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Virginia’s House and Senate pass competing state budget plans

Virginia state Sen. Janet D. Howell (D-Fairfax) in 2019.
Virginia state Sen. Janet D. Howell (D-Fairfax) in 2019. (Bill O'Leary/The Washington Post)

RICHMOND — The state House and Senate on Friday passed competing budget plans that reflect Virginia's ongoing battle with a pandemic but boast better-than-expected tax revenue and the promise of federal help.

Both chambers call for pouring tens of millions into summer school and other forms of remediation intended to make up for lost learning time over the past year as many K-12 public schools have been shuttered, offering only online learning.

The budget bills also would fund low-cost business loans, housing aid and utility relief — financial lifelines for small businesses and individuals bearing the brunt of the crisis.

But with state revenue exceeding the dire projections made when the coronavirus first gripped Virginia, the House and Senate also found ways to boost pay for teachers, correctional workers, state employees and home health-care aides.

“While we faced a national crisis, Virginia has been unique in that our revenues have remained positive and we’ve been able to meet our central needs,” said Del. Luke E. Torian (D-Prince William), chairman of the House Appropriations Committee. “My concern is that the true storm will arrive next year when federal funds have been diminished.”

While the two chambers will have to work out many differences before the bills can advance to the desk of Gov. Ralph Northam (D), the result is likely to be a spending plan that is more flush than anyone imagined even as recently two months ago.

In early December, when it was unclear whether the federal government could agree on coronavirus relief funds, Northam proposed a budget plan that set aside $90 million in state general funds for coronavirus vaccine doses. Since then, Congress and President Donald Trump approved more federal relief funds, allowing the state House and Senate to bankroll all or most of its vaccine with federal money — and use the state revenue elsewhere.

“Virginia legislators’ and the governor’s approach in the spring was to be extremely cautious because they didn’t know where things were going,” said Laura Goren, research director for the Commonwealth Institute for Fiscal Analysis, a Richmond think tank that has analyzed all three budget plans. “Virginia’s economy, in part because of our dependence on federal spending, has not been hit as hard as some folks feared. So tax revenue certainly kept up better than expected.”

Both chambers passed their plans on bipartisan votes, 68 to 30 in the House and 31 to 8 in the Senate. There was little debate, aside from a flare-up in the House related to the proposed elimination of the death penalty, noted in the budget because the policy change is projected to save the state money. In the upper chamber, Sen. Amanda F. Chase (R-Chesterfield) spoke against spending $50,000 to plan an otherwise privately funded memorial on state property to the Yvonne Miller, the first Black woman elected to Virginia’s legislature. No one else objected.

Chase said Virginia, which took down many Confederate statues last year, needs a “cooling-off period” before it starts erecting new monuments.

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After the vote, House Minority Leader Todd Gilbert (R-Shenandoah) said in a statement: “There are some laudable elements of this budget. But it falls woefully short of meeting our most pressing need — getting our K-12 kids back up to speed.”

Gilbert introduced a floor amendment that called for public schools to offer an in-person instruction option for the 2021-2022 school year. It was set aside on a party-line vote, with Democrats promising to tackle that issue in legislation coming over the next few weeks. A week ago, Northam called on all schools in the state to offer some form of in-person learning by March 15.

Tucked in the Senate version is language requiring that all schools offer in-person instruction by July 1. Northam’s budget and the House’s do not include that provision, which Sen. Chap Petersen (D-Fairfax City) said the Senate will insist on.

“In order to have a budget, the House is going to have to agree to our terms,” Petersen said. “I’m not leaving Richmond without a mandate to reopen schools.”

The Senate version lines up with Northam’s plan to give an additional $514 million to support K-12 schools, which have been struggling with remote learning, loss of students and other expenses related to the virus.

Even temporary drops in enrollment could cost school systems money under state funding formulas, but Northam promised to keep districts whole. The Senate’s plan follows that approach. But the House would reduce state support for that “no loss” protection to $400 million, using federal dollars and $30 million in anticipated gambling revenue to partially cover the cost.

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Early last year, the General Assembly passed and Northam signed a two-year, $135 billion state budget. They would typically make adjustments a year later to reflect adjusted revenue forecasts.

But the economic shock brought on by the pandemic forced them to revamp the budget almost immediately upon passage, with Northam freezing new spending and calling the House and Senate into a special session to amend the budget that stretched from summer through fall.

Northam restored some of that frozen funding in the budget he proposed in December. The House and Senate budgets passed Friday are amendments to his budget bill.

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“This is just an important milestone in what is a long process,” said Sen. Janet D. Howell (D-Fairfax), chairwoman of the Senate Finance Committee. “We have miles to go before the budget is finalized.”

The House includes $81 million for summer school and other forms of K-12 remediation, while the Senate includes $30 million.

The House and Senate offer more-generous pay to teachers and school staffers than Northam, who had provided $80 million for the state’s share of a one-time 2 percent bonus. The House provides $231 million for a 5 percent raise, while the Senate budgets $140 million for a 3 percent raise.

The House and Senate plans also give bigger pay hikes to state workers, state-supported local employees and adjunct faculty members at state colleges. The governor calls for spending $98 million to cover a one-time $1,500 bonus for most state employees, a $750 bonus for adjunct faculty and a 1.5 percent bonus for state-supported local employees. The House plan would give them all a 3.5 percent raise and the Senate a 3 percent raise.

The House plan includes $7.5 million to give correctional workers a one-time $1,000 bonus, something not included in the Senate’s budget or Northam’s.

In higher education, the House and Senate agree with Northam’s plan to restore $36 million to his “G3” initiative to waive community college tuition for people seeking job training in high-demand fields. The Senate version adds an extra $5 million for outreach efforts.

Like the governor’s plan, the House and Senate restore $30 million in need-based financial aid for in-state college students. The House and Senate tap millions in federal funding for colleges and universities to conduct coronavirus testing, something that was not available when Northam issued his budget plan. The House plan includes $35 million in federal funding and Senate includes $17 million.

The Senate, like Northam, would make a $650 million deposit into the state’s reserve of cash to bring rainy-day accounts up to about 8 percent of the overall budget, a historically high level aimed at protecting Virginia’s prized AAA bond rating. The House plan would go further, with a $780 million deposit.

In health care, the House includes $37 million and the Senate $67 million to boost wages for home health-care providers. Northam’s plan does not raise their pay. The House includes $3.4 million to provide home health-care workers with paid sick leave, something the Senate and Northam do not fund.

Like Northam, the House and Senate budgeted for various historical justice projects, such as memorializing the slave trade in Richmond, redesigning the city’s Monument Avenue now that Confederate statues are gone or coming down, and commemorating a historic Black cemetery in D.C. that had its headstones dumped on property in Virginia. The House included $15 million for those efforts and the Senate $11 million, while Northam budgeted $25 million.

The House and Senate plans both include funds for a multiyear effort to legalize recreational marijuana, including the cost to oversee the industry and expunge records of certain marijuana-related convictions. The House sets aside $20 million for that while the Senate budgeted $35 million. Northam had budgeted $25 million.

Correction: An earlier version of this story misstated the status of most K-12 schooling for the past year in Virginia. Most schools have offered only online learning.