eNews – February 24, 2026
Budget at first glance, Bills still in play, All-America City Award nominations due next week...and more!
Tuesday, February 24, 2026/Categories: eNews
This edition of eNews is sponsored by Cavalry Real Estate Advisors whose deep experience in market analysis provides the answers jurisdictions seek when evaluating projects. Learn more >
VML’s 2026 General Assembly resources can be found on our website here >.
In this issue:
Budget
Senate Commerce and Labor Committee
Senate Courts of Justice Committee
Senate Local Government Committee
Senate Privileges and Elections Committee
House Counties, Cities and Towns Committee
House General Laws Committee
House Labor and Commerce Committee
VML News
Opportunities
Budget
A billion-dollar difference emerges as House and Senate look to pass their budgets on Thursday
Just a few days ago it was Super Sunday, the day that the House Appropriations (HAC) and Senate Finance and Appropriations (SFAC) Committees unveiled their proposed amendments to former Governor Youngkin’s introduced budget for the 2026-28 biennium.
With much less fanfare than that other Super Sunday – and devoid of blockbuster commercials or bad bunnies – the General Assembly’s money committees rolled out their proposed fiscal plans for the two-year budget that begins on July 1, 2026.
Thus far, our analysis has been guided by the subcommittee reports that were made public on Sunday. Those reports include a narrative document and spreadsheet of itemized amendments, plus a cryptic reference to “various language amendments,” that were not revealed until around noon today when the HAC and SFAC released their much anticipated “half-sheets” detailing the 849 amendments. It is hoped that the additional information provided in the half-sheets will answer questions that many of us have had about each chamber’s respective budget plans.
So, with the caveat that we’re just beginning to dig into the half-sheets, VML staff’s initial observations can be found below. We will have more to share later this week.
Proposed House and Senate resources
As shown in the below chart, both chambers have plussed up their resources to the tune of $1.4 billion in the House and $2.6 billion in the Senate. To state the obvious, that’s a sizeable general fund difference that will need to be bridged when the money committees kick off their budget discussions next week.
The HAC and SFAC have filled their coffers by reversing course on former Governor Youngkin’s tax conformity changes and rejecting proposals to temporarily eliminate taxes on tips, overtime, and car loan interest. That action padded their bottom-line revenues by roughly $900 million each.
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Proposed Changes to Resources
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(General fund dollars in millions)
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HAC
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SFAC
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Difference
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Balances
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$ 9.5
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$ 500.0
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$ 490.5
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Revenues
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$ 1,237.6
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$ 1,922.3
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$ 684.7
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Transfers
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$ 145.9
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$ 196.9
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$ 51.0
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TOTAL
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$ 1,393.0
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$ 2,619.2
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$ 1,226.3
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Source: HAC and SFAC reports, February 22, 2026.
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The remaining difference in resources can be explained by two actions. First, the Senate budget recognizes $500 million in additional general fund revenue in the current fiscal year, as year-to-date monies have exceeded expectations through January 2026. It’s unusual for one of the chambers, and not both, to bank new revenues at this stage of the game; no doubt there will be a conversation about that decision when negotiations commence soon.
Second, the Senate surprised many budget observers when they included a proposal to sunset the Commonwealth’s data center exemption for retail sales and use taxes effective January 1, 2027. That decision would net the Commonwealth at least $1.1 billion in annual revenues.
Several of the budget initiatives that commanded significant resources are highlighted below. Clearly, the list is not comprehensive. It is primarily designed to showcase some of the larger spending items and thus major priorities included in each budget.
There are no doubt smaller spending items and substantive language amendments. VML staff are analyzing these and will bring our findings to your attention later this week. One amendment that we’re searching for is the Senate’s approach to the 1% local option sales tax for school construction and renovation; it was mentioned in the report issued on Sunday, but we’re still digging for the budget language and its intent.
The House and Senate budget amendments can be accessed at the links below. They are best read with coffee (or something stronger) in hand!
House budget amendments can be found here >
Senate budget amendments can be found here >
Major Senate budget initiatives:
- $499 million for a one-time income tax rebate of $100 for single filers and $200 for married filers to be paid during fiscal year 2027.
- $351 million for an additional 1% salary increase for teachers and support positions and state employees. Excluded are state-supported local employees. The introduced budget included a 2% increase each year for the populations listed above.
