Virginia Republican Gov. Glenn Youngkin said during a presentation to state lawmakers Thursday the Commonwealth’s economy continues to grow and will end the fiscal year with a healthy surplus and billions in a rainy day fund for the state.
“Virginia is as financially strong as she has ever been,” Youngkin said. “The outperformance we saw in FY 2025, and see again in the first month of 2026, combined with carry-over balances from 2025, creates $1.7 billion in cash cushion as we head into fiscal year 2026.”
Youngkin said Virginia’s economic development, business investment, and job growth are the foundation for the state’s fiscal success, further noting that deregulation, protecting right-to-work, and investing in business-ready sites and workforce development must be championed.
In total, revenues for the fiscal year created a $572 million surplus and a $4.7 billion rainy day fund. Economic output grew about 1% higher than what was previously forecast, according to officials.
Youngkin acknowledged reductions in the federal workforce due to budget cuts from the Trump administration and the Department of Government Efficiency, which disproportionately affects the Virginia workforce, but added that the same workforce will “find new opportunities.”
“Many of the concerns expressed earlier this year have receded,” Youngkin said. “Some do persist, such as the expected reduction in the federal workforce and how quickly these Virginians will find new opportunities in the Commonwealth’s deep well of available jobs, which is currently estimated to be roughly 250,000 available and unfilled positions.”
But Democratic Senate Majority Leader Scott Surovell, pushed back against Youngkin’s comments, arguing the number of federal workers losing their employment is skewed because many of them don’t actually leave their positions until the end of September.
“Now we’ve got Trump inflation…Northern VA’s real estate market is starting to crater, and that’s the engine of this state’s economy,” Surovell said. “And so, while you might think the Commonwealth’s strong, there are a whole lot of red flags on the horizon”
Still, Youngkin is optimistic about the commonwealth’s future under new federal legislation making various changes to social safety net programs. He said changes to Medicaid will not result in Virginians losing their coverage.
“Not a single Virginian is losing access to Medicaid or getting kicked off the program,” Youngkin said, countering claims to the contrary. “Not 40,000 Virginians. Not whatever number some are saying on a given day. No Virginians are losing their Medicaid coverage.”
The Governor said Medicaid was not meant to be permanent health care coverage for able-bodied people capable of working but was instead designed to take care of the elderly, those living with disabilities, and families with children who are below the poverty line.
Beginning in 2027, Youngkin said able-bodied people without dependents will have to work, study, or engage in community service for at least 18.5 hours a week to be eligible for Medicaid.
“I believe this is fair,” Youngkin said. “And it will ensure we strengthen and protect the program for the people it was designed for, but it also opens up an avenue to dignity. To get a job, to go to school, or volunteer in our communities.”
While exact numbers are not yet available for Virginia, the Center on Budget and Policy Priorities estimates between 10 and 15 million people currently on Medicaid nationwide risk losing coverage by 2034 under the reconciliation legislation Republicans are pushing that includes a Medicaid work requirement.
Youngkin also noted that Supplemental Nutrition Assistance Program (SNAP, or food stamps) error rates in Virginia are too high.
Youngkin this week issued an order outlining a series of steps the state must take to lower its error rates, currently at more than 11%, to 6%. The steps include encouraging local agencies to adopt best practices, better job training and more extensive verifications. Virginia has until October of 2027 to lower its error rates or risk having to assume some of the fiscal responsibility for SNAP benefits from the federal government, according to WAVY.
“The strength and success we see today is no accident. It is the result of very intentional decisions made by all of us — intentional decisions to lift up opportunity in the Commonwealth of Virginia,” Youngkin said. “And these decisions are yielding dividends. They’re enabling us to compete and to win.”
