Governor Proposes More than 200 Amendments to Budget

Governor Youngkin announced on Monday that he was proposing significant revisions to the state budget as passed by the General Assembly in February.  At a press conference Monday afternoon, the Governor explained that he offered 205 amendments to the budget and submitted eight line-item vetoes.

In his remarks Monday, the Governor highlighted job growth, business investment, and population growth as areas of economic strength for Virginia, and evinced confidence that state revenues would meet the projections underpinning the biennium budget.  Through February, general fund revenues are slightly ahead of the revenue forecast, outpacing projections by $187.2 million, or 1 percent.  However, the Governor acknowledged that actions at the federal level could create “near-term uncertainty.”  He noted that both the state House and Senate have established special committees to review and respond to these actions, and explained that his budget proposals are intended to mitigate any unexpected reductions in state general fund revenues by redirecting an additional $300 million to the state’s reserves, on top of the $294.5 deposit included in the budget approved by the legislature.  To that end, the Governor proposes a series of reductions in spending items included in the budget as passed by the General Assembly, in addition to several proposed spending increases on the Governor’s priorities.

Several actions proposed by the Governor are of particular importance to local governments:

• The Governor proposes to reduce funding allocated by the General Assembly to functionally eliminate the cap on recognition of support positions, VACo’s top funding priority for the 2025 Session. The Governor’s amendments would fund a staffing ratio of 25.50 support positions per 1,000 students – an increase over the FY 2025 ratio of 24 positions per 1,000 students, but a reduction from the enrolled budget’s ratio of 27.89 positions per 1,000 students.  VACo strongly supports full elimination of the cap and has encouraged the legislature to maintain the funding level approved by the General Assembly.
• The Governor vetoed the budget item containing $431.2 million in bond authorization for wastewater projects over the biennium, proposing a separate amendment designating $431.2 million in excess FY 2025 revenues, after any required Revenue Stabilization Fund deposit, for this purpose. This funding is essential to ensuring that projects previously approved for a state cost share can proceed as agreed upon; VACo is working to understand the effect of the proposed veto.
• The Governor proposes to eliminate the current cap of 0.5000 on the Local Composite Index for the Virginia Preschool Initiative, effective July 1, 2025. This proposal, which was also included in the Governor’s introduced budget in December 2023, but not adopted by the legislature in 2024, and proposed in his December 2024 budget and rejected by the 2025 General Assembly, would mean that the local share would increase for this program for localities with LCIs above 0.5000.  VACo has historically opposed this proposal.
• The Governor vetoed the item authorizing $40 million in bond proceeds in FY 2025 for the Stormwater Local Assistance Fund (SLAF). VACo has historically supported funding for SLAF.

The General Assembly will consider the Governor’s budget amendments, as well as the Governor’s amendments to 159 other bills and 157 bill vetoes, at its April 2 reconvened session.  Amendments to the budget must be approved by a majority vote in both chambers; overriding a veto requires a two-thirds majority of members present.  If the legislature does not approve of some or all of the Governor’s amendments, the budget bill is returned to the Governor for final action; the Governor then has 30 days to sign or veto the bill, to exercise his authority to veto individual items, or to take no action and allow it to become law without his signature.

Following is an overview of the Governor’s amendments that are of interest to local government.  A full listing of the Governor’s budget amendments and vetoes is available at this link.

K-12 Education: Support Cap

• As passed by the General Assembly (enrolled bill): Functionally eliminates the cap on recognition of support positions by providing $222.9 million in FY 2026 to fund positions at a ratio that corresponds with prevailing local practice.  This action has been long sought by VACo and its advocacy partners and addresses VACo’s top budget priority for this session.
  • Governor’s amendments: Reduces funding by $138.2 million; funds a staffing ratio of 25.50 support positions per 1,000 students (an increase over the FY 2025 ratio of 24 positions per 1,000 students, but a reduction from the enrolled budget’s ratio of 27.89 positions per 1,000 students). (Amendment 56)

K-12 Education: Special Education

• As passed by the General Assembly (enrolled bill): Provides $52.8 million in FY 2026 as an add-on to basic aid for students receiving special education.
  • Governor’s amendments: No change.

K-12 Education: School Capital

• As passed by the General Assembly (enrolled bill): Removes the proposed transfer of $150 million from the Literary Fund to the School Construction Fund in FY 2025 that was included in the introduced budget; provides an additional $10 million in FY 2026 from expected casino revenues, for a total of $310 million for School Construction Assistance Grants over the biennium.  Replaces an additional $25 million from the General Fund with Literary Fund revenues for teacher retirement costs.  Does not include provisions of proposed legislation allowing an additional 1 percent local option sales and use tax for school capital needs.
  • Governor’s amendments: Deposits an additional $50 million in FY 2025 from the Literary Fund into the School Construction Fund.  (Amendment 55)

K-12 Education: School-Based Mental Health

• As passed by the General Assembly (enrolled bill): Revises language regarding the existing $15 million per year provided for school-based health clinics.  The introduced budget proposed to allow funds to be used to provide technical assistance to school divisions seeking guidance on integrating mental health services and grants to school divisions to contract for community-based mental health services from public or private community-based providers.  The General Assembly removed this language and instead allows funds to be used for school districts to contract with a telehealth provider and adds mobile clinics as an allowable use of funds.
  • Governor’s amendments: Reinstates language allowing the funding to be used to provide grants to school divisions to contract for community-based mental health services from public or private community-based providers; removes language allowing use of funds for clinics to serve students’ families and school staff.  (Amendment 114)

K-12: Additional Items

• As passed by the General Assembly (enrolled bill): Eliminates the $50 million proposed in the introduced budget in FY 2025 for infrastructure, technical training, and evidence-based supports for schools identified as needing intensive support or “off-track” under the Board of Education’s School Performance and Support Framework.  Also eliminates the $250,000 in FY 2025 and $1 million in FY 2026 proposed for regional support specialists to assist divisions with multiple schools identified as “off track” and needing intensive support; instead directs the Department of Education to maintain at least 30 full-time employees in the Office of School Quality to support schools and school divisions not meeting state benchmarks, of which at least six are to be deployed as regional support specialists focused on academic improvement in math, literacy, and science.
  • Governor’s amendments: Proposes $25 million for this purpose.  Eliminates the language requiring certain staffing levels in the Office of School Quality.  (Amendment 45 and Amendment 46)

• As passed by the General Assembly (enrolled bill): Includes $11 million in FY 2025 and $1 million in FY 2026 for improvements to mathematics instruction.
  • Governor’s amendments: Revises the proposed uses of grant funding to be provided to school divisions under the initiative, the directives to the Department of Education on administering the initiative, and the composition of the Mathematics Advisory Task Forces established as part of the initiative.  (Amendment 43)

• As passed by the General Assembly (enrolled bill): Retains a series of technical amendments included in the introduced budget that capture updates in average daily membership, categorical and incentive program costs, English language learner data, Lottery proceeds, participation in certain programs, and sales tax distribution.  Also captures technical updates to the early reading intervention program and the school breakfast program, and recognizes an additional $24 million in Lottery proceeds in FY 2026 (freeing up a like amount of General Funds).
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Eliminates the $50 million proposed in the introduced budget for the Virginia Opportunity Scholarship Program, which would provide grant awards for qualified students to support certain expenses of attending an accredited private school in the Commonwealth.
  • Governor’s amendments: Includes $25 million for this purpose.  (Amendment 58)