- $316 million to fully fund five capital projects including the University of Virginia Construct Center for the Arts, Virginia Tech Renovate Derring Hall, James Madison University Expand College of Health and Behavioral Studies Building, UVA Wise Renovate Darden Hall and Roanoke Higher Education Authority for window replacements.
- $200 million for a supplemental deposit to the Water Quality Improvement Fund to support the state share of the Hampton Roads Sanitation District project.
- $200 million to offset the impact of federal enhanced tax credits for health insurance plans purchased through the marketplace. The federal enhanced credits expired on December 31, 2025.
- $161 million for K-12 education to reflect a sales tax adjustment.
- $135 million for the potential Supplemental Nutrition Assistance Program (SNAP) benefits cost share pursuant to Public Law No: 119-21, if the Commonwealth fails to reduce its error rate.
- $99 million to increase the At-Risk Add-On to a maximum percentage of 39.9 in the first year and 52.1 in the second year.
- $90 million for a Medicaid reserve contingency for higher than expected costs of the program.
- $73 million for higher education institution operating costs. Additional state operating support for higher education limits tuition and fee increases for students.
- $50 million deposit to the Virginia Housing Trust Fund including $20.6 million for a pilot program for mixed-income housing developments or for infrastructure needed for site development and readiness for such housing developments, as outlined in Senate Bill 490.
- $50 million to provide one-time grants to localities to upgrade or replace existing drinking water infrastructure. Budget language requires funding distribution levels to remain consistent with original offers made, which included $6.2 million GF to the Town of Bowling Green, $12.0 million GF to Greene County, and $6.8 million GF to Fauquier County. A new grant allocation of $50 million requires that $20.0 million be provided to the City of Richmond. Priority consideration will be given to the Town of Orange, Town of Jarratt, and Town of Blackstone as well as the county of Fairfax for the purposes of providing assistance for local governments and well owners to connect to the public surface water systems when reasonably available.
- $362 million, primarily from nongeneral fund sources, to address operating and capital support needs for the Washington Metropolitan Transportation Authority (WMATA).
Major House budget initiatives:
- $400 million for a one-time flexible payment for school divisions to use throughout the biennium, with no local match required.
- $211 million in FY 2028 for the state share of SNAP (i.e., food stamp) funding.
- $200 million for deposit to a newly created Federal Uncertainty Contingency Fund for unanticipated reductions in federal funding that impact state programs and services.
- $189 million for deposit in the Water Quality Improvement Fund to provide matching grants for eligible wastewater treatment plant improvement projects.
- $153 million to provide the state share of the increased operating support for the Washington Metropolitan Area Transit Authority over the two-year biennium.
- $148 million to increase the add-on rates applied to basic aid for special education students from (i) 4.75 percent to 9.25 percent for Level I students and (ii) 5.25 percent to 17.5 percent for Level II students. This increases the total amount of the add-on from $62.0 million to $136.3 million in fiscal year 2027 and from $61.7 million to $135.7 million in fiscal year 2028.
- $80 million to provide a lump sum deposit into the State Employee Health Insurance Fund that has experienced a significant decrease in the Fund's balance over the past year.
- $79 million for the State Premium Assistance Fund for a state-based premium assistance program targeted to individuals who purchase health insurance from Qualified Health Plans sold through the Virginia state-based marketplace with incomes between 138 percent and 200 percent of the federal poverty income level.
- $67 million for an array of housing related projects including funding for eviction reduction, the housing revolving loan fund, the housing trust fund, the homelessness services fund, and the local housing trust fund.
- $52 million to fully fund the cost of the increased state and local share of SNAP administrative costs as a result of H.R. 1, bringing the total to $65.5 million the first year and $87.3 million the second year. This additional funding will support local departments of social services who receive funding through direct federal pass throughs.
VML Contact: Joe Flores, jflores@vml.org
Senate Commerce and Labor Committee
Collective bargaining bill could have significant economic implications for local governments
HB1263 (Tran) Collective bargaining by public employees; individual home care providers; Virginia Home Care Authority established; Public Employee Relations Board established; exclusive bargaining representatives. This bill is similar to SB378, reported in this issue, by requiring all local governments to recognize unions for collective bargaining. Both bills do continue the existing law that prohibits public employees from striking. VML opposes the bills as they will cost local governments hundreds of millions of dollars.
