Money Committees Release Budget Proposals

The House Appropriations and Senate Finance and Appropriations Committees met on Sunday to report their respective budget proposals.  Further details on both budgets will be available later today, and VACo will be providing more analysis later this week.  Overall, the two budgets are in accord on several major items, including tax relief proposals and the lifting of the K-12 “support cap,” a long-sought priority for VACo, and VACo’s top budget request for 2025.  Letters requesting this funding and thanking legislators for their efforts can be found here and here respectively.  The full House and Senate will vote on their respective budget proposals on Thursday, and the budgets will be placed into conference by Wednesday, February 12.

Key features of the committee budgets:

Tax relief

  • House Appropriations and Senate Finance and Appropriations: Both budgets increase the standard deduction by $250 for single filers and $500 for joint filers, bringing the deductions to $8,750 and $17,500, respectively. Both budgets increase the refundability of the Earned Income Tax Credit to 20 percent of the federal credit.  Both budgets also propose an income tax rebate of $200 for individuals and $400 for joint filers, to be issued by October 15.

K-12

  • House Appropriations and Senate Finance and Appropriations: Both budgets provide $222.9 million in FY 2026 to functionally eliminate the current cap on recognition of support positions in the K-12 funding formula; the Senate Finance and Appropriations budget funds a staffing ratio that recognizes prevailing practices, and the House Appropriations budget eliminates the budget language establishing the ratio.
  • House Appropriations and Senate Finance and Appropriations: Both budgets provide $52.8 million in FY 2026 as an add-on to basic aid for special education students.
  • Senate Finance and Appropriations: Based on the Education Subcommittee Chair’s remarks on Sunday, the Senate Finance and Appropriations budget expands to all localities the authority to impose a local sales tax of up to 1 percent to support school capital needs, after approval via referendum.

Compensation for Instructional and Support Positions

  • House Appropriations: Provides $140.5 million for a one-time $1000 bonus payment for state-supported instructional and support positions, with no local match required. The bonus would be provided September 1.  Language provided on Sunday would allow school divisions to determine the amount of bonus per employee to maximize the use of the funds to promote retention among instructional and support positions.  No local match would be required.
  • Senate Finance and Appropriations: Provides $134.4 million for a one-time $1000 bonus payment for state-supported instructional and support positions, with no local match required. Language provided on Sunday would allow school divisions to determine the amount of bonus per employee to maximize the use of the funds to promote retention among instructional and support positions.  The bonus would be provided no later than June 1.

Compensation for State and State-Supported Local Employees

  • House Appropriations: Includes $55.6 million for a 1 percent bonus for state and state-supported local employees, to be included in the December 1 paycheck.
  • Senate Finance and Appropriations: Includes $83.1 million for a 1.5 percent bonus for state and state-supported local employees, to be included in the June 16 paycheck.

Health and Human Resources

  • House Appropriations: Removes the proposal in the introduced budget to cap the state’s contribution to the Children’s Services Act for private day services when rates increase by more than 2.5 percent year-over-year. Inserts reporting language regarding students’ transition from private placements to local school divisions.
  • Senate Finance and Appropriations: Retains cap on growth in CSA private day services as proposed in introduced budget. Reflects $9.9 million in savings in FY 2026 attributable to the cap; explanatory material provided on Sunday indicates that these funds are to be redirected to special education services.

Natural Resources

  • House Appropriations: Provides $50 million in FY 2025 to the Stormwater Local Assistance Fund.
  • Senate Finance and Appropriations: Provides $40 million in FY 2025 to the Stormwater Local Assistance Fund.

Transportation

  • House Appropriations and Senate Finance and Appropriations: Both budgets provide an additional $3.3 million in FY 2025 in updated operating assistance for the Washington Metropolitan Area Transit Authority.

VACo Contacts:  VACo Legislative Team

Share This
Recent Posts
Categories