Youngkin tweaks state budget with eye on federal cuts, but embraces key spending

With just hours to spare before the midnight deadline, Gov. Glenn Youngkin on Monday unveiled his proposed amendments to the revised state budget, signaling his acceptance of many Democratic priorities while carving out space for his own brand of fiscal conservatism.

Youngkin embraced key pieces of the $188-billion budget passed by the Democratic-controlled General Assembly with bipartisan support last month — namely, $1.1 billion in tax relief, bonuses for public employees and increased investments in education. 

But his last-minute edits made clear where he draws the line: preparing for more federal layoffs by President Donald Trump’s administration; resisting new spending mandates; and rebuffing key progressive wage reforms.

Speaking before administration officials and reporters in Richmond, Youngkin doubled down on his warnings about looming federal spending reductions by the White House, which he said are both necessary and imminent.

Youngkin defends federal job cuts, says Virginia’s economy is strong

“The president is taking decisive actions to restore the fiscal responsibility of America and remove the long-term threats that $37.5 trillion of debt and running $2 trillion deficits causes,” Youngkin said. “It does realistically cause us to stop and say while we have confidence, there are risks.”

Those risks, he stressed, include possible layoffs in Virginia’s federal workforce.

“Let’s prepare for them, let’s prepare for risk around potential federal worker layoffs with a pathway for new jobs, different jobs, new careers,” he added, emphasizing the state’s “vibrant job market” as a cushion.

To that end, Youngkin trimmed $300 million in spending from the budget adopted by lawmakers and redirected it to the state’s revenue reserve. “We are prepared,” he said. 

“The significant reforms under President Trump’s agenda in fact promised long term opportunity for the commonwealth of Virginia. And I will tell you that anyone who believes that significant change doesn’t come with near term uncertainty hasn’t been through significant change.” 

Democrats were quick to criticize Youngkin’s actions — particularly his continued alignment with Trump-era austerity measures. 

House Speaker Don Scott, D-Portsmouth, accused the governor of capitulating to Trump and billionaire interests. 

“Trump is destroying Virginia’s economy, hurting workers, decimating healthcare and our schools,” Scott said. “We need a governor who will support Virginians, not cave to Trump and (Elon) Musk.”

Scott defended the General Assembly’s budget as one that “stands up to Trump,” highlighting its substantial investments — $782 million for K-12 education, $134 million in teacher bonuses, $55 million to reduce tuition costs, and major funding for housing initiatives. 

The budget also includes tax rebates of $200 for individuals and $400 for joint filers, as well as expansions to the Earned Income Tax Credit, which together could return over $1,000 to low-income families.

Still, it was Youngkin’s veto of a proposed minimum wage increase that sparked backlash from progressive advocates.

Youngkin vetoes minimum wage hike, prescription affordability board bills

House Bill 1928 would have raised the state minimum wage incrementally to $15 per hour by 2027 — starting with a hike to $13.50 in 2026, and $15.00 the following year. The bill would have codified the adjusted $12.41 hourly rate already that took effect in January, and charged the Commissioner of Labor and Industry with adjusting the wage moving forward.

Youngkin rejected the measure outright, a move critics say denies a raise to hundreds of thousands of Virginians.

Despite the controversy, Youngkin’s amendments did include broad support for key Democratic spending priorities. 

He backed $450 million in new public education funding, including $85 million to lift the cap on non-instructional school staff and $52.8 million to support students with disabilities. He maintained $25 million for Virginia Opportunity Scholarships and trimmed — but kept — funding for lab schools at $15 million.

On public safety, Youngkin reinstated language requiring localities to cooperate with U.S. “We’re not a sanctuary state,” he said. “Therefore we are not going to support localities that are declared sanctuary cities.”

His amendments also provided $50 million in disaster relief for flood-affected areas of Southwest Virginia, an additional $50 million for the Community Flood Preparedness Fund, and maintained $50 million for Richmond’s sewer overflow project. 

He further included language to explore designating Oak Hill — the historic home of President James Monroe — as a state park, and restored funding for the creation of a Virginia Gaming Commission to regulate the growing gambling industry.

The budget maintains $720 million in general fund support for Medicaid and CHIP, ensuring coverage for Virginia’s most vulnerable residents, with a total $53 billion in combined federal and state spending on health care.

Secretary of Finance Stephen Cummings highlighted Virginia’s economic growth under Youngkin, noting that the state has added 276,400 jobs since January 2022. 

With total employment reaching 4.6 million, he said, “employment was at the highest in Virginia history.” Cummings also pointed to a surge in business investment, citing $102 billion in announced capital projects expected to generate 70,000 new jobs across the commonwealth. 

“So some brilliant, amazing things have been done in this area of economic development,” he said.

With lawmakers returning next week for the General Assembly’s veto session, Youngkin’s budget amendments now head to a Democratic legislature that may seek to revise or reject some of his changes. 

Whether his proposals — such as increased reserve funding, the removal of minimum wage language, and restored immigration enforcement provisions — will stand as submitted remains to be seen.

“I’ll sign most of the bills. I will amend others, and yes, I’ll veto some,” Youngkin said of the 916 bills and 515 budget amendments he reviewed from the legislature.

He added that as of the morning, he had already signed 35 bills and would complete action on all legislation before the midnight deadline.