State lawmakers say budget deal is still possible, after talks break down

RICHMOND, Va. (WDBJ) - It’s now clear that July first will arrive without a deal on the state budget.

House and Senate negotiators remain at odds over amendments to the two-year spending plan. And right now, there’s no indication of when they might come to an agreement.

Botetourt Co. Delegate Terry Austin, a Republican, and Charlottesville Sen. Creigh Deeds, a Democrat, have both been at the table for the budget discussions.

And although talks broke down this week, both say they remain optimistic they can reach agreement if budget conferees will return to the table and negotiate in good faith.

The standoff is having an impact at the local level.

We asked leaders in the Alleghany Highlands during an economic development announcement there Wednesday.

“The biggest impact is we don’t know exactly what to plan on,” said Covington Mayor Tom Sibold. “We can guess, but we’re not sure how much money we’re going to end up with.”

“Nobody likes uncertainty, and especially dealing with budgets and final numbers,” added Alleghany Board of Supervisors Chair Matt Garten.

There’s no threat of a state government shutdown. The two-year budget the General Assembly passed last year remains in place. But $3.6 billion in additional spending hangs in the balance.

The major sticking point appears to be tax policy, and the extent to which Virginia should implement on-going tax cuts.

“The Governor’s asked for quite a bit of tax relief, and I support that tax relief,” Austin told WDBJ7. “You know we’re in unprecedented times of revenues and we have the ability to return dollars to the taxpayer.”

But Democrats say permanent tax cuts are unwise, at a time of economic uncertainty.

“And it will leave Virginia in structural imbalance,” Deeds said in an interview Thursday, at a time when we have huge unmet needs in the areas of K-12 education and higher education and mental health.”

They prefer one-time tax cuts, including taxpayer rebates.

“We will not agree to permanent tax cuts. We will agree to rebates,” Deeds said.

Both men said they believe a deal is still possible.

“We very much need a budget and I think both sides agree to that. We’ve just got to find a compromise in the middle,” said Austin.

“We have a responsibility to get the budget done and we need to be able to return to the table and hammer out our differences and get a deal done,” Deeds said.

Right now, it’s unclear when that might happen, but we’re hearing reports that Gov. Youngkin is considering calling a special session during the second week of July in an effort to break the current stalemate.

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