2023 State Budget

As the 2023 short session winds down, the most significant legislation we have left to work on are the two budget bills amending the two-year state budget plan we adopted last year.

As the saying goes, a budget is a reflection of one's priorities, and the House and Senate budgets released last week underscore the stark contrast in priorities between the two chambers and the two parties. With a staggering $1 billion difference between them, the Democrats and Republicans in Richmond clearly have very different visions for Virginia's future. 

The GOP's House Budget 

Unfortunately, the House budget, crafted by Republicans, falls short in meeting the needs of hardworking Virginians. At the heart of the budget are over $350 million in corporate tax breaks, which disproportionately benefit big businesses rather than the average Virginian. This, in turn, puts critical services like our schools, roads, and healthcare in jeopardy. It is evident that the Republican party is more concerned with appeasing their corporate donors and extremist base than ensuring that middle-class Virginians have the resources they need to succeed.

At a time when inflation is causing significant strain for many households, it is simply unacceptable that the House budget proposes middle-class Virginians pay a higher tax rate than our wealthiest corporations. As we delve deeper into the budget negotiations, we will be keeping a watchful eye on this discrepancy and advocating for the needs of all Virginians.

The House budget is a cause for concern on multiple fronts. Notably, it includes a provision for $50 million to be directed towards lab schools, which diverts much-needed attention and funding away from our public school system. Additionally, the House budget eliminates language that allows for state-funded abortions in certain fetal abnormality diagnoses - a critical access point that is currently allowed in state law. This, coupled with a $13.4 million reduction in the VA Cannabis Control Authority budget, presents a worrying picture of the House GOP's priorities.

The House budget also fails to allocate funds for important programs, such as the Firearm Violence & Prevention Center, the Safer Communities Program, and the Cover All Kids healthcare initiative. These are just a few of the more prominent disparities between the House and Senate budgets. 

Working to Fix the Budget

As Deputy Floor Leader, I worked with Leader Don Scott to improve the House version of the budget. Together, we had amendments drafted and introduced that would have addressed real issues facing our communities - issues that Virginians care deeply about, such as school funding, abortion access, gun violence prevention, and protecting our democracy. It was our hope that these amendments would help bridge the gap between the House and Senate budgets, ultimately leading to a more equitable and just budget that serves all Virginians.

Specifically, our amendments would have kept the corporate tax rate at its current level and allocated the revenue to fully fund our school systems in Virginia. They also would have kept the top tax bracket the same as it is today and used the additional revenue to raise teacher pay to the national average - an 11% increase over what teachers in Virginia are paid today.

None of these amendments were adopted, but it gave us an opportunity to showcase our priorities while forcing a vote on these important issues. Although I voted against this version of the budget, the process is far from over. There is still time to make changes as the House and Senate budget conferees will have to come together to close the budget gap, giving both Chambers another opportunity to vote on a better budget (we hope!). Either way, the General Assembly is constitutionally bound to create a balanced budget, which always makes the last few weeks of session interesting. 

Weekend Update

Last weekend while I was back in the district for a few days, I hosted office hours at Northside Social and greeted dozens of constituents who stopped by to say hello, lobby me for budget and legislative priorities, or simply thank me for serving. I look forward to scheduling a number of in-person post-session events to update you all and get your feedback on how session went.

Finally, I wanted to take a moment to thank the Dranesville District Democratic Committee for hosting an amazing brunch and straw poll, which I was pleased to attend!

I’m proud to announce that I received more overall votes than any other candidate in any race in the mostly-just-for-fun straw poll and outpaced my likely primary opponent with over 98% of the vote.

Just Say No to the Commanders Stadium

At the beginning of the year, it seemed inevitable that Virginia would pass legislation to create a special Stadium Authority, allowing the NFL and its Washington Franchise to issue debt to build a new stadium in one of the DC exurbs. Taxpayer money (albeit money generated arguably only because the stadium was there) would then be used to pay the debt back.

The only question was how sweet the deal would be for the owner, and how high the tab might be for Virginia taxpayers.

The Senate Majority Leader, Democrat Richard Saslaw carried the broader version of the bill in the State Senate. House Appropriations Chair, Republican Barry Knight of Virginia Beach carried a bill narrower version in the House of Delegates. The bill even got a nod of approval from newly elected Governor Youngkin in his inaugural and State of The Commonwealth addresses.

Having this momentum, the bill cruised through the committee process in the House (keeping in mind the Appropriations Chair was the sponsor) and landed on the House Floor a few weeks into session.