• As passed by the General Assembly (enrolled bill): Eliminates the introduced budget’s proposed deposit of $25 million in FY 2025 to the College Partnership Laboratory School Fund for the design, launch, and operation of college partnership laboratory schools established by a Historically Black College or University in Virginia.
  • Governor’s amendments: Proposes a $10 million deposit to the College Partnership Laboratory School Fund in FY 2025. (Amendment 57)

• As passed by the General Assembly (enrolled bill): Provides $1 million in FY 2025 to support public engagement, facilitation and technical support for the Joint Subcommittee to Study Elementary and Secondary Funding; this funding is redirected from the Governor’s Transformation Office.
  • Governor’s amendments:  Vetoes this item; the Governor notes in his veto message that the General Assembly “has sufficient staffing and cash balances in its current appropriation to support the procurement of additional technical support” to the Joint Subcommittee.

Compensation: Instructional Positions

• As passed by the General Assembly (enrolled bill): Retains the 3 percent salary increase in each year of the biennium included in the 2024 Appropriation Act. In addition, provides $134.4 million in FY 2025 for a one-time bonus payment of $1,000, to be provided no later than June 1, 2025, for funded SOQ instructional positions (defined to include all teacher, guidance counselor, librarian, instructional aide, principal, and assistant principal positions).  No local match is required, and school divisions have the discretion to determine the amount of bonus per employee to maximize the use of these funds to promote retention among instructional and support positions.
  • Governor’s amendments: No change.

Compensation and Retirement: State and State-Supported Local Employees

• As passed by the General Assembly (enrolled bill): Maintains the 3 percent salary increase in each year of the biennium included in the 2024 Appropriation Act.  In addition, provides $83.1 million for a 1.5 percent bonus for state and state-supported local employees; state employee bonuses will be provided June 16, 2025, and the state-supported local employee bonus is effective July 1, 2025; language allows state funds for the bonus payment for state-supported local employees that are provided on a reimbursement basis that are not expended during FY 2025 to be reappropriated.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Reduces the proposed 9.3 percent salary increase included in the introduced budget for Sheriff’s dispatch positions to 6 percent.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Directs the Compensation Board to assess potential options for information to be provided to the General Assembly related to comparable state roles and local salary supplements for employees in constitutional offices, with a report on recommendations due by October 1, 2026.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains the $130,716 in FY 2026 included in the introduced budget for salary increases for certain Constitutional officers due to population increases.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Directs the Department of Human Resource Management (DHRM) to evaluate total compensation, including retirement benefits, for law enforcement officers employed by the Commonwealth and covered under the VaLORS retirement system.  Also directs DHRM and VRS to determine whether the elimination of the traditional VRS defined benefit pension has affected the Commonwealth’s ability to retain and recruit government employees, and directs DHRM to solicit similar assessments from the Department of Education and VRS on the effects on recruitment and retention of teachers.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Includes $1 million in FY 2026 to fund a $2,231 across-the-board salary increase for Department of Juvenile Justice security positions, to help address vacancy rates at the Bon Air Juvenile Correctional Center.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Reduces the $3.3 million included in the introduced budget for salary increases for the Virginia State Police to $2.5 million and directs a report on turnover and vacancy savings.
  • Governor’s amendments: No change.

Public Safety – Withholding of Jail Per Diems or HB 599 Funding

• As passed by the General Assembly (enrolled bill): Strikes language in the introduced budget that provides for withholding of HB 599 funding or jail per diem payments from a locality if an official in charge of a jail does not comply with lawful U.S. Immigration and Customs Enforcement (ICE) detainers and does not provide at least 48 hour pre-release notification to ICE, or if an official in charge of a jail or local law enforcement agency or sheriff’s office prohibits or impedes communication or cooperation with ICE pursuant to adoption of a local ordinance, procedure, policy, or custom.
  • Governor’s amendments: Reinstates this language.  (Amendment 154)

Public Safety – School Resource Officer Incentive Grants Fund

• As passed by the General Assembly (enrolled bill): Removes the increase of $6.8 million in FY 2025 proposed in the introduced budget for the School Resource Officer Incentive Grants Fund.  Designates nongeneral fund balances to be used for digital mapping projects for emergency response and for continuation of previous grants.
  • Governor’s amendments: Provides an additional $5.3 million in FY 2025; removes language regarding use of balances. (Amendment 159)

Public Safety – Public Safety Communications Grants

• As passed by the General Assembly (enrolled bill): Eliminates the $2.5 million proposed in the introduced budget in FY 2025 for competitive grants to localities for the purchase of public safety radio and communications infrastructure equipment.
  • Governor’s amendments: Authorizes use of $2.5 million in disaster mitigation funding for this purpose. (Amendment 161)

Public Safety – Victim Witness Grant Program

• As passed by the General Assembly (enrolled bill): Eliminates the additional $200,000 per year proposed for the Victim Witness Grant Program in the introduced budget and the language earmarking at least $500,000 per year for the Office of the Attorney General; provides an additional $1.5 million in FY 2026.
  • Governor’s amendments: No change.

Public Safety – Sexual Assault and Domestic Violence Agencies

• As passed by the General Assembly (enrolled bill): Provides an additional $2 million in FY 2026.
  • Governor’s amendments: Earmarks $500,000 of this funding for start-up costs for a public-private campus at the YWCA Richmond to serve survivors of domestic violence.  (Amendment 162)

Public Safety – Unmanned Aircraft Replacement

• As passed by the General Assembly (enrolled bill): Provides $1 million in FY 2025 to the Department of Criminal Justice Services to administer and provide grant funding for an Unmanned Aircraft Trade and Replace Program, which would provide funding to local law enforcement agencies, local fire or ambulance service providers, or other local first responders to replace unmanned aircraft systems manufactured by foreign adversaries with systems that meet the criteria in the National Defense Authorization Act of 2024.
  • Governor’s amendments: No change.

Public Safety – Office of First Responder Wellness

• As passed by the General Assembly (enrolled bill): Removes the additional funding proposed for the Office of First Responder Wellness in the introduced budget ($322,218 in FY 2026) and eliminates the proposed expansion of funds to nonprofit organizations that support first responders (in addition to law enforcement).
  • Governor’s amendments: No change.

Public Safety – Fire Programs

• As passed by the General Assembly (enrolled bill): Moves the $5 million proposed in the introduced budget for grants to localities to purchase protective equipment for firefighters from FY 2026 to FY 2025.  Adds language to the provisions of the introduced budget directing the Department of Fire Programs to assess the fees charged by the State Fire Marshal’s office to conduct fire safety inspections and the costs to provide these services to require that this review include a description of which fees, if any, are recommended for an increase based on the market cost and the projected additional fee revenue that would result from such recommended increase.
  • Governor’s amendments: No change.

