Joint Money Committee Speech

As Prepared for Delivery

Governor Glenn Youngkin Joint Money Committee Speech

August 14, 2024

Good morning.

Chairs Lucas, Torian, and Watts, members of the General Assembly, staffs of the Joint Money Committees: thank you for the warm welcome. I am privileged to join you once again in the beautiful new General Assembly Building.

We've had many conversations over the past few years, and I want to thank you all for your diligent work on behalf of the 8.7 million Virginians we serve.

To start, let me summarize where we are.

What we are doing is working. Over our roughly two and half years together, we've been able to provide record tax relief, invest record amounts in critical priorities including education, public safety, and behavioral health, grow jobs in a record amount, attract record investment from employers, and as a result, have record revenue for the state.

The gameplan we are running works....ultimately unleashing opportunity across Virginia.

Going forward, we must continue to compete.

At the core, we have resisted the false narrative of "either/or" and embraced "both/and."

Importantly, our success has not just enabled both tax relief and record investments in critical areas; our success is the result of, driven by, fueled by Both tax relief and record investments.

Therefore, we must continue to execute the playbook, and not take all of our excess revenue and spend it. We should return a fair share to those who've earned it. It's not the Governments money, it's Virginians' money.

And yes, we've proven we can and should continue to invest in critical shared priorities.

If we continue on our current path, Virginia will continue to accelerate. If we don't, Virginia will fall behind, again.

When I was elected, more Virginians were moving away from our Commonwealth than into it from the other 49 states - a trend that persisted for 9 straight years.

Cost of living had climbed, job numbers were stagnant, and the murder rate hit a 20-year high. Student learning loss was the worst in the country.

Over 23,500 small businesses closed in 2021.

Virginia was falling behind. We are now winning. While there are many other areas of great strides, there are five key areas I want to highlight where we've made an enormous amount of progress that has led to our huge momentum and fiscal success.

Job growth, Economic Development Wins, Regulatory Streamlining, Crime Reduction, and Education Progress

When we started all of this, labor participation rate was 64%, now it's over 66%.

We'd lost 158,000 people in the workforce, we now have almost 260,000 more working, with more people working than any time in the history of the Commonwealth.

We were bottom third in the nation in job growth. Now we are consistently top ten. Job growth, and these are great jobs, is the rocket fuel for Virginia.

We've added well over 10,000 high-growth startups, achieved in record time.

We've welcomed over $77 billion in capital investment commitments, more than two times any other two-and-a-half year period in the past 25 years, since records have been kept.

Expansion and new built investment is the foundation for long-term growth.

We're streamlining regulations. We eliminated 8000 regulatory requirements, saving Virginia citizens $372 million dollars.

Now you can get an air or water permit 70% faster than before while still being great stewards.

Murder rate in our Operation Bold Blue line partner cities is down 26%.

School systems that engaged fully in ALL-IN VA are reporting meaningful decreases in chronic absenteeism and improvements in student reading and math performance.

All of this, with more to come, was accomplished because we are now competing.

With record receipts, we made record investments in child care, in behavioral health, in site development, in our law enforcement community, in preserving Virginia's God-given natural resources, and especially in education--including building on the twelve percent raises to our teachers in our first two years, with an additional three percent raise for educators in each of the next two years--now projecting teacher salaries to surpass the national average, and per pupil K-12 budgets increasing 40% since 2021.

We did all of this without raising taxes.

In fact, we will have provided by the end my administration at least $8 billion dollars of relief to taxpayers making sure Virginians keep more of their hard-earned money.

We did this together, and today, Virginia is financially stronger than she has ever been. "Both/And" works.

Among states with a AAA bond rating, we're near the top in our Revenue and Rainy Day Reserves -and we will be over 17%, well above our statutory 15% target.

Last year, because of our robust job creation, we were able to make record investments in our shared priorities without increasing costs on Virginians. As Washington unleashed inflation on Virginians and Americans over the past three years, this was critically important.

We have record reserves in Water Quality, over $1 billion of unused state annual borrowing capacity and $1.3 billion of carry-over balances across government.

Virginia finished the fiscal year, yet again, with over a Billion-dollar surplus. Building on our record of outperformance.

