(The Center Square) – Gov. Glenn Youngkin delivered Virginia’s official budget closeout to the Joint Money Committee on Thursday, confirming the commonwealth ended fiscal year 2025 with a $2.7 billion surplus, a $1.7 billion cash reserve and $4.7 billion in the Rainy Day Fund.
The surplus finished $572 million above revenue projections. Individual income tax collections rose 7.8%. Sales tax collections were up 2.2%. Corporate income taxes declined 1.5%.
Virginia’s AAA bond rating was reaffirmed earlier this year. Youngkin said the commonwealth’s strong balance sheet is “not about geography, it is about responsible fiscal management.”
Since 2022, the administration reports $9 billion in tax relief, $125 billion in new business investment and more than 265,000 additional Virginians working. The commonwealth has roughly 250,000 open jobs.
House Republican Leader Terry Kilgore called the report “the kind of news every Virginian should cheer,” citing revenues nearly $600 million ahead of projections, $9 billion returned to taxpayers and record reserve levels.
Youngkin said Virginia expects at least $500 million, and possibly up to $1 billion, in federal funds to expand rural health care access through a rural health transformation initiative.
He said the administration issued two executive directives on Wednesday, one to pursue those federal funds and another to reduce the state’s Supplemental Nutrition Assistance Program (SNAP) error rate.
The governor said changes to Medicaid are not removing coverage.
“Not a single Virginian is ‘losing access’ to Medicaid or getting kicked off the program. Not 40,000 Virginians. Not whatever number some are saying on a given day. No Virginians are losing their Medicaid coverage,” said Youngkin.
Virginia’s SNAP error rate stands at 11.5%. Under federal rules that start in 2027, states with rates above 6% will begin sharing costs for the program. The administration estimated the potential state share at about $270 million if the rate is not reduced.
To avoid that cost, the order calls for local offices to step up staff training, verify more applicant details, use incentives to promote best practices, look at public-private partnerships to free up staff time, tighten quality control, and consider new tools like artificial intelligence to speed up and improve accuracy in processing benefits.
The governor will present amendments to the fiscal 2026 budget and a proposed 2026 to 2028 biennial budget in December.