Administration: Compensation Board – Constitutional Officers

• As passed by the General Assembly (enrolled bill): Provides $5.5 million in FY 2026 for 70 additional Assistant Commonwealth’s Attorney positions, to be distributed in accordance with current staffing standard needs to assist with anticipated workload increases resulting from legislation regarding expungement and sealing of criminal records.  Language requires localities to use such funding to supplement, not supplant, local funds provided for salaries of Commonwealth’s Attorneys and their employees.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Provides $270,970 in FY 2026 to convert the Bath County and Highland County Commonwealth’s Attorneys’ offices to full-time status.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Provides $5.5 million in FY 2026 for 117 Deputy Clerk IV positions to assist with anticipated workload increases resulting from legislation regarding expungement and sealing of criminal records.  Language requires localities to use such funding to supplement, not supplant, local funds provided for salaries of Circuit Court Clerks and their employees.
  • Governor’s amendments: No change.

Administration: Compensation Board – Jails

• As passed by the General Assembly (enrolled bill): Directs the Compensation Board, in conjunction with the Board of Local and Regional Jails, to survey local and regional jails to identify the jail staffing and jail space impacts of making inmates available to appear in virtual court hearings and make potential recommendations for staffing and space needs in local and regional jails to address the identified frequency of virtual hearings requested by the court.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Revises the process by which local and regional jail capital projects are reviewed by the Department of General Services in order to qualify for state reimbursement of up to 25 percent of project costs; requires the review process for projects with costs exceeding $12 million.
  • Governor’s amendments: Modifies this language to require the review process for projects with costs exceeding $1 million.  (Amendment 155)

Administration: Elections

• As passed by the General Assembly (enrolled bill): Retains $500,000 provided in the introduced budget for IT needs at the Department of Elections; reduces the $750,000 provided in the introduced budget for upgrades to planning for replacement of the Committee Electronic Tracking and Campaign Finance Management systems by $500,000, leaving $250,000 for this purpose.
  • Governor’s amendments: No change.

Other Administration

• As passed by the General Assembly (enrolled bill): Retains the additional $1.9 million included in the introduced budget in increased state matching funds for the federal State and Local Cybersecurity Grant Program.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Modifies language in the introduced budget that directs the Virginia Information Technologies Agency and the Virginia Fusion Center to provide a semi-annual confidential briefing to the Joint Subcommittee on Cyber Risk to clarify the purpose of the Joint Subcommittee and the role of JLARC.
  • Governor’s amendments: No change.

Agriculture and Forestry

• As passed by the General Assembly (enrolled bill): Provides $450,000 in FY 2026 for the Large Animal Veterinary Grant Program, to be administered by the State Veterinarian in accordance with legislation passed this session (the introduced budget provided funding in this amount for a loan repayment program to be administered by the Department of Health).
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains the action in the introduced budget to move funding previously appropriated directly to the Blue Catfish Processing, Flash Freezing, and Infrastructure Grant Program to the Governor’s Agriculture and Forestry Industries Development Fund and earmark funding to support the Program; provides an additional $250,000 in FY 2025.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Eliminates the $250,000 proposed in the introduced budget for the Pasture, Rangeland, and Forage Insurance Premium Assistance Fund.
  • Governor’s amendments: No change.

Commerce and Trade – Business Sites

• As passed by the General Assembly (enrolled bill): Provides an additional $20 million in FY 2025 for the Virginia Business Ready Sites Program Fund and eliminates the proposed additional $50 million provided in the introduced budget in FY 2026 (for total funding of $60 million over the biennium).  Allows the Virginia Economic Development Partnership Authority to determine a site of at least 25 contiguous acres to be an eligible site for the Virginia Business Ready Sites Program Fund, provided that the site is located in a locality with an area of 35 square miles of land or fewer.  Provides $15 million in FY 2025 to Pulaski County for specific site readiness projects.
  • Governor’s amendments: Provides an additional $20 million in FY 2026, for total funding of $80 million over the biennium.  Reduces site readiness funding for Pulaski County by $7.5 million.  (Amendment 18, Amendment 29)

Commerce and Trade – Broadband

• As passed by the General Assembly (enrolled bill): Maintains the action in the introduced budget to move $10 million in funding for the Virginia Telecommunication Initiative from FY 2026 to FY 2025 (which would place all funding for the biennium in the first year).  Includes language stating that it is the intent of the General Assembly that the funding provided for the Virginia Telecommunication Initiative be continued in the next biennium.
  • Governor’s amendments: No change.

Commerce and Trade – Housing

• As passed by the General Assembly (enrolled bill): Restores the down-payment assistance pilot program included in the 2024 Appropriation Act that the introduced budget proposed to eliminate (this program is funded through Regional Greenhouse Gas Initiative balances) and directs the Department of Housing and Community Development to implement the program by May 4, 2025.
  • Governor’s amendments: Vetoes this item.

• As passed by the General Assembly (enrolled bill): Restores the pilot program for assistance to tenants and nonprofits to acquire manufactured home parks that was included in the 2024 Appropriation Act and proposed to be eliminated in the introduced budget (this program is funded through Regional Greenhouse Gas Initiative balances) and directs the Department of Housing and Community Development to implement the program by May 4, 2025.
  • Governor’s amendments: Vetoes this item.

• As passed by the General Assembly (enrolled bill): Directs the Department of Housing and Community Development to identify programs designed to keep long-term residents in their primary homes as real property tax liabilities increase.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Provides $15 million in FY 2025 to establish the First-Time Homebuyer Grant Program, which will award grants of up to $10,000 in costs incurred by eligible homebuyers in purchasing direct ownership in residential real property.
  • Governor’s amendments: Eliminates this funding. (Amendment 21)

• As passed by the General Assembly (enrolled bill): Provides $13 million in FY 2025 for grants to localities or planning district commissions that have established or will establish by December 31, 2025, a local Housing Trust Fund for long-term local investments related to affordable housing.  Directs the Department of Housing and Community Development to develop criteria and guidelines for these one-time grants on or before August 1, 2025. Earmarks $5 million of this funding for Prince William County, $1 million for the City of Emporia, and $250,000 for Tazewell County for remediation of blighted properties in the Town of Richlands.
  • Governor’s amendments: Reduces overall funding by $6.5 million; reduces the funding set aside for Prince William County by $2.5 million and the funding for the City of Emporia by $500,000. (Amendment 24)

• As passed by the General Assembly (enrolled bill): Includes $20 million in FY 2025 for a rental assistance pilot program in Planning Districts 8 and 23.
  • Governor’s amendments: Eliminates this funding. (Amendment 22)

• As passed by the General Assembly (enrolled bill): Makes clear that $675,000 in funding for FY 2026 that was included in the 2024 Appropriation Act is to be provided to support the organizational capacity and administrative needs of the Continuum of Care lead agencies in Virginia, with each lead agency intended to receive $25,000 in support.
  • Governor’s amendments: No change.

