Virginia General Assembly:

Adopts a New State Budget

The General Assembly returned to Richmond on June 1 to adopt a new biennial (FY 22-24) budget. It is a mix of significant investments and tax cuts.

The $165 billion two-year budget – including $61 billion in state revenues and $104 billion in pass-through federal funds – is a record amount and set the stage for prolonged debate on how much to invest versus how much to return to taxpayers. State revenue growth – chiefly driven by state sales taxes, corporate income taxes, and payroll taxes – remains robust as Virginia’s economy continues rebounding from the pandemic. The state’s economic outlook is healthy.

In the new state budget, here’s a look at major water, wastewater, and stormwater investments:

• Drinking water projects for small and disadvantaged communities
  • $50 M
• Septic System Improvements; assistance for low-income homeowners
  • $5.7 M
• Water Quality Improvement Fund                                         
  • $313 M
• CSO funds for Alexandria, Lynchburg, Richmond                 
  • $165 M
• American Rescue Act Plan funds for specific water, wastewater, and sewer projects in 12 localities                   
  • $87.9 M
• Stormwater Local Assistance Fund
  • $25 M

The budget also includes $320,000 for the Department of Environmental Quality for continued PFAS surveillance in groundwater and surface water. It also includes $60,000 for the Virginia Department of Health’s workgroup examining public drinking water contaminants.

The budget makes other robust investments in K-12 education, colleges and universities, and transportation.

In terms of tax-payer relief, the budget includes $3.8 billion in tax cuts.

The General Assembly-passed budget now goes to Gov. Glenn Youngkin for review. The governor will offer his own amendments to the budget, which the legislature will consider in the weeks ahead.

The new biennial budget will go into effect July 1.

A Look Back: ARPA Funds Spent on Water, Wastewater

The American Rescue Act Plan (ARPA) was passed and signed into law in March 2021. It sent $1.9 trillion to the states to help state and local governments, businesses, and residents continue recovering from the COVID pandemic. Virginia received $4.3 billion in ARPA funds. Virginia has invested more than $184 million in water and sewer projects across many localities. Additionally, Alexandria, Lynchburg, and Richmond received $165 million to assist in their mandated combined sewer overflow projects. There remains nearly $21 million in unappropriated ARPA funds.