Meanwhile, I was getting nothing but negative constituent feedback about a taxpayer-funded stadium. There was no organized opposition, but plenty of e-mails, commentors at town halls, and people pulling me aside at the grocery store all saying the same thing:

“I’m against this.”

So, when the bill got to the floor, I was looking for ways to slow down the momentum of the train that was barreling down the tracks toward either Dumfries or Loudoun. I decided to throw up a signal light.

Some constituents I heard from were concerned about traffic implications and others about the rate of return on stadium investments. And still others thought it was a bad land use decision. Most of the complaints I heard were that the primary beneficiary of the plan would be someone who had shown himself to be wholly undeserving of it: Daniel Snyder.

Some disapproved of the way the team had performed during his tenure as owner, but most felt like he was (based on press accounts and investigations swirling around him) a bit of a creep. Certainly not someone they’d want to be in business with.

So that was my angle of attack. When the bill came up for a vote on the floor, I introduced an amendment that tied the creation of the Stadium Authority to the NFL and the Washington Franchise agreeing to release the results of attorney Beth Wilkinson’s investigation into the toxic team culture, including allegations of sexual harassment and assault by team employees. Unless and until that report was released, as the U.S. House Government Oversight Committee had requested, the Stadium Authority legislation would not take effect.

Although the amendment was rejected with all 52 House Republican’s votes, it changed the conversation about the bill and its trajectory.

Eventually both the House and Senate plans passed in different forms, but without language tying the release of the report to the creation of the Authority. The bill no longer seemed quite so inevitable.

The Senate version of the bill needed to be corrected to avoid giving the team access to billions in tax revenue related to all the business adjacent to the new hypothetical stadium. A Super bowl was played in February in a stadium funded entirely by its owner with no taxpayer help.

When the bill conferees working couldn’t come to an agreement on the size and scope, it became clear that there were no longer the votes for any bill. It was allowed die a quiet death.

Last week, ESPN Magazine reported that Mr. Snyder’s inability to secure public financing for a new stadium, and his inability to take on the debt to build one without government help, was contributing to increasing noise that his fellow owners might force him to sell the team.

This goes to show that sometimes even when the numbers are stacked against you in the legislature, it’s worth putting an idea on the table and making people vote on it – making a statement even when it has no chance of passing.

My constituents didn’t want to pay for an NFL Stadium, they didn’t want it in Virginia, and they didn’t want Dan Snyder to reap the benefits of the deal.

I took their concerns to Richmond and made them heard.

If you’d like to share anything with me about the upcoming 2023 Session, the best way to reach me is via e-mail at delmsimon@house.virginia.gov or at 571-327-0053.

Special Session & Budget Update

I typically focus my June column on the bills that passed during the most recent General Assembly Session, since the laws we pass during our regular session are effective on July 1st and July 1st is the first day of the fiscal year, the date on which the new budget becomes effective.  

This year we are running a little bit behind… 

We finished the regular session in March without a budget, forcing the new Governor to call us back for a Special Session on April 4th. Unfortunately, he forgot to check with House and Senate leaders first - even those of his same party. So, when we arrived back in Richmond there was literally nothing for us to do. 

The GOP-controlled House and the Democratic Senate finally reached a budget compromise over Memorial Day weekend, and we returned on June 1st to debate and adopt the budget that was released on Memorial Day Monday. It was then sent to the Governor for his action.  

The Special Session convenes again on June 17th to vote on any amendments the Governor may have made, although he’s not obliged to tell us what they are until 11:59 on the 16th of June.  So much for transparency. 

So, I can’t yet tell you exactly what will happen with the Grocery Tax, the Earned Income Tax Credit, or your standard deduction on July 1st. I can talk about a few of the bills that passed, and more significantly this year, a few bills that WON’T become law on July 1st.  

This is all thanks to opposition from Democrats in the General Assembly and despite the Governor’s desire to see these changes made.  

For instance, the City of Falls Church and Fairfax County will keep those signs at the entrances to our parks, libraries and community centers that remind residents firearms are not permitted in those public spaces. Bills to repeal local authority to regulate firearms were defeated in committee, as were bills to repeal Virginia’s proven and effective red-flag laws, and bills to allow Virginians to carried concealed weapons anywhere without a permit.  

LGBTQ+ Virginians will continue to enjoy full legal protection from discrimination under the Virginia Values Act, as efforts to repeal the bill, make it more difficult to enforce, and to provide a myriad of exemption under the guise of *religious freedom* were defeated.  