In FY22, a nearly $2 Billion surplus. In FY23, almost $3 Billion dollars.

The Fiscal Year 2024 revenues exceeded the Chapter 1 Forecast from May 2024 by $1.2 billion and were $1.7 billion higher compared to the December 2023 forecast.

This $1.2 billion surplus fully funds contingent spending on shared priorities incorporated in our enacted budget, including:

$175 million to accelerate improvements on Interstate 81

$400 million for immediate investments in reducing pollutant discharge

$289 million for deposit to the Revenue Reserve fund....more than offsetting the planned withdrawal of $129.4 million

And $90 million in funding for the recently restored Virginia Military Survivors and Dependents Education Program (VMSDEP).

We will always honor the sacrifices of all our military heroes, Gold Star families and first responders, and their families. I'm proud we were able to get this program all of this done, together.

This track record reinforces the basic fact that Virginians remain overtaxed. Since Fiscal Year 2019, prior to the pandemic, through 2024, our General Fund revenue collections have increased more than $8.1 billion and that is net of record tax relief, reflecting a 44% uplift in revenues.

And, when accounting for transfers from sources such as ABC profits and sales tax revenues dedicated to education, our total operating appropriations included in this budget that I signed in May will have increased by almost 50 percent.

Compared to 2019, this unprecedented revenue growth has allowed us to increase our annual investments in K-12 education by almost $3.5 billion...or 55%, in health and human services by $2.6 billion -- including increases of over $750 million for behavioral health through the Right Help, Right Now initiative - and almost $1.6 billion in higher education, an increase of 80%.

Now just in case you haven't heard, Virginia was named recently by CNBC as America's top state for Business.

I believe results matter so much more than rankings, and our results are really, really strong.

What I appreciate about CNBC's criteria is this year's shift towards those most important factors for businesses.

As I work to recruit companies, I consistently am asked about (1) site readiness, (2) workforce availability, (3) affordability and reliability of power, and (4) business friendliness and cost of business and cost of living.

Our huge progress in the first four of these areas makes us the best state for business.

However we have great work to do in cost of business and cost of living.

Our "Both/And" Gameplan of tax relief and record investment in critical areas works, and we must keep going.

In recent years, our neighbors in North Carolina, South Carolina, Tennessee, Georgia, and Florida have been rapidly growing. Americans, and many Virginians, were choosing to go there, instead of here.

Each of these states had lower taxes or had started their journey to lower taxes. Meanwhile, Virginia was standing still and had been falling behind since 2013.

Across the country today, there are winning states and there are losing states - states that are winning with job growth, population growth, opportunity growth -- and others that are not.

From early 2020 to today, America has generated 3.2 million jobs; 10 states have generated over 100% of those jobs, nearly 3.3 million - while 10 other states lost roughly 900,000 jobs.

The same job-winning states saw 2.3 million of net move-in gains while the losing states saw 2.4 million of net resident losses. And just to be crystal clear, those losing states ran deficits this year. The winning ones ran surpluses. At the heart of this message is the reality that this is an incredibly competitive region and Virginia must compete even harder.

The overwhelming dominance of the winning states is making up for the underperformance of the losing states. I want Virginia to consistently be one of the winning states.

The Virginia playbook works. During our administration, we will save the average Virginia family over nearly 4,200 dollars for tax relief, and military families over $12,000.

We know how to fuel a truly virtuous, reinforcing cycle that makes Virginia competitive against our neighboring states. But we must keep "investing" in both reducing taxes and critical priorities.

To end, let me finish where I began.

We see huge momentum, giant progress - but if we continue to spend every ounce of surplus we've got without reducing tax burdens, what happened to Virginia will happen again.

We must continue to lower the cost of living.

We must continue to unleash the power of education.

We must continue to invest in business-ready sites and build an energy supply that powers a growing Virginia.

We must continue to transform behavioral health, support law enforcement and preserve God's natural gifts.

I look forward to working with you in the next session to both reduce tax burdens on Virginians and support shared priorities that we collectively know work.

Solidifying Virginia as the very best place to live, work, and raise a family.

Thank you, and God bless you.

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