Governor Glenn Youngkin addressed the Virginia legislature to give details on the Commonwealth’s finances Thursday morning. But Democrats disagreed with the positive outlook the governor presented.
“The Commonwealth of Virginia’s fiscal position is as strong as it's ever been,” Youngkin said in his address to the joint money committees. Among positive signals was what he called the unprecedented amount collected by the state:
“We collectively have run surplus after surplus after surplus, totaling $10 billion in excess revenue.”
The governor said sales and income taxes had both increased, the Commonwealth's rainy day fund balance is up to $4.7 billion, and general fund revenues were up 6%.
“We outperformed in 2025, we’re ahead in 26… $2.7 billion over predictions,” Youngkin said.
The governor’s comments came about an hour after recent inflation reports were updated to show Virginians are paying more at checkout counters than previously believed. And while the state might be in good shape, Delegate Vivian Watts, one of the top Democratic bean counters on the committee, worried that meant Youngkin’s rosy revenue report may be misleading.
“The amount of surplus was so much more than what was typical," Watts said. "I am concerned about whether or not the amount of agency balances are inflated and we don’t have that much going in.”
She also pointed to the pending revenue drops expected once President Donald Trump's federal employee layoffs kick in enforce in the fall. She said the salaries for those jobs were often twice that of earners in the rest of the state.
"Any time we lose jobs in Northern Virginia our revenue takes a double whammy hit because of the amount of income tax we're losing," she said.
Youngkin's Secretary of Finance Stephen Cummings, who presented more details on state revenues after Youngkin's speech, said concerns about inflation were overblown.
"I'm not denying inflation is going to have upward pressure, but I don't think its going to become a real problem," he said.
As for federal employees, Cummings said the "fork-in-the-road people," those who took buyouts but remain on the payroll until the fall, will "show a dip" then.
But Republican Senator Mark Obenshain chalked such criticism up to political rhetoric during an election year when all 100 House seats, including Watts’, are up for grabs.
“We’ve never been in a stronger position here in the Commonwealth of Virginia," Obenshain told Radio IQ. "I think its great, my Democratic colleagues think it’s terrible.”
As for expected fallout from President Donald Trump’s cuts to the federal government, Youngkin said the cushion he and Democrats agreed upon in this year's budget had grown to $1.7 billion since the spring and that could fill in financial holes in the 2026 budget.
Youngkin also addressed a recent executive order aiming to address issues with the state's SNAP program following changes from Congress in the One Big Beautiful Bill. Starting October 1, 2027, states with error rates above 6% must participate with a match; According to Youngkin the Commonwealth's current rate is 11.5%.
"And so that really gives us a full year to get to work to get the error rate down and in fact, if we get the error rate down to the right level the state share could be zero," he said, suggesting state funds could be spent to help locally run SNAP programs run better.
But Democratic Senator Barbara Favola reiterated concerns she had with changes to SNAP when they were first discussed earlier this year.
"We're just making it more difficult to apply and then putting money into administrative overhead rather than the programs," she warned.
Thursday's committee meeting also likely put to bed any rumors about a special session of the Virginia legislature before the 2026 session.
Concerns about Trump's funding cuts from fed into the idea that the state might need emergency action before the end of the year.
But continued uncertainty from the White House and an unmaterialized plan to redraw Congressional districts in the face of national redistricting discourse, led Senate President Louise Lucas to suggest otherwise.
“I never wanted a special session for anything else but when we started to talk about redistricting, I thought there might be some consideration," Lucas told Radio IQ. "But we don’t have a replacement plan.”
Youngkin was similarly uninterested in a special session.
“Whether they come back or not, that’s their decision, but I have to say I think that decision might be driven by something else rather than the necessity of coming together,” the Governor said.
Youngkin and Lucas made the comments after the term-bound governor’s final address to the legislature’s money committees. He’ll make one final appearance before the state’s financial committees in December where he’ll announce his outgoing budget.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