Even though Governor Youngkin has created a secret tip line to report the teaching of Critical Race Theory and “inherently divisive topics” in the classroom, bills that would ban the teaching of such topics in our excellent Falls Church and Fairfax County schools were defeated.  

Efforts to repeal public sector employees’ right to form a union were unsuccessful. This means negotiations can continue toward educator-friendly collective bargaining agreements in Falls Church City that could provide the best model for the rest of Virginia. 

That said, there were a few good things that did pass and will become law in a few weeks.  

Our furry friends will be better protected now that individuals who have violated the federal Animal Welfare Act will not be allowed to sell or import cats and dogs. 

Student-athletes can now be compensated for the use of their name, image or likeness (NIL) and prohibits higher education institutions from preventing this except in certain circumstances.  

We’ll start taking baby steps toward campaign finance reform. Beginning in January 2024, candidates will have record keeping and retention requirements so that the Department of Elections will be able to annually audit a percentage of campaign committee accounts. 

If you are a Virginia Realtor, you will now have the ability to negotiate health insurance options through your member associations.  

For my fellow environmentalists, localities can now adopt ordinances for the planting and placement of trees during the land development process. This means that tree conservation can be a bigger priority in areas with high development. 

To address the critical issues at the Virginia Employment Commission, the VEC will develop an unemployment insurance resiliency plan to include specific actions taken when claims increase, to address staffing needs, and overall communications. The law requires employers to submit claim-related forms electronically and the Virginia Department of Human Resource Management will lead a multiagency workgroup to address support strategies during emergencies. The VEC’s internal audit division will also review and update online resources related to unemployment compensation.  

As you know from my previous Richmond Reports, we review a lot of bills during the regular session. You can view a more comprehensive list of bills on dls.virginia.gov. 

#1 for Business...Again

As the Virginia General Assembly prepares to return for a Special Session on August 2nd to appropriate American Rescue Plan funds made available to the Commonwealth, we learned that Virginia will also enter the new fiscal year with a substantial surplus in state revenue.

Some of that excess revenue is required to be put set aside in our rainy day and other reserve funds under the Virginia Constitution, and some of it will be available to spend on non-recurring items in the upcoming year.

The Virginia economy is recovering well from the pandemic as vaccination rates continue to climb. Nevertheless, the recovery is uneven, and we will need these one-time funds to ensure our state social safety net is there for our neighbors who won’t be able to bounce back as quickly or suffered more significant hardships during the pandemic.

Given the generally rosy budget outlook, we probably shouldn’t have been surprised that Virginia maintained it’s rating as the number one state to do business according to CNBC’s long running state business rankings.  Virginia is the first state to win the title “Top State for Business” twice in a row (CNBC didn’t issue rankings in 2020 because of the pandemic).

Virginia has ranked #1 five times since the rankings began in 2007– more than any other state.

Now, I haven’t always been one to tout Virginia’s ranking for business friendliness as the most important metric for determining the relative success of state government. To the extent these rankings have, historically, rewarded states with low wages, lots of corporate giveaways, anti-worker policies, weak environmental policies, and limited legal options for consumers. You almost want to be suspicious of states that rank too high.

Since the last set of rankings came out, though, Virginia passed the Clean Economy Act, raised the minimum wage, kicked car-title and payday lenders out of the Commonwealth, gave unions more rights to bargain collectively, passed the Virginia Values Act which includes employee protections from all sorts of discrimination, and made it easier for workers to sue their employers for things like worker misclassification.

So how are we still #1? Let’s dig in a little behind the numbers.

CNBC’s rankings included 85 distinct metrics across 10 competitiveness categories. Some of them are what you’d probably expect: cost of doing business, infrastructure, workforce, access to capital, cost of living, etc.

This year, though, they added some new criteria to reflect what businesses in 2021 care about.

Earlier this week many of us tuned in to watch Major League Baseball’s Home Run Derby and All Start game live from…Denver, Colorado. Seem like a non-sequitur?

All Star Week was originally scheduled for Atlanta, Georgia this year. The MLB pulled out of Georgia earlier this year when players and other stakeholders protested over Georgia’s passing restrictive voting laws.

In announcing their rankings, CNBC made a point of highlighting Virginia’s education system, which helps us to attract and retain an exceptionally talented workforce, and commitment to equity and inclusion. Clearly that was our number one attribute.