Commerce and Trade – Disaster Relief

• As passed by the General Assembly (enrolled bill): Eliminates the proposed Disaster Assistance Fund from the introduced budget; instead provides $50 million in FY 2025 for disaster mitigation and Hurricane Helene relief, with $25 million provided to assist residents who lost homes or sustained residential property damage as a result of Hurricane Helene (assistance for commercial property and crop loss would be allowed with funds available after all residential claims were executed), and $25 million to be used for major weather event disaster mitigation, such as improving structures’ ability to withstand hazards.  From this funding, $350,000 would be provided for a pilot emergency management mobile communications platform in southwest Virginia.
  • Governor’s amendments: Modifies use of funds to allow damage from certain February 2025 storms to qualify; allows use for commercial property and crop loss.  Allows the disaster mitigation funding to be used to satisfy match requirements for certain federal, state, and other funding programs.  Allows mitigation funding to be used for disaster relief if claims exceed the $25 million set aside for relief.  Retains the set-aside for the pilot emergency management mobile platform.  Allows $2.5 million of mitigation funding to be used for grants to localities for public safety radio and communications equipment, as discussed above.  (Amendment 20, Amendment 161)

Commerce and Trade – Community Development and Tourism

• As passed by the General Assembly (enrolled bill): Provides $2.5 million in FY 2025 to capitalize the Urban Public-Private Partnership Redevelopment Fund; directs the Department of Housing and Community Development to develop criteria and guidelines for the administration of the grant program.
  • Governor’s amendments: Eliminates this funding.  (Amendment 27)

• As passed by the General Assembly (enrolled bill): Provides $1.5 million in FY 2025 to capitalize the Electric Vehicle Rural Infrastructure Fund.
  • Governor’s amendments: Eliminates this funding.  (Amendment 33)

• As passed by the General Assembly (enrolled bill): Provides $1 million in FY 2025 for the Solar Interconnection Grant Program, which will provide grants to localities to connect solar facilities to the grid.
  • Governor’s amendments: Eliminates this funding.  (Amendment 34)

• As passed by the General Assembly (enrolled bill): Provides $2.5 million in FY 2025 to recapitalize the Community Development Financial Institutions Fund and includes language stipulating use of funds for low-interest loans to qualifying institutions.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains language in the introduced budget clarifying that previously-appropriated funding may be used to demolish derelict structures, perform remediation, and market for sale the Central Virginia Training Center property.
  • Governor’s amendments: No change

• As passed by the General Assembly (enrolled bill): Retains the action in the introduced budget to move the previously-appropriated $2.5 million for the development of an inland port in the Mount Rogers Planning District from FY 2026 to FY 2025.
  • Governor’s amendments: No change

• As passed by the General Assembly (enrolled bill): Retains funding for a natural gas study in Patrick County included in the introduced budget.  Also includes $6.5 million in FY 2025 for a natural gas infrastructure expansion into Accomack County.
  • Governor’s amendments: No change

• As passed by the General Assembly (enrolled bill): Eliminates the additional $35 million proposed in the introduced budget for the Virginia Innovation Partnership Authority for certain life sciences investments. Instead provides $7.5 million to the University of Virginia Medical Center for the improvement of a facility to create advanced laboratory space, $3 million to the Virginia Economic Development Partnership Authority to support a non-profit operating a pharmaceutical manufacturing facility in developing a fast-acting insulin, and $4 million to the City of Roanoke for the improvement of an existing facility to create advanced laboratory space for new cell/gene therapy companies across southwestern Virginia.
  • Governor’s amendments: No change to funding levels in the enrolled budget; includes language allowing balances for certain higher education life sciences initiatives to be carried over and reappropriated at the end of the fiscal year; removes language stating that it is the intent of the General Assembly that funding be continued into the next biennium.  (Amendment 41)

• As passed by the General Assembly (enrolled bill): Reduces the $5 million included in the introduced budget for the Virginia Sports Incentive Grant Program by $2 million; directs the remaining $3 million to be used to support a major sporting event in Prince William County.
  • Governor’s amendments: Provides an additional $500,000; revises budget language such that the new total of $3.5 million is provided to support the Virginia Sports Tourism Grant Program, with $2.5 million set aside for the major sporting event in Prince William County.  (Amendment 39)

• As passed by the General Assembly (enrolled bill): Includes $1.25 million in FY 2025 for a marketing campaign to attract out of state visitors from Black, Indigenous, and Hispanic communities.
  • Governor’s amendments: Reduces funding by $625,000 and redirects funding to the general allocation for tourism promotion.  (Amendment 40)

• As passed by the General Assembly (enrolled bill): Retains the $250,000 in FY 2025 included in the introduced budget to support a visitor center in St. Paul, as well as the $295,000 in FY 2025 for the Spearhead Trails Initiative; also provides $50,000 in FY 2025 for the Blue Highway Festival in Wise County and $125,000 per year for the Schooner Virginia program in the City of Norfolk.
  • Governor’s amendments: No change.

Child Care/Early Childhood

• As passed by the General Assembly (enrolled bill): Reverses the action in the introduced budget to eliminate the existing 0.5000 cap on the Local Composite Index for the Virginia Preschool Initiative; preserves the existing cap.
  • Governor’s amendments: Eliminates the Local Composite Index cap beginning in FY 2026. VACo has historically opposed this proposal.  (Amendment 61)

• As passed by the General Assembly (enrolled bill): Makes the changes to the attendance requirements proposed in the introduced budget subject to review by the Early Childhood Care and Education Commission.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Reduces the maximum copayment proposed in the introduced budget for FY 2026 Child Care Subsidy and Mixed Delivery slots from 7 percent of household income to 5 percent; strikes the language in the introduced budget that would bar the enrollment of additional school-age children in the Child Care Subsidy Program after July 1 (other than in specified circumstances).

• Governor’s amendments: Reinstates proposed maximum copayment of 7 percent of household income; reinstates proposal to bar the enrollment of additional school-age children in the Child Care Subsidy Program after July 1 (other than in specified circumstances). (Amendment 61)

• As passed by the General Assembly (enrolled bill): Revises the language in the introduced budget dealing with out-of-school time learning and extracurricular programs to require the Early Childhood Care and Education Commission to review adjustments to Child Care Subsidy Program reimbursement rates for school age children and the appropriateness of continuing to provide services through the Program to school age children, to include an update on the current structure of publicly-funded out-of-school time learning and extracurricular programs and approaches to maximize state and federal resources by adjusting income eligibility requirements to reflect regional costs of living variations.
  • Governor’s amendments: Slightly revises study language to address the appropriateness of resuming (rather than continuing) enrollment of school-age children in the Child Care Subsidy Program. (Amendment 61)

• As passed by the General Assembly (enrolled bill): Provides $25 million in FY 2025 to establish and operate the Employee Child Care Assistance Pilot Program.
  • Governor’s amendments: Eliminates this funding.  (Amendment 61)

• As passed by the General Assembly (enrolled bill): Eliminates the $15 million proposed in the introduced budget for an early learning capital supply building fund.
  • Governor’s amendments: No change.

