Dear Friend,
I am writing to update you on the status of the state budget. On Monday, the House and Senate passed a state budget for FY27 and FY28. It now heads to the Governor’s desk for her consideration.
As you are aware from media reports, the General Assembly adjourned its regular session in March without passing a state budget. While we appear to have avoided a government shutdown, the delay did cause unnecessary confusion and angst for local governments and some state agencies who were waiting to adopt their own budgets.
Budgets are long, complex documents that include both good and bad. Ultimately, I decided to vote against the budget based on feedback I received from constituents in our district. My biggest point of contention with this budget was the lack of significant, meaningful tax relief for Virginia families. Our state has ample revenues. We can cut taxes all while ensuring robust funding of schools, roads, and public safety. Nevertheless, state spending will grow by over $3 billion next fiscal year.
Other highlights of the budget that I disagreed with include:
- A pay raise for state legislators effective 2028
- Cutting $9 million from the school resource officer (SRO) grant fund
- Eliminates funding for Project Ceasefire, a data-driven gun violence prevention program, and shifts it to a new division at the Office of the Attorney General designed to sue the federal government
- Establishment of legal retail market for recreational marijuana (this did not belong in the state budget)
Locally, the budget shortchanged the Shoosmith Landfill matter. Initial projections from the state indicated that $50 million would be needed over the biennium to stabilize the site and construct a treatment facility. The budget adopted today only includes $10.6 million in funding. This seems to be just enough funding to prevent the situation from getting worse. I will have more to say on this issue in the coming weeks after my next meeting with state officials.
As has been widely discussed, data centers have been the main point of contention in budget negotiations. The sales and use tax exemption remains in place. Instead an energy consumption fee will be instituted for this biennium only, with a cap of $600 million in revenues. I expect the data center tax issue will be one of top issues of the 2027 legislative session.
In fairness, there are a number of aspects of the state budget that I appreciate. Teachers and state employees are expected to get raises. Virginia’s revenues are so strong that, in my opinion, we could have offered these raises while still cutting taxes across the board.
Now that the General Assembly has passed the budget, the Governor will review it. I will keep you posted on the latest developments as they occur.
Sincerely,
Mike Cherry