They also noted that companies, like Major League Baseball teams, are increasingly vocal in their demands for inclusiveness in the states where they do business, leading to an increase in the importance of this in CNBC’s 2021 competitiveness study, as well as adding metrics on diversity, sustainability, and connectivity.

So, we were able to stay ahead of other states even in a pandemic not only because of our competitive business climate, but also because of progressive legislation that we’ve enacted over the past few years. We’re the first southern state to enact a Voting Rights Act to expand voting rights and access to the polls as well as the Virginia Values Act that ensures comprehensive anti-discrimination laws protect the LGBTQ+ community.

And we didn’t stop there.

We invested in public education and workforce development so that Virginia businesses can recruit workers in Virginia. Since Governor Northam took office, nearly 90,000 new jobs have been created and we’ve invested over $45 billion.

The Get Skilled, Get a Job, Give Back Fund and Program (G3 Fund)​ through the G3 Program provides financial assistance to certain low-income and middle-income students who are enrolled in a higher education program that leads to an occupation in a high-demand field.​ 

Our investments in the highly traveled I-81 corridor and the Port of Virginia are also clearly paying off. Recognizing our commitment to infrastructure, technology, and inclusiveness, companies like Amazon, Facebook, and Micron have chosen to relocate or expand their companies in the Commonwealth.

4/20 Marijuana Legislation

On July 1, 2021 it will be legal for adults in Virginia to possess small amounts of marijuana in their homes.  

The General Assembly met for a one-day session on April 7th to review the Governor’s proposed amendments to 37 pieces of legislation that passed during the 2021 Session in addition to 18 budget amendments. This also included the 280-page bill to legalize the possession and regulate the marketing and sale of cannabis and cannabis products in the Commonwealth.

Some people call this annual session which is always scheduled for the 6th Wednesday after adjournment the “Veto Session.” However, the proper designation is Reconvened Session, because even when the Governor doesn’t veto ANY bills (as was the case in 2021) we still have to get together.

Most of the recommendations were technical fixes or friendly amendments, with the House and Senate accepting almost all of them.  

So, let’s talk about what the final version of the Marijuana bill, with the Governor’s amendments now adopted, does, what it doesn’t do, and what it lays the framework for doing later.  

Starting on July 1, 2021, adults over the age of 21 can legally possess up to 1 ounce of marijuana for personal use. You will also be allowed to grow up to four plants per household, provided that the plants are labeled, not in public sight, and out of the reach of anyone underage.

Possession is still prohibited for those under the age of 21, and it’s still illegal to sell marijuana, smoke it in public, or to have open a container of it in your car.  

Starting on July 1, 2025, arrests and convictions for marijuana possession will be automatically sealed and not subject to disclosure. If you have a felony distribution or misdemeanor paraphernalia conviction on your record, you can petition the court to seal your record.

 

Government Oversight & Regulation

The legislation establishes several entities to oversee the regulation, distribution, and equitable application of this new law.  

It creates a Virginia Cannabis Control Authority to write regulations regarding the possession, sale, and distribution of retail marijuana and related products. A major component of this legislation is to ensure social equity and ensure communities that have been impacted by over-policing of marijuana and drugs benefit from the new marijuana economy legalization will bring about.  

To that end, the legislation establishes the Cannabis Equity Reinvestment Board and Fund, which will receive funding from the fees paid by licensed distributing companies and from the taxes from legal sales. With this, the Board will create scholarship programs and grant funds to support communities disproportionately and historically targeted by drug enforcement laws. Workforce development programs, mentoring programs, job training and placement services, and reentry services are examples of what the Board will develop.  

Starting in July 2023, the Cannabis Equity Business Loan Program and Fund will award low-interest and zero-interest loans to social equity qualified cannabis licensees. The sole purpose is to foster business ownership and economic growth within communities that have been the most disproportionately impacted by marijuana prohibition.

The Public Health Advisory Council, made up of individuals with public health expertise, will advise the Cannabis Control Authority on matters of public health, assessing and monitoring public health issues, trends, and impacts related to marijuana legalization. The Council will make recommendations on retail marijuana products safety, composition, public health awareness, programming, and related resource needs.  

There will also be a Cannabis Oversight Commission, comprised of 10 General Assembly members to provide yet another layer of oversight.

The legislation allows local governments to decide, via referendum, whether or not they will permit retail marijuana stores in their area. These referenda must be held between July 2022 and December 2022.

