Virginia lawmakers approve budget, but Governor warns that changes will be needed

Virginia lawmakers wrapped up their 60-day Legislative Session Saturday by approving a two-year budget that includes pay raises for teachers and state employees, increases education funding and extends the state sales tax to cover digital services.

Notably missing was language that would have helped Republican Gov. Glenn Youngkin achieve one of his top priorities: a $2 billion development district with a new arena to lure the NBA’s Washington Wizards and the NHL’s Washington Capitals to Alexandria and give Virginia its first major pro sports teams.

The Democratic-led General Assembly rejected the proposal through two standalone bills, then refused to approve language in the state budget that would have paved the way for the project.

Youngkin, who touted the arena project as a potential economic boom for Virginia, could still revive it by calling a Special Session to start over with a new bill.

Democratic Sen. L. Louise Lucas of Portsmouth, who used her position as chair of the Senate Finance and Appropriations Committee to keep the deal out of the budget, said she opposed the project largely because of its reliance on bonds backed by the state and city governments.

This year’s Legislative Session is the third since Youngkin took office, but it’s the first time he has had to work with both a Senate and House of Delegates controlled by Democrats.

Some Democrats complained throughout the session that Youngkin was unwilling to compromise.

“He’s going to find out that he has to treat us like equals,” Senate Majority Leader Scott Surovell said. “He has to treat us with respect. He’s going to have to negotiate with us and not dictate to us.”

Youngkin made it clear he is not happy with the budget, calling it “backward” and saying it needs “a lot of work.”

The budget approved Saturday excludes many of the priorities Youngkin included in a proposal he submitted in December. Lawmakers stripped out his proposal to lower income tax rates and raise the sales tax but did include his proposal to expand the sales tax to cover digital services, including purchases of streaming subscriptions, cloud storage and online downloads.

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