Governor Glenn Youngkin Delivers Address on Fiscal Year 2025 to Joint Money Committee

Governor Glenn Youngkin told the General Assembly’s Joint Money Committees on August 14, 2025, that Virginia’s books are as strong as they have been in his term, and that the next budget should protect the policies he says produced the surplus.

Speaking a month into fiscal 2026, he thanked Chairs Lucas, Torian, and Watts, Lieutenant Governor Earle Sears, his cabinet, and First Lady Suzanne Youngkin, and framed the update around four claims. First, the commonwealth’s fiscal position is as strong as it has been. Second, revenue above plan in fiscal 2025, another beat in July, and unspent balances produce a $1.7 billion cash cushion going into fiscal 2026, enough in his view to hit the second year of the biennial budget. Third, business investment and job growth are the base of that strength, so the state should keep deregulation, right-to-work, site development, and workforce programs, and avoid the anti-business choices he says are hurting other states. Fourth, several worries from earlier in the year have faded, though a smaller federal workforce remains a risk against roughly 250,000 open jobs in Virginia.

He said the administration and the legislature had run surplus after surplus, about $10 billion in revenue above expectations over the term. Carry-over balances reflect money appropriated but not spent. Incremental borrowing capacity is about $1.3 billion a year. The rainy-day fund stood at $4.7 billion at the end of fiscal 2025. The AAA credit rating was reaffirmed even as Maryland and the District of Columbia were downgraded, which he treated as proof that management, not geography, drives the rating.

The fiscal 2025 beat was nearly $2.7 billion above the original forecast, and about $572 million above the $2.1 billion already recognized in the spring reforecast. General-fund revenue grew more than 6 percent. July, the first month of the new year, was up 7.3 percent from a year earlier and about $145 million over projection. Sales taxes were 2.2 percent higher. Individual income taxes rose 7.8 percent in 2025. Corporate income taxes fell 1.5 percent. As of August 1 the cash cushion was $1.7 billion. Meeting the fiscal 2026 plan, he said, requires only $127 million of additional growth, or 0.4 percent, above fiscal 2025 collections of $31.2 billion.

Youngkin tied the surplus to a “both/and” budget: record spending on public safety, health and behavioral health, and schools, alongside what he totaled as $9 billion in tax relief and a 25 percent cut in regulations that he said saves taxpayers $1.2 billion a year. He said the state had secured more than $125 billion in capital commitments for factories, headquarters, research centers, and distribution buildings, and that Virginia has about 265,000 more people working than when the term began. About 15,000 high-growth startups opened in three years. The investment pipeline, he said, supports another 80,000 jobs. In 2023 the state reversed a decade of net out-migration to other states.

He pressed localities that have been slow to offer incentives to join the Virginia Economic Development Partnership, the Department of Energy, and the Department of Housing and Community Development. Southwest Virginia, he said, had absorbed Hurricane Helene’s damage to farms and forest land. Virginia was one of only two states to sign U.S. Department of Agriculture block grants that will begin paying farmers and forest owners the following month. He called agriculture and forestry the state’s first- and third-largest private industries.

The warning section of the speech was about power and federal programs. Youngkin said the Virginia Clean Economy Act is not working: bills are high, the state imports too much electricity, compliance costs of $5.5 billion are projected to reach ratepayers over ten years, and baseload capacity will not match demand. He asked lawmakers to unwind the act. Of about $2.5 billion in federal grants and programs paused during the year, he said $2.1 billion was flowing again. Of the remaining $420 million, about $300 million was COVID funding already set to expire.

He said December’s budget would deal with Medicaid and SNAP changes. Two executive directives issued the day before the speech aim at federal rural-health transformation funds and at SNAP error rates. He said Virginia could receive at least $500 million and possibly $1 billion for rural care. He insisted Medicaid changes do not remove anyone’s coverage. Beginning in 2027, able-bodied adults without dependents would have to work, attend school, or do community service for 18.5 hours a week, or 80 hours a month, to stay eligible. SNAP error rates, high for nearly a decade and driven in part by local administration, will require a state match starting in 2027 unless localities bring the rate down.

The address closed by asking the money committees to carry the same approach into the next biennium: sites, workforce, right-to-work, and no new mandates on business. The cash position he described is the number legislators will test when his December bill arrives.