Democrats who control the Virginia General Assembly reached an 11th-hour compromise with Republican Gov. Glenn Youngkin to extend the timeline for negotiations over the state budget, a move that lawmakers said Wednesday would offer a reset for what has so far been a bitter and unproductive process.
Lawmakers were meeting in Richmond for a one-day session to consider Youngkin's vetoes and proposed amendments to legislation, including the budget. As recently as Tuesday afternoon, legislative leaders had indicated they were prepared to reject the substance of Youngkin's proposed changes to the new two-year spending plan, a move that would have set up a likely budget veto, leaving lawmakers facing the looming prospect of a government shutdown if they failed to strike a deal by the start of the new fiscal year on July 1.
A series of meetings between lawmakers and Youngkin helped both sides agree to a new approach: tossing aside the version of the budget that lawmakers passed in March and starting anew, with plans to meet for a vote on a still-to-be-hashed-out compromise version in a special session beginning May 13.
“That will put us on a path to have a budget that serves Virginia and does not put us in jeopardy between here and there,” Youngkin said.
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Prior to Wednesday’s so-called reconvened session, Democratic lawmakers spent weeks publicly at odds with Youngkin over the budget that the Assembly sent him in a bipartisan vote on the final day of its regular session.
Youngkin embarked on a series of public events during which he blasted what he called the “backward budget,” criticizing lawmakers for including a sales tax expansion to digital products that he initially proposed at the start of the process in December but had paired with an income tax cut that Democrats rejected. The governor has said unequivocally that he won’t sign a budget that increases taxes.
Democrats criticized Youngkin for his tour but then launched one of their own to defend their budget plan, which would increase K-12 education spending and pay for teachers and other public workers.
With his budget amendments, the governor had proposed sticking with the tax policy status quo, which required him to also suggest spending cuts and other accounting maneuvers to account for the revenue that would be lost by eliminating the new digital sales tax.
Lawmakers in the House of Delegates used a procedural maneuver to vote down those amendments and then effectively scrap the current budget bill so that negotiators can start over.
House Speaker Don Scott told reporters the decision was made in the hopes of restarting talks in a more conciliatory manner.
“I think we’re in a better, more mature place regarding the budget now. And I think everybody understands where their roles and responsibilities are a little bit better,” he said.
After lawmakers dispatched the budget bill, they started to work through dozens of other bills Youngkin returned to them with suggested changes.
In one of the day's most closely watched votes, lawmakers overwhelmingly rejected Youngkin's proposed amendments to a heavily lobbied measure dealing with so-called skill games, gambling machines that proliferated in convenience stores and other small businesses around the state before lawmakers passed a ban in 2020.
This year’s legislation would legalize, regulate and tax the machines, though the changes Youngkin suggested would implement far stricter limits and a higher tax rate than the version the Assembly sent him. Convenience stores around the state staged demonstrations this week, briefly halting lottery ticket sales Monday and closing for an hour on Tuesday in an effort to draw attention to the issue and urge lawmakers to reject the governor’s amendments.
With Youngkin's amendments stripped out, the measure now goes back as it passed to the governor, who can veto it or let it become law. A coalition that opposes the machines and includes the state's casinos called on Youngkin to veto the bill, while a pro-skill games coalition noted the subject could be addressed further during the special session.
Youngkin's other amendments spurred mixed responses. Lawmakers — sometimes on a bipartisan vote — rejected some changes but also accepted many of them, including one that would add Petersburg to the list of eligible casino host cities. That means the bill as amended becomes law. Most new legislation takes effect July 1.
Lawmakers did not override any of Youngkin's vetoes. Democrats in the House, whose narrow majority falls far short of the 2/3 needed for an override, spoke critically of a handful of vetoes but didn't vote on any of them.
The Senate failed to secure the 2/3 vote needed to override the governor’s vetoes on 20 bills, but came close with some GOP support on one bill that would have allowed counties and cities to impose an additional local sales tax to be earmarked for construction or renovation of schools.
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