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The Virginia budget has been amended and sent to the governor for his signature. But aside from the multiple bills we already covered this session, the budget itself will affect residents in a number of ways, if it’s signed into law as is. There are additional funds for schools, bonuses for teachers and some tax rebates for taxpayers. Here’s the details from the budget as it stands today. 

First off, let’s talk about taxes. Specifically, the amended budget includes an estimated $1.1 billion in tax cuts, both one-time and ongoing. 

“Most of that money is centered around tax rebates in the amount of $200 for single filers and $400 for married filers,” said Virginia Sen. Creigh Deeds. He’s a member of the Senate Finance Committee that helped negotiate the amended budget. “We increased the refundable Earned Income Tax Credit and increased the standard deduction for the next two years.” 

The standard deduction in this budget would increase to $8,750 for individuals and $17,500 for those filing jointly. Deeds is also referring to the refundable portion of the Earned Income Tax Credit (EITC), which increases in this budget to 20% of the federal credit. That would take effect in Fiscal Year 2026. 

Deeds also pointed to changes in Medicaid funding, broken down over four areas. That includes $10 million more starting in Fiscal Year 2026 to provide operating support for nursing homes, $6.9 million to expand Medicaid coverage for weight loss drugs based on criteria linked with the state employee health program, $1.6 million for Medicaid to cover help for those with brain injuries and $1.1 million to increase Medicaid rates for substance abuse disorder services. 

What about the schools? 

And yes, teachers, you will be getting a bonus this summer, if this budget gets signed into law. 

“The budget provides one-time bonuses in June for teachers, this is in addition to the 3% raises that we adopted last year,” Deeds said. “Our state employees will receive an additional 1.5% bonus.” 

That’s a $1,000 bonus for teachers, which would be paid out no later than June 30. That would go out to “funded instructional and support personnel with no local match required.” And no, you didn’t read that wrong. Part of this amended budget involves allocating money to fully cover the one-time payments like teacher bonuses, instead of asking cities and counties to help cover part of the cost as in previous years. 

Overall, the budget includes more than $600 million extra for K-12 education. School districts that are starting or in the middle of construction projects can apply for an extra $310 million in grant funding. That will be spread out over the next two years, with $155 million in the 2025-26 budget and $155 million in the 2026-27 budget. Deeds said that extra funding comes as a result of casino tax revenues.  

This budget also addresses an issue that hit local school districts last year. In the 2024 special session, the Assembly promised an increase in free and reduced lunches for students. The problem is that no money was allocated for the order, so in those districts where the change took place, local cities and counties had to cover the cost. This time around, the state will provide $2.5 million in Fiscal Year 2025 and $2.7 million in Fiscal Year 2026 to pay for it. 

The budget also provides $52.8 million, a 10% increase for special education students, to help cover basic aid. It also has $25 million for a public-private early childhood care partnership, where the cost of childcare is shared by parents, employers and the state. 

When will tax rebates arrive?

But as mentioned earlier, there is still one step to go. While the Assembly overwhelmingly passed the budget, it hasn’t been signed yet by Gov. Youngkin. He could do that, he could veto the bill outright or he could request changes, which would take place in a special session in April. 

On Saturday, Youngkin didn’t say which way he was leaning, only that there’s still work to be done. 

“This General Assembly is sending me a multitude of bills, including a budget, and over the next 30 days I will go to work to review and take action on those bills and budget,” Youngkin said. “We will have much to address at the reconvene session, but I remain grateful for the hard work of our General Assembly members and their staffs.”