VML Contact: Mark Flynn, markkflynn@gmail.com
Senate Courts of Justice Committee
Law-enforcement duty to render aid bill in committee; Firearm Give-Back Program bill passed by for the day in full Senate
HB273 (Helmer) Law-enforcement officers; duty to render aid upon danger to life or limb; civil immunity. Provides that a law-enforcement officer, while engaged in the performance of his duties, has a duty to render aid to any person that he observes suffering from a serious bodily injury or life-threatening condition as circumstances objectively permit. The bill provides immunity for such officers from civil liability for any acts or omissions that are not due to gross negligence or willful misconduct resulting from the rendering of such aid.
HB702 (Cole) Virginia Firearm Give-Back Program and Fund established. This bill requires all local law enforcement agencies to adopt a gun buy-back program, with exceptions for weapons that are evidence in a criminal prosecution. The Senate Courts Committee removed towns from the requirements of the bill. The bill was requested by the City of Fredericksburg.
VML Contact: Mark Flynn, markkflynn@gmail.com
Senate Local Government Committee
Reported from Senate Local Government Monday
HB388 (Callsen) Powers of service districts; control of invasive plant species. States that a locality may adopt an ordinance creating a service district and this bill adds the control of the spread of plants on the list of invasive plants established by the Department of Conservation and Recreation.
HB135 (Simon) Virginia Code Commission; extends subdivision plats work group. This work group reviewing Code of Virginia sections 15.2-2258 – 15.2-2260 relating to the review of subdivision plats is extended for one more year.
VML Contact: Michelle Gowdy, mgowdy@vml.org
Senate Privileges and Elections Committee
Bills reported from committee this week
HB234 (Pope Adams) Elections; general provisions; electoral board members to wear identification; civil penalty. Requires the Department of Elections to issue a standardized identification badge to the acting electoral board members of each locality. Electoral board members are required to wear such identification badge while conducting their official duties on the day of an election subject to a civil penalty in an amount not to exceed $1,000.
HB234 has no fiscal impact on localities.
HB505 (McAuliff) Counties, cities, and towns; dual office holding, etc. Provides that any member of a governing body in any locality, who has been employed by any governmental agency that is a component part of and that is subject to the ultimate control of the governing body of which he is a member, is deemed to have continuing personal interest in that agency for a period of two years following the termination of such employment.
This bill was conformed to SB648 by Senator Perry. Although SB505 has different language it addresses the same issue that SB648 seeks to fix.
HB1150 (Hodges) Impersonating any local, town, city, or county elected official; penalty. Prohibits any person from willfully and intentionally (i) falsely assuming or exercising the functions, powers, duties, and privileges incident to the office of any local, town, city, or county elected official; (ii) falsely assuming or pretending to be any such elected official; or (iii) impersonating any such elected official with the intent to make another believe he is such elected official. A violation of such prohibition is a Class 1 misdemeanor.
This bill was rereferred to the Senate Courts of Justice Committee.
HB1483 (Convirs-Fowler) Election of certain governing bodies; single-member districts required. Requires every locality with a population of 400,000 or greater to elect the members of its governing body from single-member districts.
This bill was rereferred to the Senate Local Government Committee.
VML Contacts: Josette Bulova, jbulova@vml.org; Michelle Gowdy, mgowdy@vml.org
House Counties, Cities and Towns Committee
Senate bills dealing with local real estate issues now in the House
SB504 (Deeds) Vested rights; rulings or orders of the local circuit court. Redefines vested rights in certain situations by adding a rule that a court order concerning the rezoning of more than 25 parcels would affect the rights of a landowner, the landowner’s rights remain vested, so long as it is pursuing a project in a manner that otherwise establishes that the owner’s rights are vested. SB504 has been assigned to the House Counties, Cities and Towns Committee. HB1122, a similar vested rights bill, was carried over in that committee.
SB334 (Roem) Conveyances of interests in real property; public hearing required. This bill requires that a public hearing be held whenever a locality is planning to sell land or convey a permanent easement or right-of-way for 1. major transmission lines over 69 kilovolts, 2. data center power lines over 69 kilovolts, and 3. power lines over 69 kilovolts for any commercial or industrial facility. The bill prescribes that the advertising and hearing be done in accordance with the rules for land use actions (two ads). The Senator worked with VML and others to improve it, but more changes may be coming. The bill is before the House Counties, Cities and Towns Committee.
