Virginia Governor Cuts $900 Million in Budget to Blunt Tariffs

Virginia Gov. Glenn Youngkin (R) announced he cut about $900 million from the state’s amended 2024-2026 budget to “cushion” against short-term risks to state tax revenues from President Donald Trump’s spending cuts and tariffs.

Youngkin late last week announced he was signing the amended biennial budget (HB 1600) passed by the General Assembly that includes $1 billion in tax relief, $1,000 bonuses for teachers, and 1.5% bonuses for state employees.

The governor said, however, that he had exercised his line-item veto power to cut 37 provisions worth a total of about $900 million. This will serve as a “cushion” against revenue lost as a result of Trump’s economic policies, and will mostly affect infrastructure projects at public colleges and universities, Youngkin said.

Virginia passes budgets in two-year blocks, but the legislature and governor can amend the budget as economic environments change.

While the governor praised Trump’s “rebalancing” of trade relationships, he also said retaining the money in the state’s budget to offset any lost revenue collection was “prudent, sound budgeting” to protect the Commonwealth.

“As we know, the president’s actions to reset fiscal spending and reset unbalanced trade relationships are expected to have some impact in the near-term on not only the Virginia workforce, but also therefore the revenues we collect,” the governor said.

The budget’s $1 billion in tax relief will result in $200 rebate checks to Virginians filing individually and $400 to people filing jointly.