Virginia budget: Negotiations will drag into June

Senate Finance Co-Chair Janet Howell, D-Fairfax, and House Appropriations Chair

Senate Finance Co-Chair Janet Howell, D-Fairfax, and House Appropriations Chair Barry Knight, R-Virginia Beach, are playing lead roles in the budget talks.

Richmond Superintendent Jason Kamras on budget uncertainty

With a potential default of the national debt looming as early as June 1, Virginia budget negotiators say they will wait on the outcome of the confrontation between President Joe Biden and House Speaker Kevin McCarthy, R-Calif., and a crucial report on state revenues collected in May before deciding on how to bridge a $1 billion gap in revisions to the $177 billion, two-year budget.

A budget deal already was unlikely between House Republicans and Senate Democrats before late June, but the negotiators met on Monday, as the debt ceiling conflict escalated. A letter from U.S. Treasury Secretary Janet Yellen warned Congress the United States could reach the limit of its ability to pay existing federal debts on June 1, leading to an unprecedented default that could tank the economy and trigger a recession.

"We’ve got to look at revenues in May and we’ve got to look at a wild card in the federal government," said House Appropriations Chairman Barry Knight, R-Virginia Beach, who is working directly with Senate Finance Co-Chairs Janet Howell and George Barker, both Fairfax County Democrats, on a possible budget compromise.

Monday marked the May 1 deadline for Virginia taxpayers to file their returns and final payments for 2022 income taxes, which account for 70% of the revenues that pay for core government services in the state general fund budget. Sales taxes represent the second largest source of revenue, and those collections weakened in March, the last month for which results are available.

Gov. Glenn Youngkin will release revenue results for April — also a critical month for meeting the state's budget forecast — in the next two weeks. Youngkin contends the state will have more than enough money to pay for $1 billion in tax cuts that he has proposed, although he has tied one proposal — a reduction in the top individual income tax rate — to the amount of revenues the state collects by the end of the fiscal year on June 30.

Senate Democrats have rejected his proposed tax cuts, but they have discussed a potential compromise that could include some tax cuts and rebates. They have balked at proposed reductions in the corporate tax rate or the top individual income tax rate, which would significantly reduce the amount of money the state could spend on priorities such as public education and health care.

"We need to get more information to understand where we’re heading," Barker said Tuesday afternoon.

Knight, in an interview on Tuesday, said he is concerned about the volatility of state revenues and wants more economic certainty before making decisions on tax cuts and additional spending that will shape state finances not only this year, but in the next two-year budget.

"From a farmer's terminology, I call them ongoing expenses," said Knight, who was a successful hog farmer for decades.

However, the ongoing delay also poses a challenge for local governments, particularly school divisions, which may not know how much state aid they will receive for the budget year that begins on July 1 before this fiscal year ends on June 30.

"That is very concerning, to say the least," said Bristol School Superintendent Keith Perrigan, who also is an officer at the Virginia Association of School Superintendents and president of the Coalition of Small and Rural Schools in Virginia.

The uncertainty for school divisions has been compounded by an error that the Virginia Department of Education made in estimates that it provided to local school divisions last year about the basic aid they could expect to receive from the state under the two-year budget adopted in June. As a result, school divisions found out during the General Assembly session this year that they would receive almost $202 million less than they had expected, although the budget itself was correct.

The Senate had proposed the inclusion of $58 million in the first year of the budget to offset the miscalculations, which many school divisions had used for this year's budgets without knowing they were wrong. On the final day of the session, the assembly adopted a so-called "skinny budget" as a stopgap until they reach an agreement on revisions to the budget.

Perrigan said the stopgap budget bill ensured that no school division would receive less in funding for the current fiscal year than the Youngkin administration had estimated, but he said that is not the case in the next fiscal year, especially for small, rural school divisions that did not get the same boost in additional sales tax revenues for education as divisions in larger localities with more taxable sales.

The state already has an adopted budget for the next fiscal year, but Youngkin, the Senate and the House of Delegates all proposed significant increases in K-12 spending that remain in limbo. For example, both the House and Senate supported an additional 2 percent raise for teachers, on top of the 5 percent already included in the adopted budget. The governor did not include money for an additional raise in the budget he introduced in December.

"Even though I’m very confident that the final conference budget is going to be favorable to public education, the delay in approving that is causing significant distress to local school boards and localities," Perrigan said.

Without knowing how much state aid they will receive in the next fiscal year, "we can't effectively hire, we can't effectively retain, we can't effectively negotiate with our localities," he said.

The "skinny budget" did not satisfy some school divisions, such as Fairfax County Public Schools, the state's largest. The division would have received $5.1 million less in state aid this year and $12.7 million next year than it had been told because of the administrative error. The stopgap budget will assure Fairfax of $26.7 million more this year than it would have under the budget approved a year ago and $21.5 million more next year, but that is based primarily on additional sales tax revenues that localities would have received anyway.