Forty percent of tax revenue from marijuana sales will go to pre-kindergarten programs for at-risk 3 and 4-year olds, 25 percent to substance abuse programs, and 5 percent to public health programs.

 

What About the Retail?

It will be some time, and a few more legislative sessions (regular and reconvened) before you’ll see a retail marijuana store in our area. The legislation we passed puts us on a path toward providing economic investment and empowerment opportunities to individuals and communities disproportionately impacted by the failed war on drugs. Through criminal justice reform and a focus on social equity, we have a real opportunity to right those wrongs and move forward. Establishing health and safety measures that ensure access to a safe and well-regulated product and implementing public health programs so individuals understand the potential dangers of misuse are a large part of this process. 

The Governor's Budget

It’s going to be a much different year in the Virginia House of Delegates in 2017 with Democrats having secured at least a 50-50 tie in the Chamber pending the outcome of a disputed election in Fredericksburg.

Democrats seem likely to be in a position to insist on a power sharing arrangement that allows us to Chair committees and possibly control the speaker’s gavel. As of this writing many of those details remain to be worked out, but be assured that I will revisit them in upcoming columns as session approaches.

Meanwhile, earlier this week outgoing Governor Terry McAuliffe unveiled his final biennial state budget, and in it, his last and best effort to provide health care to the over 400,000 Virginians who make too much money to qualify for traditional Medicaid coverage and not enough to afford even subsidized insurance in a health care exchange or in the open market by expanding Medicaid in Virginia.

The two-year budget plan relies on savings that will be realized only if we accept the roughly $6 million dollars a day that Medicaid expansion would provide and use it to pay for essential services that we've paid for from the General Fund instead for the last four years.

Two years ago, the Governor introduced a budget that used the savings to be realized from expanding Medicaid to lower the state's corporate tax rate. The thought was that Republicans love a good corporate tax cut more than they hated Obamacare, and that would give them cover to accept Medicaid expansion while doing something that would help McAuliffe lure more companies to Virginia to help diversify our economy.

Only he miscalculated. It turned out Republicans hated Obamacare more than they loved the idea of cutting corporate taxes.

This year the approach is different, and with the new make-up of the General Assembly, which now likely includes at last 50 Democrats, and possibly 51 depending on the result of pending recounts and lawsuits, it just might work.

Overall, things are looking good. Revenue forecasts are looking up and our unemployment rate is down to 3.6% - the lowest in nearly a decade. General Fund collections exceeded the official forecast by more than $134 million. Over the next biennium, the General Fund revenue forecast is just over $42 billion.

The Governor’s top budget priorities are funding vital public services like the Standards of Quality for public education and the existing Medicaid program.

Other highlights from this year's budget include:

• Funding to automate the teacher license application system and to support principal recruitment and retention in our hardest-hit school divisions.
• Updating Virginia’s education formulas including the Standards of Quality, which will add $436 million in education funding over the next two year.
• In the area of workforce development, $1 million in new funding is added to the budget for two-week cybersecurity camps dedicated to exposing high school students to careers in this rapidly growing industry.
• Children can’t learn if they are hungry, so we’ve added $2 million to support our breakfast incentive funding, which has dramatically improved participation in our high-need elementary schools.
• There is $4 million in increased funding for the New Economy Workforce Credential tuition assistance program to address the high demand of students wishing to participate in the program.
• In an effort to make Virginia a little greener, $2 million to support the development of the solar industry in Virginia. $110 million in Commonwealth Transportation Capital Projects Revenue Bonds for mass transit projects in FY 2020 to maintain the state’s commitments to these services.
• In addition to expanding Medicaid, the budget provides Full funding for the revised Medicaid forecast for foster care and adoption programs and Children’s Services Act caseloads as well as funding to support 825 additional Medicaid waiver slots over the course of the biennium for individuals with intellectual disabilities.
• I’m excited about funds that will allow Virginia to continue to make strides in the way we treat people living with Mental Illness in Virginia, including $11 million to begin primary care screening and monitoring at the Community Service Boards, $1 million for the creation and expansion of mental health dockets in jurisdictions with high caseloads, $2.9 million to establish special units and programs for seriously mentally ill inmates and $10 million to support medication-assisted treatment for individuals who seek help with opioid addiction, through our Community Service Boards.
• Finally, the budget includes a 2% raise for state employees, including teachers, law enforcement, and state agency workers.

In year’s past a budget that includes these priorities might have been viewed as Dead on Arrival. With a 50/50 House of Delegates, well, not so fast. Should be an interesting session.