand for election again in November.
While the divided legislature came up short this year on hot-button issues such as abortion and gun control, it tackled several other key areas with varying degrees of success. Among them:
Criminal justice. Both chambers approved a bill to classify fentanyl as a “weapon of terrorism.” If approved by Youngkin, Senate Bill 1188, sponsored by Sen. Bryce Reeves (R-Spotsylvania), would subject anyone who intentionally manufactures or distributes any substance containing fentanyl to a Class 4 felony, punishable by up to an additional 10 years in prison — on top of underlying drug charges. The charges would not apply to those who merely use the drug.
Youngkin had pushed for legislation to make fentanyl makers or dealers subject to second-degree murder charges, punishable by up to 40 years, if the drug resulted in someone’s death. But the Senate killed that measure, House Bill 1642.
Marijuana. The General Assembly legalized recreational marijuana for adults in 2021 but has never worked out a legal way for them to get their hands on the substance, unless they grow it themselves. (The law allows cultivation of up to four plants per household.) Nothing changed on that front this year, despite the introduction of bills proposing various retail frameworks from Republicans and Democrats alike.
China and Israel. The General Assembly took an unusual detour into foreign affairs this year without much to show for it. Republicans introduced a stack of bills aimed at China at Youngkin’s behest, following the governor’s decision to pull Virginia out of the running for a $3.5 billion Ford plant in an economically distressed area near Danville because the electric-vehicle battery factory would use Chinese technology.
Senate Democrats defeated Republican bills to prevent public colleges and universities from participating in Chinese-funded grants or to prohibited state agencies from entering into contracts with any company owned or operated by a foreign adversary.
The legislature did pass bills prohibiting land sales to foreign adversaries after Youngkin warned that the Chinese government might try to buy Virginia farmland. It also passed a measure that directs the state’s economic development arm to study establishing a Virginia trade office in Taiwan, the self-governing island that claims independence from China.
The General Assembly also took up two bills related to Israel, a country whose religious significance to Christians and Jews has made it a central foreign-policy concern for the GOP’s evangelical base. The Republican-sponsored measures, killed by Senate Democrats, would have banned state and local governments from doing business with companies that engage in a boycott of Israel.
LGBTQ issues. The General Assembly elevated Richmond General District Court Judge Tracy Thorne-Begland to the city’s Circuit Court absent the fireworks ignited a decade ago when, as an openly gay prosecutor, he first sought to become a judge.
At the same time, the Republican House this year killed measures to repeal the ban on same-sex marriage in the state constitution. The ban, which voters approved in a 2006 referendum, has been defunct since the Supreme Court legalized those unions nationwide in 2015, but would become operative again if the court were to reverse itself.
Senate Democrats, meanwhile, killed measures that Youngkin sought on transgender issues. Those include a bill that would have required K-12 school staff to obtain permission from parents before using a new name or pronoun to refer to a minor student experiencing “gender incongruence.”
New workforce training department. Lawmakers granted one of Youngkin’s priorities by voting to create a new Department of Workforce Development and Advancement, which would consolidate programs from across a constellation of state agencies and departments. The goal is to provide a more comprehensive approach to workforce training around the state, with the Secretary of Labor tasked with conducting a review of statewide workforce development programs. The new department will take over the administration of adult education programs from the state Department of Education and from local school boards.
Jury duty. In a move meant to take the edge off getting summoned for jury duty, the legislature passed House Bill 2317, which ups the daily allowance from $30 to $50.
Sexual harassment in the workplace. Both chambers approved House Bill 1895, sponsored by Del. Eileen Filler-Corn (D-Fairfax), which prohibits employers from using nondisclosure agreements or nondisparagement clauses in contracts to prevent people from speaking up about sexual harassment. Filler-Corn had intended to include discrimination, as well, but Republicans balked at that language. “It’s not what we wanted it to be, but it’s a step in the right direction,” Filler-Corn said.
Solitary confinement. Both chambers voted for bills aimed at ending the use of solitary confinement in state prisons. Some advocates complained that the measures, which passed on Saturday, were watered down and did not truly prohibit the practice because they lack a 15-day limit on how long an inmate can be confined in solitary conditions. But supporters said the legislation imposes restrictions that effectively end the use of punitive solitary confinement, such as requiring certification that an inmate is being isolated to prevent them from being harmed by others or themselves, requiring at least four hours outside the cell every day and requiring regular reports on why an inmate is being confined.
This article has been updated to include what Dominion said it sought in terms of profit margin.
correction
A previous version of this article incorrectly reported that the Senate had balked at the inclusion of discrimination in a bill Del. Eileen Filler-Corn (D-Fairfax) had sponsored that prohibits employers from using nondisclosure agreements or nondisparagement clauses to prevent people from speaking up about sexual harassment. It was Republicans who had objected to the language. Also, the name of Del. Michael P. Mullin (D-Newport News) was misspelled. This version has been corrected.