Youngkin Unveils Final Virginia Budget With Tax Cuts, Teacher Bonuses

Overview

• The proposal delivers $730 million in near-term tax relief and conforms to federal changes by ending state taxes on tips, overtime pay and certain auto-loan interest.
• Spending increases include $2.6 billion more for Medicaid over the biennium and $544 million in new general fund support for K–12 schools.
• Teachers and state employees would receive a one-time 2% bonus this fiscal year, with 2% raises proposed in each year of the two-year budget.
• Nearly $2 billion is authorized for capital projects and maintenance, financed with a mix of cash and bonds supported by Virginia’s AAA credit rating.
• The administration uses a roughly 3% revenue growth forecast despite collections running 5.2% ahead through November, as Democratic leaders question structural balance and vow major changes.