Workforce development

• As passed by the General Assembly (enrolled bill): Eliminates the proposed $15 million in the introduced budget for the new College and Career Ready Virginia program.
  • Governor’s amendments: Transfers $20 million from balances in the G3 program to the College and Career Ready Virginia program.  Includes language stipulating that the College and Career Ready Virginia Fund shall include support for high school students to complete noncredit workforce training and credentialing through training programs eligible for the New Economy Workforce Credential Grant Program.  Provides that unexpended General Fund appropriations for the G3 program at the end of each fiscal year are to be reappropriated to meet demand in the G3 program or to support the College and Career Ready Virginia Fund.  (Amendment 78 and Amendment 77)

• As passed by the General Assembly (enrolled bill): Transfers $15 million from balances in the G3 program to the New Economy Workforce Credential Grant Program in FY 2025; reduces the additional General Fund appropriation proposed in the introduced budget for the New Economy Workforce Credential Grant Program by $3.5 million in FY 2026.
  • Governor’s amendments: Provides an additional $2.5 million in FY 2026 to the New Economy Workforce Credential Program. (Amendment 66)

• As passed by the General Assembly (enrolled bill): Eliminates the $2.1 million in FY 2025 included in the introduced budget for the Virginia Has Jobs Initiative (a new workforce portal designed to connect potential applicants with available employment and training opportunities).  Instead sets aside up to $500,000 from funds provided for higher education internships to support the development and deployment of the Virginia Has Jobs portal for higher education related internships, with the transfer to the Department of Workforce Development and Advancement for this purpose to be coordinated and approved by the Board of the Virginia Economic Development Partnership.
  • Governor’s amendments: Provides an additional $480,000 for the Virginia Has Jobs portal in FY 2025.  Includes the $500,000 for the portal proposed in the enrolled budget as part of Governor’s proposed transfer of internship program funding and administration to the Department of Workforce Development and Advancement. (Amendment 133 and Amendment 134)

Aid to Local Public Libraries

• As passed by the General Assembly (enrolled bill): Provides $632,142 in FY 2026 in additional state aid to local libraries.
  • Governor’s amendments: No change.

HHR – Children’s Services Act

• As passed by the General Assembly (enrolled bill): Retains funding in the introduced budget for program growth ($37 million in FY 2025 and $68.3 million in FY 2026).
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains provisions in the introduced budget to streamline the process of submitting reimbursement requests to the Office of Children’s Services.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Caps state reimbursement to localities for private day special education services; stipulates that state reimbursement to localities for private day education services will not increase more than 5 percent over the rates for such services provided the previous year (as introduced, the cap was set at 2.5 percent).  Directs reporting on the transition of students from private placements back to local school divisions.  VACo opposes the proposal to cap the state’s contribution to the program.
  • Governor’s amendments: No change.

HHR – Health

• As passed by the General Assembly (enrolled bill): Bars the Board of Health from modifying the geographic or designated service areas of regional emergency medical services councils without consulting relevant stakeholders and requires annual reporting on any planned changes to regional council boundaries.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Eliminates the proposed $1 million in the introduced budget for community health workers and doulas at local health districts.
  • Governor’s amendments: Restores this funding.  (Amendment 92)

• As passed by the General Assembly (enrolled bill): Provides $25 million in FY 2025 for one-time grants to localities to upgrade or replace drinking water infrastructure.  Requires priority to be given to Greene County and the Town of Bowling Green in administering grant awards.
  • Governor’s amendments: Reduces funding by $10 million; directs the first $6 million to a water transmission main project in the City of Portsmouth, with the remaining funding prioritized for Greene County and the Town of Bowling Green. (Amendment 96)

• As passed by the General Assembly (enrolled bill): Requires the Virginia Department of Health to report on progress made in implementing recommendations from the Department of Planning and Budget and JLARC and provides $300,000 in FY 2026 to hire two internal audit positions.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Provides $1 million in FY 2026 for a pilot program to provide non-emergency medical transportation services for certain uninsured Virginians.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains funding in the introduced budget for the development of necessary databases for a rainwater harvesting system permitting program.  ($118,551 per year).
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains $1.8 million in the introduced budget in FY 2026 for the Office of Drinking Water to maintain compliance with federal and state regulations.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains $546,266 GF and $421,680 NGF in the introduced budget in FY 2026 for rent increases at local health departments.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains action in the introduced budget to increase the fee for an expedited vital records search from $48 to $53, effective July 1, 2025.
  • Governor’s amendments: No change.

HHR – Behavioral Health – Crisis Services, Temporary Detention Orders, and State Hospitals

• As passed by the General Assembly (enrolled bill): Instead of the $3.5 million in FY 2026 proposed in the introduced budget, provides $2 million in FY 2025 for reimbursement to local law-enforcement agencies for time spent transporting individuals under temporary detention orders and emergency custody orders.  Removes language in the introduced budget that directed prioritization of funds for law enforcement agencies within certain Virginia State Police regions; language now directs prioritization for localities with agencies that must travel far distances to transport individuals to state facilities.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Reduces the $35.2 million in proposed funding in the introduced budget for private hospitals to hire Special Conservators of the Peace by $31.1 million in FY 2026; directs prioritization of this funding to certain regions.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains the $1.2 million increase in the introduced budget for co-response teams as part of the Marcus Alert initiative and provides an additional $4.8 million in FY 2026, for a total of $6 million in new funding.
  • Governor’s amendments: Reduces the new funding by $3.6 million, for an increase of $2.4 million in FY 2026.  (Amendment 117)

• As passed by the General Assembly (enrolled bill): Increases support for pilot programs for individuals with dementia or geriatric individuals who may otherwise be admitted to state hospitals by $1 million in FY 2026.
  • Governor’s amendments: Removes this new funding. (Amendment 115)

• As passed by the General Assembly (enrolled bill): Directs the Department of Behavioral Health and Developmental Services (DBHDS) to form a workgroup to review and recommend a location for a replacement for Northern Virginia Mental Health Institute.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Provides $3 million in FY 2025 to convert 10 beds at Southeastern Virginia Training Center to a skilled nursing level of care to enable transfer of residents at Hiram Davis Medical Center in anticipation of its planned closing.  Directs DBHDS to develop a plan for the closure of Hiram W. Davis Medical Center, including an analysis for the development of skilled nursing beds at Southeastern Virginia Training Center.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Reduces the proposed $52.1 million in renovations, repairs, and upgrades to state hospital facilities included in the introduced budget by $19.8 million; directs $18.2 million for an HVAC replacement at Catawba Hospital and $10 million to address security, access control, and window replacement at Southwestern Virginia Mental Health Institute.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains funding in the introduced budget for four additional forensic evaluators to address the growing forensic population at certain state hospitals.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains funding in the introduced budget for salary increases for trades staff at state facilities.
  • Governor’s amendments: No change.

HHR – Support for Community Services Boards

• As passed by the General Assembly (enrolled bill): Requires that additional state funding for CSBs may not be used to supplant existing local contributions. Prevents DBHDS from granting a waiver for the local match requirement for CSBs unless the locality can demonstrate hardship in terms of reduced employment, per capita income, or property values.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Provides $8.7 million in FY 2026 for CSBs to hire support coordinators to implement additional Medicaid waiver slots provided over the biennium.
  • Governor’s amendments: Reduces the new funding by $4.35 million.  (Amendment 116)

• As passed by the General Assembly (enrolled bill): Provides $1.5 million in FY 2026 to reimburse CSBs for restoration of competency services.
  • Governor’s amendments: No change.

