(The Center Square) – Virginia is preparing to roll out a new childcare assistance program for workers, but with just over a month left before the commonwealth’s June 30 fiscal deadline, lawmakers still have not finalized the budget needed to help fund it.
Democratic Gov. Abigail Spanberger on Wednesday signed Senate Bill 3 and House Bill 18 during an event at the VCU Health Child Development Center Northside focused on lowering childcare costs and expanding early childhood education access across Virginia.
The legislation creates the Employee Child Care Assistance Program, which is designed to provide matching state funds to employers that help cover childcare costs for employees. The program prioritizes small businesses with fewer than 50 employees.
“Affordable childcare and early childhood education are not niche issues,” Spanberger said in a statement announcing the bill signing. “They are not luxuries. Today, we’re taking a first step to ease the burden on parents and families across our Commonwealth by creating the Employee Child Care Assistance Program.”
But the program’s rollout depends on a budget deal that has yet to be finalized.
According to the Department of Planning and Budget, House and Senate budget amendments proposed providing $25 million in general fund support for the program in fiscal years 2027 and 2028.
Virginia lawmakers adjourned earlier this year without finalizing a biennial budget, and negotiations are still ongoing.
At the center of the dispute is whether Virginia should collect additional tax revenue from the rapidly expanding data center industry.
Senate Finance Chairwoman Louise Lucas publicly escalated criticism Wednesday, accusing the governor and the House of Delegates of blocking additional data center tax revenue that Democrats say is needed to support schools, public safety and other state priorities.
“The governor and the House are the ones that are gambling with our future by allowing the data centers to expand without concern for power, water, or paying their fair share of taxes,” Lucas wrote on social media.
In another post, Lucas said the data center dispute was “the budget hold up.”
Lucas also pushed back on growing shutdown speculation surrounding the negotiations.
“Don’t know how many times I have to tell y’all that we will have a budget and that the only people to mention shut down are the talking heads!” Lucas wrote.
In remarks announcing the childcare legislation, Spanberger said high childcare costs are affecting workforce participation and economic growth across Virginia.
“When a family can’t afford childcare, oftentimes a parent drops out of the workforce altogether,” Spanberger said. “That’s not just a family budget problem, that’s a Virginia economy problem.”
The final budget agreement will determine how much funding lawmakers ultimately approve for the new child care assistance program.
