RICHMOND, Va. (AP) — Virginia ended the 2022 fiscal year with a $3.2 billion cash surplus, a sign of both a healthy economy and some overtaxation, GOP Gov. Glenn Youngkin said Friday as he presented lawmakers with a review of the state's finances.
In an interview and in remarks to the General Assembly's money committees, the governor celebrated the state's financial position and reiterated calls for additional tax cuts beyond the approximately $4 billion he signed into law earlier this year. Youngkin announced he planned to propose setting nearly $400 million of the surplus aside as a starting point for tax relief in the next budget cycle.
“Our balance sheet is in a strong position, and our substantial reserve funds have grown sharply from their pre-pandemic levels. Together we are lowering tax burdens and making the critical investments needed to strengthen Virginia,” he said in his speech.
The fiscal-year-end surplus was the result of $2 billion in unplanned revenues and about $1.2 billion in unspent appropriations, Youngkin said. The compromise budget lawmakers passed in June anticipated some of that surplus, so some will be reallocated and some directed to a constitutionally mandated reserve deposit, Youngkin said. That will put the state on track to having nearly $4.3 billion in total reserves by fiscal year 2024.
Youngkin said that still leaves about $400 million that he wants set aside as a tax cut “down payment.” His administration is still working out all the elements of the amendments to the 2022-2024 spending plan he will formally propose in mid-December for General Assembly consideration, he said.
The governor said despite the bright spots in Friday's report, he was concerned that Virginia has yet to recover 119,000 of the jobs shed early in the pandemic, and he condemned federal policies he said have “created” the current inflationary environment.
“I think we’re strong enough to weather it. But there are storm clouds on the horizon we need to be aware of,” he said in an interview with The Associated Press ahead of his address.
Youngkin also used his approximately 25-minute speech to herald accomplishments of his first seven months in office, and he offered a preview of three policy areas he said his administration was committed to tackling: rising violent crime and housing costs, and unmet Chesapeake Bay cleanup goals.
Democratic Sen. Janet Howell, chair of the Senate Finance and Appropriations Committee, said this year's financial report was the best she'd received in her 30 years in the General Assembly. But she said she was concerned that Youngkin's calls for additional tax relief may be premature, given the nation's current economic uncertainty.
“We don’t know what it’s going to be like in several months. Hopefully we’ll be able to do some tax relief, but it’s not necessarily in the bag,” she told reporters after the meeting.
Howell also praised the tone of Youngkin's speech, saying he indicated a willingness to work across party lines with the politically divided General Assembly.
“I respect him for that,” she said.
Other Democrats criticized Youngkin on Friday, suggesting the $400 million the governor wants for tax relief would be better off reinvested into core government services. And some turned to the issue of abortion, warning that if lawmakers pass a 15-week abortion ban, something Youngkin backs, it would harm the state's business prospects.
“What major employer wants to relocate to a state that outlaws women’s healthcare choices?” tweeted Democratic Del. Eileen Filler-Corn.
In the interview, Youngkin ruled out the prospect of lawmakers taking up abortion legislation any sooner than the start of the 2023 regular session in January. Some abortion rights groups have recently raised concerns that lawmakers might consider a ban as soon as a Sept. 7 reconvened session.
Youngkin has tapped a group of lawmakers, all Republicans, who he said he expected would work this fall in a “bipartisan” way to arrive at legislation that has a chance of passing both the GOP-controlled House and the Senate, which Democrats control by the narrowest possible margin.
“I have strongly encouraged them to work towards a 15-week bill. I think that that is a a good place for Virginia to land," he said.
Youngkin, who is increasingly mentioned as a possible 2024 presidential contender, has been recently been ramping up travel across the country to meet with donors and campaign with other GOP candidates for governor.
He said Friday his itinerary hasn't been mapped out beyond an upcoming trip to stump with Tudor Dixon, the Republican nominee for Michigan governor.
As for a potential presidential bid, he said: “My family and I have really not discussed anything to do with that. I’m really focused on the big job that I have at hand."