HHR – Additional Behavioral Health Items

• As passed by the General Assembly (enrolled bill): Retains changes in the introduced budget to language governing eligibility for grants for recovery support services.  Current language allows DBHDS to make grants to members of the Virginia Association of Recovery Residences; the revised language broadens eligibility to “recovery residences certified by the Department of Behavioral Health and Developmental Services for recovery support services.”  Provides $115,846 in FY 2026 to fund the provisions of legislation dealing with the regulation of recovery residences.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Directs DBHDS to align and monitor recovery support services, including services offered by recovery residences and other similar providers, with the nationally recognized American Society of Addiction Medicine (ASAM) 4th Edition criteria by June 30, 2026, to ensure quality and consistency in care.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains funding in the introduced budget for additional quality improvement specialists, registered nurse care consultants, licensed behavioral analysts, dental staff, and dental services contracts as required by the state’s settlement agreement with the U.S. Department of Justice.  ($4.6 million GF and $532,410 NGF in FY 2026)
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains $663,758 in the introduced budget in FY 2026 for five additional licensing positions.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains the additional $1.5 million in the introduced budget in FY 2025 for Early Intervention/Part C caseload growth.
  • Governor’s amendments: No change

HHR – Medicaid

• As passed by the General Assembly (enrolled bill): Retains appropriation in the introduced budget providing approximately $686 million GF over the biennium for forecasted growth in Medicaid and the children’s health insurance program.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Authorizes the Department of Medical Assistance Services (DMAS) to pursue a Medicaid waiver to allow coverage for neurobehavioral and neurorehabilitation facilities to support 20 individuals with traumatic brain injuries and neurocognitive disorders; provides $1.6 million in General Funds in FY 2026.
  • Governor’s amendments: Removes the authorization and funding.  (Amendment 107 and Amendment 113)

• As passed by the General Assembly (enrolled bill): Eliminates the Medicaid reserve fund proposed in the introduced budget.  Directs DMAS to convene a workgroup with staff designees from the Department of Planning and Budget and the House Appropriations and Senate Finance and Appropriations Committees to evaluate options for developing a process that recognizes the true costs of policy changes to the Medicaid program and how to integrate such process as part of the development of the state budget.  Includes language requiring more detailed reporting of Medicaid expenditures, as well as reporting on cost-effectiveness strategies for Medicaid and the children’s health insurance programs.  Language also requires a fiscal analysis of policy or programmatic changes to the Medicaid and children’s health insurance programs and restricts implementation unless funding is authorized through an appropriation by the General Assembly, a statutory requirement or federal law.  Also includes language requiring DMAS to convene semiannual meetings with Cabinet secretaries and staff to monitor Medicaid expenditures and enrollment growth.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Directs DMAS and the Department of Social Services to develop cost estimates for the recommendations in a recent report on Medicaid eligibility determination and to establish a joint Steering Committee on Medicaid Eligibility.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains funding and authorization in the introduced budget for DMAS to add coverage for services provided to Medicaid beneficiaries during short-term stays for acute care in psychiatric hospitals or residential treatment settings that qualify as Institutes of Mental Disease (such as crisis stabilization units) through a Medicaid waiver.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains funding and authorization in the introduced budget for DMAS to provide covered services for incarcerated youth in the 30 days prior to release and immediately after release in accordance with changes in federal law included in the Consolidated Appropriations Act of 2023 ($1 million in non-General Funds in FY 2025 and $367,178 General Funds/$855,026 non-General Funds in FY 2026).
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains funding and authorization in the introduced budget for children served in Psychiatric Residential Treatment Facilities (PRTFs) to maintain their enrollment in managed care during their treatment; payments for PRTF per diem payments and required services will still be paid on a fee-for-service basis ($273,575 GF and $290,568 NGF in FY 2026).
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains language in the introduced budget specifying the use of funding that was previously provided for DMAS to contract with a vendor to handle all incoming medical assistance‐related mail currently directed to local departments of social services.
  • Governor’s amendments: No change.

HHR – Social Services

• As passed by the General Assembly (enrolled bill): Authorizes the State Board of Social Services to promulgate regulations to expand the application window for the Low-Income Home Energy Assistance Program, provided adequate funding is available to extend the application period.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Provides an additional $300,000 in FY 2026 to expand the existing program at the Department of Social Services to find relative and fictive kin for youth in congregate care or youth who have been in foster care for 12 months or more.
  • Governor’s amendments: Removes this new funding. (Amendment 124)

• As passed by the General Assembly (enrolled bill): Directs the Department of Social Services to develop a process for Virginia localities to enter into memorandums of understanding with localities in surrounding states for kinship care.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Directs the Department of Social Services to assess the feasibility of requiring local departments to apply for certain federal benefits on behalf of children in foster care and to conserve these benefits in an appropriate trust instrument.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains $500,000 in FY 2025 and $7.5 million included in the introduced budget in FY 2026 to implement recommendations from the Office of the State Inspector General to improve child protective services, to include enhancements to the state child protective services hotline, additional regional consultants, and additional CPS investigator and supervisor positions at local departments of social services.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains $7.3 million GF and $6.5 million in NGF in the introduced budget in FY 2026 to supplement existing support for income and employment verification and directs the Department of Social Services to investigate alternatives to its current contract.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains $500,000 GF and $500,000 NGF included in the introduced budget in FY 2026 to modernize the statewide 2-1-1 Information and Referral System.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains provisions in the introduced budget funding a 3 percent increase in foster care and adoption assistance payments in accordance with budget language requiring a reasonable, automatic adjustment for inflation in fiscal years following a fiscal year in which salary increases are provided to state employees ($1.5 million GF and $1.4 million NGF in FY 2026).
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains language from the introduced budget making clear that administrative costs for the Percentage of Income Payment Program (PIPP) are capped at $5.5 million annually, which includes program administration for state agencies and local departments of social services.  VACo had previously secured clarifying language in the budget to ensure that local administrative costs would be covered by the PIPP Fund and that a local match would not be required.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains provisions in the introduced budget increasing the auxiliary grant rate from $2079/month to $2103/month, beginning January 1, 2025.  Also sweeps $1 million in balances from the program.
  • Governor’s amendment: No change.

• As passed by the General Assembly (enrolled bill): Directs the Department of Social Services to review best practices to begin the process of transitioning electronic benefits transfer cards to chip cards to combat fraud.
  • Governor’s amendments: Provides $1.5 million GF and matching NGF in FY 2026 to transition electronic benefits transfer cards to chip cards; removes study language. (Amendment 130)

Labor – Workers’ Compensation

• As passed by the General Assembly (enrolled bill): Increases from 52 to 104 weeks the maximum duration after the date of diagnosis that workers’ compensation benefits are payable for anxiety disorder, depressive disorder, and post-traumatic stress disorder incurred by law enforcement officers and firefighters acting in the line of duty.
  • Governor’s amendments: No change.