VML Contact: Mark Flynn, markkflynn@gmail.com
House General Laws Committee
Local government lobbying bill to be heard today
SB50 (Rouse) Lobbying; registration; local governments; penalty. Expands the definition of lobbying to include influencing or attempting to influence local government. The Senate approved the bill. It will be heard by a subcommittee of House General Laws this afternoon. VML strongly opposes the bill and is asking members to contact your delegates. See the Action Alert from yesterday for more information.
VML Contact: Mark Flynn, markkflynn@gmail.com
House Labor and Commerce Committee
Senate’s costly collective bargaining bill and problematic prevailing wage bill land in the House
SB378 (Surovell) Collective bargaining by public employees; individual home care providers; Virginia Home Care Authority established; Public Employee Relations Board established; exclusive bargaining representatives. Repeals the existing prohibition on collective bargaining by public employees. The bill creates the Public Employee Relations Board, which shall determine appropriate bargaining units and provide for certification and decertification elections for exclusive bargaining representatives of state employees and local government employees. The bill requires public employers and employee organizations that are exclusive bargaining representatives to meet at reasonable times to negotiate in good faith with respect to wages, hours, and other terms and conditions of employment. The fiscal impact is shown to reach hundreds of millions of dollars. The bill is now before the House Labor and Commerce Committee. VML opposes the bill as a costly impact on many localities.
SB518 (Rouse) Prevailing wage rate for public works contracts; localities. The bill requires that all contractors providing services to localities must pay the prevailing wage for employees, if the work is supported in whole or part by state funds. HB569, a very similar bill was amended to remove localities from the requirement. VML supports the approach used with HB569.
VML Contact: Mark Flynn, markkflynn@gmail.com
VML News
Small Towns Conference: Pre-Conference “Local Workshop” and reception added for May 13
The Small Towns Conference provides an overview of topics related to local government management specifically geared towards small town issues. This conference invites elected officials, including council members and mayors, town managers, and leadership staff to learn, network, and share resources and ideas.
This year the Small Towns Conference will be held May 14-15 at the Chincoteague Center.
Lodging options, registration, and more information about the 2026 Small Town’s Conference is available on VML’s website here.
Pre-Conference Offering – May 13
We know that Chincoteague is a bit of a drive for many of our members, so for those arriving early there will be a special afternoon of programming on May 13 beginning at 1:00pm followed by a reception that evening. Please join us if you are able!
Local Workshop: Tools & Materials for Building Communities
What are the tools and materials used for building and revitalizing communities? How can you make informed decisions that positively affect the growth of your community? This interactive workshop will provide a better understanding of the many components of community building, such as zoning & land use, transportation, historic preservation, placemaking & open space planning, and economic development.
VML Contact: Rob Bullington, rbullington@vml.org
“If I Were Mayor” essay contest open to 7th and 8th graders
Deadline to submit entries is March 23
The Virginia Municipal League (VML) invites all eligible Virginia 7th and 8th Graders to join its “If I were Mayor” essay contest.
Regional winners selected from around the state will each receive a $150 gift card and a plaque. One statewide winner chosen from the regional winners will receive a $250 gift card and a plaque. The runner-up from the region that receives the statewide award will become that region’s winner.
Winning essays will be featured in the May/June issue of VML’s magazine Virginia Town & City.
Learn more about the contest and how to submit entries here >.
VML Contact: Manuel Timbreza, mtimbreza@vml.org
Opportunities
NeighborWorks Ground-Up Emerging Developers Training in Richmond: March 30 - April 3
Virginia Housing is proud to partner with NeighborWorks America to host the NeighborWorks Ground-Up Emerging Developers Training in Richmond from Monday, March 30 - Friday, April 3.
This multi-day professional development experience is designed to support aspiring affordable housing developers across the Commonwealth. The training will feature industry experts who will give emerging developers the tools, strategies and technical knowledge needed to deliver successful, sustainable affordable housing projects.
Topics include strategic thinking, building a development team and progressing from initial concept to final blueprint.
Registration is required to attend, and capacity is limited!
Register and View Trainings here >.
Virginia Housing Contact: Housingeducation@virginiahousing.com
Registration now open: Salute to Service honors Virginia Veterans at Virginia War Memorial, March 21
When: Saturday, March 21, 2026 10:00 a.m. to 6:00 p.m.
