Youngkin backs more tax cuts but Democrats say underfunded services need money first

RICHMOND, Va. (WRIC) – Gov. Glenn Youngkin (R) and his administration presented a rosy outlook for Virginia’s economy on Wednesday, telling lawmakers the last fiscal year ended with a $1.2 billion revenue surplus and job growth has beat back recession concerns.

Virginia’s strong economic forecast and surplus clears the way for more tax cuts and investments in shared priorities, Youngkin told the General Assembly’s money committees.

“If we continue on our current path, Virginia will continue to accelerate. If we don’t, Virginia will fall behind, again,” Youngkin said Wednesday.

The surplus for fiscal year 2024 will fully fund investments in the latest state budget that lawmakers and Youngkin’s administration reached a deal on earlier this year, the governor said.

This includes $175 million to improve Interstate 81, $400 million to reduce pollutants and $90 million for the recently restored Virginia Military Survivors and Dependents Education Program

“Our ‘Both/And’ gameplan of tax relief and record investment in critical areas works and we must keep going,” Youngkin said, arguing that the surplus shows Virginians are overtaxed.

State Democrats, who Youngkin must work with as they control the legislature, celebrated the strong economic numbers and growth and took credit for the results.

“With a record-low unemployment rate, substantial budget surpluses and rapid job growth, it is clear that the Democratic-led initiatives have propelled Virginia to new heights,” Virginia Senate Democrats said in a statement.

The caucus pushed back on Youngkin’s claims that Virginians are overtaxed, arguing that too many essential programs are underfunded and saying that tax rebates are “off the table” until other issues are resolved.

“Although the Governor may view our financial surplus as an indication of over-taxation, it’s crucial to recognize that a true surplus cannot exist alongside underfunded essential systems,” Virginia Senate Democrats said in their statement.

“Our K-12 education system, higher education, natural resources, mental health and our safety net continue to be underfunded by billions of dollars, and we must continue to prioritize investments into those programs. Until we resolve the backlog of issues caused by this chronic underfunding, additional tax rebates are simply off the table,” they continued.

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