Toplines from Virginia FY2027-FY-2028 Budget

Affordability

• Increases the standard deduction from $8,750 for single filers and $17,500 for joint filers to $9,200 for single filers and $18,400 for joint filers in tax year 2027 and $9,300 for single filers and $18,600 for joint filers in tax year 2028 until tax year 2030.
• Makes the earned income tax credit 20% refundable through 2030.
• Establishes and funds a program to reduce ACA premiums for those between 138-250% of the federal poverty level.
• Directs 45% of Regional Greenhouse Gas Initiative (RGGI) auction proceeds directly to low-income residential utility ratepayers as direct energy bill rebates.

Education

• Funds the state share of a 4% raise for teachers in FY27 and FY28.
• Provides $60 million in flexible per-pupil spending for school divisions, $28.9 million for at-risk student populations, and $148.4 million for special education.
• Provides $194 million to advance higher education affordability.
• Allows localities to call for a referendum to adopt a 1% sales tax to fund school construction and/or public transportation for Northern Virginia localities.
• Creates and funds a new panel to develop a new K-12 funding formula.
• Provides $25 million for a public-private childcare pilot program.
• Increases the school breakfast reimbursement rate.
• Allocates targeted state aid increases to public schools for English language learners and regional special education tuition costs.

Environment

• Creates a Data Center Electricity Consumption Tax to start making data centers pay their fair share and directs the Joint Subcommittee on Tax Policy to make recommendations on the sales and use tax exemption.
• Requires the Department of Environmental Quality to establish water and noise standards for data centers, and directs the State Corporation to collect data on energy, water, and generator use of data centers.
• Provides $25 million to support weatherizing the homes of low income Virginians, $10 million for the Virginia Clean Energy Bank to support the deployment of clean power generation and advanced energy infrastructure, and $188.9 million for the Water Quality Improvement Fund.
• Initiates a study on the Atlantic menhaden population to inform an evidence-based harvest cap.
• Authorizes Oak Hill, James Monroe’s estate, as a new state park in Loudoun County.

General Government

• Creates an adult-use cannabis retail market starting July 1, 2027.
• Establishes a federal funding uncertainty fund to mitigate future actions by Congress with impacts on Virginia’s budget.
• Provides a 3.5% salary increase for state employees and state supported local employees.
• Provides $1 million to improve accessibility at Freedom House in Old Town Alexandria.
• Provides Virginia’s share of funding for the Talent Capital Initiative, a regional platform connecting job seekers and employers.

Health and Human Resources

• Establishes and funds a program to reduce ACA premiums for those between 138-250% of the federal poverty level.
• Increases funding for free clinics and federally qualified health centers like Neighborhood Health.
• Increases rates and services for developmental disability waivers.
• Strengthens public health services to fill in gaps created by the Trump administration.
• Provides $44.3 million to increase Medicaid personal care rates.
• Provides $235 million to protect SNAP benefits in response to HR1.
• Supports the implementation of a single Medicaid Pharmacy Benefit Manager to reduce prescription drug prices for those on Medicaid.
• Accelerates raises for home-care workers.
• Creates a firefighter cancer screening grant program.

Housing

• Dedicates $60 million to the Virginia Housing Trust Fund and $11.5 million to the Virginia Eviction Reduction Program.
• Directs state backstop funding to mitigate federal housing grant cuts and protect regional permanent supportive housing and shelter programs in Northern Virginia.

Transportation

• Provides $153 million in operating support for the Washington Metropolitan Transit Authority Operating Support.
• Waives the 3% cap on WMATA annual state operating assistance growth to prevent regional transit service cuts or fare increases.
• Supports Virginia Railway Express (VRE) platform and rail corridor enhancements along the I-95/US-1 commuter corridor connecting Northern Virginia to Washington, D.C.
  

Additional Resources

Conference Report: Link

Summary Slides: Link