Virginia Capitol Connections Summer 2022

Virginia Capitol Connections, Summer 2022 8 Virginia’s strong financial management By SENATOR JANET D. HOWELL In Virginia, we have a tradition of strong financial management and that includes the budget. Each Session and budget development process is different and unique. When I discussed the conference report on the floor of the Senate, I spoke of the old adage that “good things come to those who wait”. And, while it took longer than normal, the final budget represented true compromise and embodied collaboration. What sets Virginia apart is that our politicians can bridge the divide between parties without the need to be confrontational. Chairman Knight was a skilled advocate for the House positions but together we managed to navigate the differences in a respectful manner. The budget and funding that resulted embodied Senate priorities in the areas of K-12, higher education, health and human resources, housing, and employee compensation. And, while the Senate budget did include significant tax relief, the final budget expanded on this relief to allocate over $4 billion for tax policy changes. This relief should assist our citizens at a time when we are seeing significant cost of living increases. The final budget was a balanced approach—it did not just include changes to the standard deduction and savings for military retirees, but it also included a partially refundable earned income tax credit and the elimination of the state sales tax on groceries. And, I want to point out that all of this was achieved while still maintaining structural balance and strong financial management. All of those items deserve funding and focus; however, the one area that I want to highlight in this column is that of mental health. A number of articles have illustrated the great needs in this area and the struggles that we have experienced in staffing both our state facilities and community services. Here is a prime example of where funding makes a difference for our citizens and that difference comes at some of their most desperate moments. For that reason, this budget continues the efforts of the General Assembly to invest in the continued development of a robust community-based system of care for those Virginians suffering with mental illness. We approved just over $141 million in additional funds over the twoyear period for a variety of services. The largest item in this funding is $34 million to expand permanent supportive housing to assist individuals with serious mental illness. This investment will bring the total number of individuals supported to well over 3,000. Providing stable housing and supportive services to those with serious mental illness is critical because it reduces their emergency room visits and interactions with the criminal justice system. Additionally, there is $50.5 million allocated for STEP-VA, a key initiative to provide a continuum of services across the Community Services Boards. This additional allocation fully funds these services and is a significant step toward a robust system of community-care. There is another $37.5 million to support the crisis system. This includes funding for mobile crisis teams and the conversion of crisis assessment centers into crisis receiving centers, which will further alleviate law enforcement from having to sit with individuals waiting for a psychiatric bed per a temporary detention order, a complication highlighted repeatedly in the press and a change requested by our localities. This funding also supports additional regional grants for the implementation of Marcus alert systems to improve emergency responses for individuals in a mental health crisis. Crafting a good budget By DELEGATE BARRY D. KNIGHT Senator Howell and I got along very well and we were very deliberative to craft a good budget for Virginia. The Budget is the most important piece of legislation that the Virginia General Assembly votes on. We have completed our work and have come up with a budget of over $165 billion that contains no tax increases, no fee increases, and no new general fund supported debt. We did savings first, as this budget maintains Virginia’s fiscal responsibility by increasing the rainy day fund deposit by $1.1 billion, bringing the reserve fund to $3.9 billion—a record level that protects our AAA bond rating. We also made sure to address much needed capital projects with cash for debt. This budget delivers almost $4 billion in tax relief to hard-working Virginians and increases the standard deduction from Virginia’s income taxes, with a sunset in 2026 — going from $4,500 to $8,000 for single filers and from $9,000 to $16,000 for joint filers, or roughly $450 for a family of four. In addition, we made large payments, $750 million, to the Virginia Retirement System, with an extra $250 million if revenues continue to grow. We also tackled one-time spending directed at Virginia’s employers unemployment insurance taxes, as they will not go up, with the budget replenishing the unemployment trust fund. We also made funds available to realize the completion of the widening of Interstate 64 from Richmond to Hampton Roads, with a total of $470 million set aside. Furthermore, the budget includes $1 billion in general fund and non-general fund money for projects at the Port of Virginia that will help address supply chain issues by increasing capacity. Virginia’s teachers and our other greatly valued state employees will receive substantial pay raises of 5 percent each year, as well as a $1,000 bonus. Starting salaries for our corrections officers, sheriff’s deputies, and state police have been substantially increased more than the 5 percent with compression adjustments for our more senior staff. For K-12 education, this budget contains its largest investment ever by boosting education spending to record levels, an additional $3.2 billion in direct aid, exceeding the levels before the Great Recession. Additionally, through a combination of grants and loans, this budget will fund more than $3 billion in school construction and renovation, and school divisions will receive $145 million over the biennium for at-risk students. An additional $10 million will be allocated to ensure every elementary school has a full-time principal. Higher education is very important to retaining a modern workforce. This budget makes major investments in affordability for students in our colleges and universities. General fund support for public colleges and universities will increase by $253.5 million in FY 2023 and $360.8 million in FY 2024 over the 2022 base budget. Funding to support affordability and access will increase by $158.9 million in FY 2023 and $160.5 million in FY 2024. To address concerns of affordability, this budget limits tuition and fee increases to no more than 3 percent, with financial aid, primarily for undergraduate students, increasing by $29.2 million in FY 2023 and $141.2 million in FY 2024. With public safety and violence prevention efforts having been at the forefront of Virginia’s political discussion for years, this budget authorizes $19.1 million the first year and $27.9 million the second year in support of local police in the form of “599” funding. The budget includes $13 million for violence prevention grants, including: $8 million for the Firearm Violence Intervention and Prevention Grant Fund, $5 million for the Operation Ceasefire Grant Fund, and another $45 million is included for the School Continued on next page Continued on next page