Virginia budget includes plans for Hampton Roads: Toll relief funding, gun violence prevention and more

Legislators released the details of a two-year state budget plan Saturday that would nix a potential new tax on digital goods while still providing large investments in education.

After months of conflict, House Appropriations Committee Chair Luke Torian announced Thursday that budget negotiators had struck a deal with Republican Gov. Glenn Youngkin that left Democrats’ spending priorities intact despite killing off the digital tax — which the governor opposed — that was expected to bring in more than $700 million for the state.

“It looks like it’s a true compromise to me,” said Del. Barry Knight, a Virginia Beach Republican and former budget committee chair.

Knight explained legislators ended up having more money than expected.

“They were very conservative on their revenue forecast and now revenues have gone up so there’s extra money there,” Knight said. “Then when the governor vetoed some bills, like the minimum wage bill, that saved $80 million, and there were other bills that he vetoed that also saved money.”

State revenue collections are anticipated to exceed the current forecast by as much as $1.2 billion, and the spending plan would carry forward $525 million in tax withholding revenue from this year into fiscal 2025. The governor’s amended and vetoed legislation also freed up about $116 million, according to an analysis from the House Appropriations Committee.

Knight said the current plan also allocates less money for Medicaid reserves.

Democrats are pleased with the proposal, according to Del. Shelly Simmonds, a Newport News Democrat and vice chair of the House Education Committee.

“There is still historic funding for education, from pre-k through college,” she wrote to The Virginian-Pilot. “We’re very happy with this outcome and proud of what we were able to do.”

Income and sales tax changes, brought up initially by Youngkin at the outset of the budget process, were not included. But it does direct the creation of a General Assembly subcommittee to review the state’s tax system, including tax brackets, rates, credits, deductions and exemptions “as well as any other factors it deems relevant to making Virginia’s individual income tax system more fair and equitable.”

The General Assembly will reconvene for a special session Monday to discuss and vote on the $188 billion plan.

From funding for toll relief to the Norfolk Coastal Risk Storm Management Project, here are a few notable provisions in the latest proposal with ties to Hampton Roads.

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Toll relief

Toll relief, identified by Senate Finance and Appropriations Committee Chair Louise Lucas as a top priority, would receive $77 million in the first year and $24 million in the second. Eligible drivers would earn less than $50,000 annually and reside in a planning district with at least three tolled bridges or tunnels.

Norfolk and Portsmouth drivers have paid millions in toll fees since 2011 due to a private-public partnership deal between Elizabeth River Crossings, which owns and operates the tunnels, and the Virginia Department of Transportation.

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Norfolk Coastal Risk Storm Management

The plan allots $25 million to support the Norfolk Coastal Risk Storm Management Project. It’s less than Norfolk officials had hoped for, and city planners adjusted their own budget proposal as a result. But city leaders have said the reduction will not affect the immediate next phase of the project.

Norfolk is a hot spot for flooding and sea level rise. The project includes the construction of an 8-mile-long floodwall around downtown, as well as home elevation projects and various efforts to restore natural flood barriers. It comes with a $2.6 billion price tag, to be split among federal, state and local authorities.

When the Senate and House each unveiled their respective budget proposals this year, the latter had designated far more money — about $74 million — to support the project.

But Norfolk Mayor Kenny Alexander said he isn’t disappointed.

“We remain grateful and we will continue to work with the state on the nonfederal match,” he said. “This is not just a one-and-done deal; this is a process. I have been assured by members of the money committees in the state that it will continue to be funded (in later years).”

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Community Flood Preparedness Fund

The budget provides $100 million for the Virginia Community Flood Preparedness Fund, which awards grants to help communities prepare for flooding and climate change.

The fund needs a new source of revenue, as it used to receive steady funding from the Regional Greenhouse Gas Initiative.

RGGI is a multi-state effort that pushes a shift to renewable energy by requiring energy producers to buy allowances for each metric ton of carbon they produce. In Virginia, about half of the money it raised went toward the flood preparedness fund. But at the behest of Youngkin, a state board voted in June to withdraw from the program.

Some RGGI advocates hoped the budget would include a provision directing the state to rejoin. But the final budget proposal does not include that language.

The plan further allots $1.5 million to James City County for Preservation Virginia and its subsidy — the Jamestown Rediscovery Foundation — to support studies, schematic designs and and archaeology efforts needed to implement flood protection measures at Jamestown.

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Skill games

Skill games, which have many supporters in Hampton Roads, were not addressed in the proposal.

The governor massively amended a bill that would tax and legalize the slot machine-like devices. His amendments would ultimately ban the games across large swaths of the commonwealth. Advocates hoped the issue might be addressed in the budget, which can sometimes be used to resurrect legislation that has otherwise been killed off or changed.

While that language wasn’t include in the plan, this isn’t the end of the debate. The statehouse rejected Youngkin’s amendments and sent the bill back to his desk, meaning he could still approve the legislation.

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Gun violence prevention

The proposal provides $18 million total for the Firearm Violence Intervention and Prevention Fund, which supports localities, hospitals and community-based organizations working to reduce gun violence and suicides.

It states at least $1.5 million annually will be provided to cities with disproportionate firearm-related homicides, including at least $500,000 and $1 million for Portsmouth and Norfolk, respectively, in the first year.

Katie King, katie.king@virginiamedia.com