Where: Virginia War Memorial (621 South Belvidere Street | Richmond, VA 23220)
Registration is now open for all Virginia Veterans and those who support them for the inaugural “Salute to Service Reunion Celebration” a day-long program of remembrance, honor, and reconnection.
Highlights of the event include the premiere of Decisive Victory: Operation Desert Storm, a new documentary produced in partnership with Blue Ridge PBS, a wreath-laying ceremony honoring the seven Virginians killed in action in this conflict, unit rally points, musical performances by the West Point Alumni Glee Club, and a panel discussion offering firsthand perspectives on the Operation Desert Storm conflict and its lasting legacy.
Panelists include:
- James Henry Binford “Binnie” Peay III, General, USA (Ret.)
- John P. Jumper, General, USAF (Ret).
- Barry R. McCaffrey, General, USA (Ret.)
- Robert B. Flowers, Lieutenant General, USA (Ret.)
- Michelle Rose, Major General, USA (Ret.)
- Moderated by Michael S. Bell, Colonel, USA (Ret.), Executive Director of the Institute for the Study of War and Democracy at the National WWII Museum.
The 2026 gathering marks the first veteran reunion of its kind hosted at the Virginia War Memorial and launches the Salute to Service Reunion series, a multi-year program with future reunions planned for Vietnam War veterans in 2027, Global War on Terrorism veterans in 2028, and Cold War–Fall of the Berlin Wall veterans in 2029.
The event is free to attend for Operations Desert Shield and Desert Storm Veterans and a guest. Additional guests and supporters are $25 to attend. Advance registration is required as space is limited.
MORE INFO AND REGISTRATION HERE >
All program fees support the Salute to Service Reunion Celebration.
Contact: info@vawarmemorial.org
Complete the 2025 Local Residential Construction Fees Survey
The link to the 2025 Local Residential Construction Fees Survey is live and available here: 2025 Local Residential Construction Fees Survey.
Section 15.2-2209.3 of the Code of Virginia requires localities with populations greater than 3,500 to provide information on fees for processing, reviewing, and permitting of applications for residential land development and construction activities, including fees connected to individual residential developments for the 2025 calendar year (January 1, 2025 – December 31, 2025).
The Department of Housing and Community Development (DHCD) and the Commission on Local Government (CLG) are asking the chief administrative officers or designee in each affected county, city, and town to provide essential information about the fee collection policies in the locality. The 2025 survey remains largely unchanged from the 2024 survey. Definitions and additional points of clarification have been added to assist with the completion of the survey. Submitted survey responses will be made available to the public on the DHCD website. The deadline for completing the survey is March 1, 2026.
Please contact DHCD as soon as possible if your locality anticipates difficulties with complying with the March 1 deadline.
DHCD Contact: Joseph Dennie, joseph.dennie@dhcd.virginia.gov
Deadline to apply for National Civic League’s Virginia 2026 All-America City Award is next week
To help accommodate the many competing priorities communities are navigating, the National Civic League (NCL) has extended the application deadline for the 2026 All-America City Award to March 5, 2026. This additional time is intended to give communities more flexibility to refine their applications and fully tell their civic story.
Open Office Hours
To further support applicants, the program is hosting three informal open office hours to answer questions about the application process. These sessions are designed to be flexible; participants are welcome to join for a few minutes or stay for the full hour and may attend one or all sessions.
Office Hours Schedule:
- February 13 at 1:00 PM ET
- February 20 at 1:00 PM ET
Register here: AAC Open Office Hours
If none of these times work for you, applicants are encouraged to email Rebecca Trout to schedule a one-on-one conversation.
These opportunities are intended to help communities feel confident, prepared, and supported as they complete their applications.
About the All-America City Award:
The theme for 2026 is “America at 250: Strengthening Civic Health and Building Trust.” NCL is seeking communities that are bringing our founding ideals to life by ensuring that people have the power and opportunity to shape their collective future.
Apply here >.
VML Executive Director Michelle Gowdy, who was recently appointed to the NCL board, encourages all VML member localities to apply to join the 21 communities from Virginia that have previously won the All-America City Award!
You can view the full list of past recipients here.
NCL Contact: Rebecca Trout, rebeccat@ncl.org