The Republican-led Virginia House of Delegates on Thursday passed a budget bill that includes balanced budget amendments and strips away funding in the governor's spending proposal that would require increased revenue from an inadvertent tax increase.
House Democrats and Democratic Gov. Ralph Northam are calling for more spending and tax revenue.
“With the passage of this budget, the House has once again showed our commitment to being fiscally responsible by balancing the budget without the proposed tax increase,” Speaker Kirk Cox, R-Colonial Heights, said in a news release. “I once again want to thank Chairman Chris Jones, Vice Chairman Steve Landes, and the Committee members for their great work.”
The bill comes as a response to Northam’s budget plan, which includes additional spending paid for by an inadvertent $1.2 billion tax increase caused by federal tax changes in the Tax Cuts and Jobs Act. On Tuesday, House Republicans passed a measure that changed the state’s tax code to avoid the tax increase; Democrats also opposed this.
Despite gutting several of Northam’s initiatives that would have required higher taxes, the budget bill passed Thursday would increase investments in public and higher education, school safety and economic development.
It also funds a five percent teacher pay raise that Republicans promised last week and diverts millions of dollars into school safety programs that will include more school resource officers and safety training. For higher education, the bill increases spending for tuition assistance and incentivizations for private colleges to keep tuition flat. Higher education will receive, in total, $54 million in additional revenue.
The economic development initiatives include funding for the Tech Talent Pipeline, which was part of the Amazon HQ2 deal. The pipeline is meant to create 25,000 new computer science degrees within the next 10 years with the intention of funneling some of those jobs into the new Amazon headquarters in Arlington. The Workforce Credential Grant Program would also receive an additional $12 million annually and increase broadband funding by $24 million.
“This budget shows our focus on making higher education more affordable by encouraging schools not to raise tuitions and offers more opportunities for students to receive grant money,” Higher Education Subcommittee Chairman Nick Rush, R-Montgomery, said in a news release.
Additionally, the budget eliminated unfunded liabilities and would save $729 million over the next 25 years.
House Democrats accused Republicans of prioritizing tax cuts for the wealthy over other additional spending measures. Republicans have said that preventing the tax increase will mostly help middle-class Virginians.
“The tax policy passed by this House doesn’t care about those who make under $50,000,” Delegate Vivian Watts, D-Fairfax, said in a news release.
Virginia House Democrats said that Republicans have doubled down on the “Trump tax scheme” outlined in the Republican-backed Tax Cuts and Jobs Act of 2017.
House Democrats claimed that Republicans think Trump-style tax cuts are more important than affordable housing measures, preschool funding, retirement funding, civil defense housing attorneys, environmental protection and many other investments, which were gutted from the governor’s proposed bill.
The bill will now head to the Senate, which has a slight Republican majority and if passed will head to the Democratic governor, who has stated that he wants additional spending increases and the additional tax revenue that Republicans are opposing.