Labor – Paid Family and Medical Leave

• As passed by the General Assembly (enrolled bill): Authorizes a treasury loan for the Virginia Employment Commission to fund start-up costs associated with the implementation of a paid family and medical leave program, contingent on the enactment of legislation establishing the program.
  • Governor’s amendments: Removes this authorization.  (Amendment 136)

Natural and Historic Resources – Water Quality

• As passed by the General Assembly (enrolled bill): Retains the introduced budget’s deposit of $26.3 million in FY 2025 from FY 2024 surplus revenues to the Water Quality Improvement Fund and the Virginia Natural Resources Commitment Fund.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains the introduced budget’s deposit of $17.4 million in FY 2025 from FY 2024 surplus revenues to the Water Quality Improvement Fund to support the Enhanced Nutrient Removal Certainty Program.
  • Governor’s amendments: Directs $4.25 million of this funding to the City of Portsmouth for sanitary sewer pump station upgrades. (Amendment 146)

• As passed by the General Assembly (enrolled bill): Directs the Secretary of Natural and Historic Resources to convene a workgroup to review the Water Quality Improvement Fund, including the organizational structure in the Code of Virginia and budget, disposition of funding, feasibility of the incorporation of the Stormwater Local Assistance Fund, grant approval guidelines including cost-effectiveness and benefits of practices funded, grant agreement terms, annual reporting requirements, potential improvements to the current funding needs assessments, and outdated or unnecessary requirements.  VACo is named as a participant in the study.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Allows 50 percent of any funds previously distributed for agricultural best management practices that cannot be obligated by a soil and water conservation district in any fiscal year by June 15 to be reallocated by the Virginia Soil and Water Conservation Board to any soil and water conservation district for conservation practices.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Provides $40 million in bond proceeds in FY 2025 for the Stormwater Local Assistance Fund (SLAF).  VACo has historically supported funding for SLAF.
  • Governor’s amendments: Vetoes this item.

• As passed by the General Assembly (enrolled bill): Provides $250,000 in FY 2025 for cyanobacteria mitigation and remediation at Lake Anna.  Provides $500,000 in FY 2025 for monitoring of harmful algal blooms in the Shenandoah River.  Provides $250,000 in FY 2025 for testing of inland waterways for the presence of harmful algal blooms.
  • Governor’s amendments: Reduces funding for monitoring of harmful algal blooms in the Shenandoah River by $250,000.  (Amendment 145)

• As passed by the General Assembly (enrolled bill): Removes obsolete language regarding stormwater utility reports to the Auditor of Public Accounts.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Deposits $50 million in FY 2025 to the Virginia Community Flood Preparedness Fund.
  • Governor’s amendments: Replaces the $50 million from the General Fund with $50 million from Regional Greenhouse Gas Initiative proceeds. (Amendment 140)

• As passed by the General Assembly (enrolled bill): Provides $2.3 million in FY 2025 for groundwater research in the Eastern Groundwater Management Area.
  • Governor’s amendments: Reduces this funding by $1.3 million. (Amendment 144)

• As passed by the General Assembly (enrolled bill): Modifies the introduced budget’s deposit of an additional $50 million in FY 2025 from FY 2024 surplus revenues for the City of Richmond’s Combined Sewer Overflow project to provide $25 million in each year of the biennium (these funds would otherwise have been deposited to the Water Quality Improvement Fund).
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Retains provisions in the introduced budget authorizing $462,541 in interest earnings from the Water Quality Improvement Fund and the Virginia Natural Resources Commitment Fund in FY 2026 to fund three additional positions to provide oversight and assistance to Soil and Water Conservation Districts; also retains provisions authorizing the use of $355,393 in interest earnings from the Soil and Water Conservation District Dam Maintenance, Repair, and Rehabilitation Fund to support two positions to oversee maintenance, repair, and rehabilitation projects necessary for District-owned dams to be in compliance with the Dam Safety Act and attendant regulations.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Reverses proposal in the introduced budget to replace $400 million in bond authorization for wastewater projects over the biennium with a like amount of General Fund dollars from excess FY 2024 revenues.  Restores the use of bond proceeds and increases the general fund supported debt authorization by $31.2 million to reflect cost overruns and increases for these projects.  VACo strongly supports this funding.
  • Governor’s amendments: Vetoes the item containing the bond authorization.  Proposes to designate $431.2 million in excess FY 2025 revenues, after any required Revenue Stabilization Fund deposit, for this purpose. (Amendment 174)

Natural and Historic Resources – Other natural resources

• As passed by the General Assembly (enrolled bill): Removes language added in the 2024 Appropriation Act providing $10 million to establish the Virginia Clean Energy Innovation Bank, as the Governor vetoed the legislation establishing the Bank in 2024. Reverts $10 million from the Department of Energy to the General Fund.
  • Governor’s amendments: Reinserts the language establishing the Bank and reduces the reversion to $2 million. (Amendment 176 and Amendment 32)

Transportation

• As passed by the General Assembly (enrolled bill): Removes authorization for a treasury loan for the Roanoke Regional Airport Commission that was included in the introduced budget.
  • Governor’s amendments: Reinstates authorization. (Amendment 166)

• As passed by the General Assembly (enrolled bill): Includes language revising allocations from the Commonwealth Aviation Fund.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Directs the Department of Motor Vehicles to evaluate the potential impact of the DMV Select Program on participating localities.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Provides $3.3 million in FY 2025 in updated operating support for the Washington Metropolitan Area Transit Authority.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Includes $250,000 in FY 2025 for a study of the impact of the development of the state’s highway system on African American communities.
  • Governor’s amendments: Removes this funding. (Amendment 168)

• As passed by the General Assembly (enrolled bill): Retains language in the introduced budget modifying the provisions of the 2024 Appropriation Act regarding toll relief in certain localities.  Retains provisions in the introduced budget eliminating tolls on the George P. Coleman Bridge, effective January 1, 2026.  Directs the Commissioner of Highways to work with the Department of Rail and Public Transportation and toll operators throughout the Commonwealth to reduce, or, when practical, eliminate the practice of charging tolls for public transit buses, when not in conflict with contractual obligations or other provisions of law.
  • Governor’s amendments: Removes language regarding mitigation or elimination of tolls on public transit buses. (Amendment 170)

• As passed by the General Assembly (enrolled bill): Retains provisions in the introduced budget appropriating $175 million in FY 2025 in FY 2024 surplus revenues to the I-81 Corridor Improvement Program, as required by the 2024 Appropriation Act.
  • Governor’s amendments: No change.

Tax policy

• As passed by the General Assembly (enrolled bill): Eliminates the Car Tax Credit proposed in the introduced budget and instead provides income tax rebates of $200 for individual taxpayers and $400 for joint filers.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Extends the expiration date on the enhanced standard deduction, refundable earned income tax credit, and the pass-through entity elective tax until January 1, 2027; increases the standard deduction for tax year 2025 and 2026 to $8,750 for single filers and $17,500 for joint filers; and increases the refundability of the earned income tax credit from 15 to 20 percent of the federal earned income tax credit.
  • Governor’s amendments: Makes the enhanced standard deduction, the enhanced refundable earned income tax credit, and the pass-through entity elective tax permanent. Also makes the credit for pass-through entity taxes paid to other states permanent. (Amendment 200 and Amendment 201)

• As passed by the General Assembly (enrolled bill): Eliminates the proposed implementation of market-based sourcing for corporate income tax in the introduced budget.  Directs the Department of Taxation to assess implementing market-based sourcing, including its administrative feasibility and impact on state tax revenue.
  • Governor’s amendments: No change.

