Before the General Assembly convened on Wednesday, Hampton Roads got a new Senator. Former Virginia Beach Councilman Aaron Rouse was elected to the Virginia State Senate to fill the seat vacated when Jen Kiggans won a congressional seat last fall.

Rouse’s election is key, because it changes the make-up of the Senate, giving Democrats 22 members and Republicans 18 members. The House of Delegates remains 52 Republicans and 48 Democrats. Traditionally, this would mean the bills that pass both chambers will be bipartisan and some may not be finalized until the end in the conference committees.

Governor Glenn Youngkin gave his State of the Commonwealth Address this week to both Chambers and his Cabinet. In his address he asked for $1 billion in tax cuts, siting a $3.5 billion surplus this year. In Virginia, the Governor introduces his agenda items through his budget and legislation introduced by members in his party. Outcomes on financial items impacting the state’s economy must be agreed upon by the House, the Senate, and the Governor before taking effect.

One of the most significant tax cuts proposed is the corporate tax rate, Youngkin wants to reduce it from 6 percent to 5 percent. This is one of the more controversial proposed tax cuts and while some Democrats have expressed interest, others have said they will never support it.

Youngkin also identified tax cuts for individuals and small businesses. He is asking for a quarter percent tax cut on individual income and an increase in the standard deduction for single filers of $9,000 and those who file as a couple of $18,000. For small businesses he is suggesting a 10 percent tax credit for businesses.

While Republicans are working with the Governor, Democrats in both Chambers have different ideas on what the state should do with the large surplus. Specifically, they would like to see the money invested in education and mental health.

This second issue, mental health, could be the one area where bipartisan support would have an impact by investing more resources and improving the processes of the current system.

The Governor also reiterated his commitment to investing in the Virginia Economic Development Partnership in its efforts to attract new business to the state. One of the key investments is funding mega-site developments like the one proposed in Chesapeake at the Williams Farm.

There are several other topics we are following throughout the Session, including bills impacting energy, education, and affordable housing. Future updates will include information on these bills. In the meantime, you can find out more about legislation we are tracking on the Advocacy tab of the Chamber website.

Contact

Gretchen Heal
Vice President of Governmental Affairs
gheal@hrchamber.com