• As passed by the General Assembly (enrolled bill): Directs the Department of Taxation to convene a work group composed of tax practitioners experienced in the preparation of corporate tax returns involving net operating losses to study the treatment of net operating losses in Virginia when compared to other states and make recommendations to simplify such treatment in Virginia.
  • Governor’s amendment: No change.

• As passed by the General Assembly (enrolled bill): Directs the Joint Subcommittee on Tax Policy to study the data center sales and use tax exemption during the 2025 interim, to include reviewing competitive advantages provided by existing and future exemptions, approaches taken in other states, methods to attract data center investment to non-urbanized areas of the Commonwealth, the recommendations and options in the 2024 JLARC study of data centers, and the estimated direct and indirect economic benefits of data center investment in the Commonwealth.
  • Governor’s amendment: Retains the study language.  Extends the sunset date on the data center sales and use tax exemption from 2035 to 2050. (Amendment 202)

• As passed by the General Assembly (enrolled bill): Extends the sales and use tax exemption for certain drilling equipment from July 1, 2025, to July 1, 2026; extends the sales and use tax exemption for bullion and legal tender coins from July 1, 2025, to July 1, 2026; extends the recyclable materials processing equipment tax credit from January 1, 2025, to January 1, 2027.
  • Governor’s amendment: Retains these actions and also extends the major business facility job tax credit from July 1, 2025, to July 1, 2027; extends the research and development expenses tax credit from January 1, 2025, to January 1, 2027; and extends the major research and development expenses tax credit from January 1, 2025, to January 1, 2027. (Amendment 199)

• As passed by the General Assembly (enrolled bill): Extends the Housing Opportunity Tax Credit from 2025 until 2030; directs $20 million of the $64 million in credits authorized per calendar year from 2026 through 2030 for qualified projects located in certain geographic areas.
  • Governor’s amendment: No change.

• As passed by the General Assembly (enrolled bill): Eliminates the proposal in the introduced budget to provide an income tax deduction for cash tips.
  • Governor’s amendment: No change.

• As passed by the General Assembly (enrolled bill): Eliminates the proposal in the introduced budget to harmonize the interest rate on state tax underpayments or refunds with the rates established by the Internal Revenue Code (current law provides that the rate of interest in the IRS’s rate plus two percent).
  • Governor’s amendment: No change.

• As passed by the General Assembly (enrolled bill): Retains the proposal in the introduced budget to increase the threshold for individual taxpayers to make estimated tax payments from the current level of $150 in tax liability to $1000, starting with taxable years beginning January 1, 2026.
  • Governor’s amendment: No change.

Reserves

• As passed by the General Assembly (enrolled bill): Deposits $294.5 million in the Revenue Reserve Fund.
  • Governor’s amendments: Contingent on FY 2025 revenues meeting the official revenue estimate, deposits an additional $188 million in FY 2025 and $112 million in FY 2026. (Amendment 86).

Impacts of federal policy changes on Virginia budget

• As passed by the General Assembly (enrolled bill): Requires the Department of Taxation to provide estimated fiscal impacts of any changes to federal income tax policy within 30 business days of their enactment.  Directs the Governor to submit a budget bill within 20 business days of receiving the estimated fiscal impacts if the cumulative projected impact of the federal changes would decrease general fund revenues by more than $100 million in the current or succeeding fiscal year. If these changes occurred after November 1, the Governor would not be required to submit a budget bill within 20 days, but would be required to account for the revenue impacts in the budget submitted under the regular statutory schedule.
  • Governor’s amendment: Eliminates this language. (Amendment 196)

• As passed by the General Assembly (enrolled bill): Stipulates that Virginia will not automatically conform its income tax structure to any federal income tax changes between January 1, 2025, and January 1, 2027, that would increase or decrease state general fund revenues by any amount in the fiscal year in which the amendment was enacted or any of the succeeding four fiscal years, with the exception of amendments to the federal tax code that are subsequently adopted by the General Assembly, or federal income tax “extenders.”
  • Governor’s amendment: No change.

• As passed by the General Assembly (enrolled bill): Requires the Department of Planning and Budget to provide the estimated fiscal impact within 30 business days after enactment of federal changes that impact federal grant revenue to the Commonwealth by at least $100 million in the current or succeeding fiscal year.  Federal grants will be payable only to the extent that non-general fund revenues are sufficient.  If federal grant reductions result in additional state General Fund expenditures being required that exceed 1 percent of the General Fund operating budget in the current or succeeding fiscal year, the Governor must consult with General Assembly leadership about a special session.
  • Governor’s amendment: Eliminates this language. (Amendment 197)

• As passed by the General Assembly (enrolled bill): From any excess FY 2025 revenues that are not required for a Revenue Stabilization Fund deposit, the conference report earmarks the first $20 million for Virginia Military Survivors and Dependents Education Program tuition waivers; remaining surplus funds after any required deposits to the Water Quality Improvement Fund are to be reserved to address the impacts of any reductions to federal appropriations contained in the state budget.
  • Governor’s amendment: Removes this language and replaces with proposal to designate $431.2 million in excess FY 2025 revenues, after any required Revenue Stabilization Fund deposit, for wastewater projects. (Amendment 174)

Gaming

• As passed by the General Assembly (enrolled bill): Establishes a new significant infrastructure facility limited license tax to be paid to the locality hosting live horse racing for each day of live racing.  After July 1, 2026, localities hosting satellite facilities with historical horse racing would no longer be required to split the local share of the tax levied on part-mutuel wagering with New Kent County.
  • Governor’s amendments: Retains these revisions; adjusts the percentage retained by the licensee for pari-mutuel pools generated by wagering on historical horse racing, which is then divided among the host locality (and until July 1, 2026, with New Kent County), the Problem Gambling Treatment and Support Fund, various equine programs, and the Commonwealth. (Amendment 204)

• As passed by the General Assembly (enrolled bill): Bars the Virginia Racing Commission from authorizing a licensee to construct, establish, operate, or own a satellite facility until a referendum is held on or after July 1, 2025, if the locality has not passed a referendum allowing pari-mutuel wagering on or after July 1, 2018, and no pari-mutuel wagering at satellite facilities was authorized by the Commission on or before January 1, 2025.
  • Governor’s amendments: Vetoes this language.

• As passed by the General Assembly (enrolled bill): Does not include language establishing the Virginia Gaming Commission or legislation legalizing and imposing a tax and regulatory framework on skill games.
  • Governor’s amendments: Inserts legislation establishing the Virginia Gaming Commission and authorizing a treasury loan for start-up costs.  (Amendment 205 and Amendment 178)

Other items

• As passed by the General Assembly (enrolled bill): Adjusts the scope and title of a project to provide water to state facilities in Nottoway County.
  • Governor’s amendments: Makes further amendments to the language governing the project, including establishing a workgroup regarding the creation of a commission to oversee asset management planning and rates and to monitor the operation and maintenance for the distribution of water.  (Amendment 191)

VACo Contacts: VACo Legislative Team