"We see nothing in the FY24 skinny state budget that addresses the calculation error," Fairfax Schools spokesperson Julie Moult said Tuesday.

Barker, who faces a tough Democratic primary challenge on June 20 from Fairfax School Board member Stella Pekarsky, said the "skinny budget" ensured that no school division would receive less than it erroneously had been promised in the current fiscal year and updated the state aid allocated for next year.

"If (the Department of Education) had not made the miscalculation, you would have still gotten the same amount of money," he said.

Senate Democrats say they are holding the line on tax cuts — which the Republican-controlled House supports — because they want to invest more money in K-12 schools, including an additional $270 million to restore state support for school support positions that had been capped since the Great Recession in 2009.

"It all depends on what the revenues are," Barker said.

2/21/1958: Sam D. Ukrop, 33-year-old owner of Ukrop's Supermarket on Mechanicsville Pike, has opened a 3,000-square-foot department store adjacent to the market.

Ukrop's store on Hull Street circa 1963.

Ukrop's store on Buford Road circa 1963. James E. Ukrop, son of the founders, convinces his father to allow him to open a second store, on Midlothian Turnpike near Buford Road in Chesterfield County.

May 11, 1965: New Shopping Center This new shopping center at Walmsley boulevard and State Rt. 10 is scheduled to open tomorrow. The 25,000-sauare-foot center was developed by Joe Ukrop, who will operate a supermarket in the center. Other tenants include Jewel Laundry and Dry Cleaners and a barber shop, operated by Smith & Nelson. Robert M. Dunville & Brothers, Inc., was the general contractor. The supermarket will be Ukrop's third in the Richmond area.

James E. Ukrop, 34. published caption Feb. 6, 1972: James Ukrop Serves as General Manager of Local Concern Company Will Open Another Richmond Area Store in the Summer (new store is in the Dumbarton Square Shopping Center at Hilliard and Staples Mill roads -- the company's first location on the north side of the James River.)

11/21/1981: Final touches are being made at Ukrop's Supermarkets 12th Richmond area store in the Gayton Crossing Shopping Center expansion in western Henrico County. The $1.2 million, 32,000-square-foot store will open Dec. 8, company officials say. The architect was David Dunville and the contractor was Robert M. Dunville & Bros. Inc. the store will include a delicatessen and a Dot's Pastry Shoppe. About 120 people will be employed.

Ukrop's Super Market

1984: A display of stock is set up in the new Ukrop's store on West Cary Street by (from left): Store Manager Jim Blackwell, Assistant Store Manager Bill Calson and Grocery manager Billy Piece.

5/22/1985: Another Ukrop's opens The 16th Ukrop's Supermarket in the Richmond metropolitan area opened yesterday at the Stony Point Shopping Center in South Richmond. The $3.3 million store is the first retailer to open in the shopping center, while other spaces still are under construction. The Ukrop's store , which will employ about 120 people on a fulltime and part-time basis, is managed by Russell Wood, who transferred from the company's Chippenham North Shopping Center store.

1985: Carol Beth Spivey (left), cameraman Stephen Berry and Patty Papazian.

1986: Drawing was to show the Ukrop's Super market store which was to be the anchor of the Laburnum Park shopping center.

Vickie Griffith discusses "Valued Customer Card" program with a Ukrop's customer.

11/6/1987: Ukrop's lands in East End The 19th and largest store in the Ukrop's Super Markets Inc. chain, and the company's first store in the eastern Richmond area, is getting ready to open Tuesday at Laburnum Park Shopping Center on Laburnum near Interstate 64 in Henrico County. The 43,500-square-foot grocery is the anchor tenant in the 130,000-square-foot center being developed and managed by S.L. Nusbaum Realty Co. Other tenants are a Rite Aid drugstore, Radio Shack, Merribee crafts and needlework, a video store, Contempo fashions, Sit 'N' Sleep retail store, an Italian restaurant and a Curles Neck ice cream store.

James E. "Jim" Ukrop, left, and brother Robert S. "Bobby" Ukrop at Ukrop's 50th anniversary charity program. 6/29/1987

1987: James Ukrop watches brother Robert make point.

12-18-1987: Dick Hollander (l), Bobby Ukrop announce The Diamond's name at December meeting.

From left, Joseph (Joe) Ukrop, Jacquelin B. Ukrop (Joe's wife) and son Robert S. Ukrop published 6/18/1987, no origin date available

Feb. 23, 1988: Shopping mobility David Baber, a shopper at the Patterson Avenue store of Ukrop's Super Markets Inc., uses a motorized cart designed for handicapped customers. Ukrop's, with 19 sotres, purchased 25 of the carts from an Arkansas company last year and is the first grocery chain in Virginia to use the electric-powered vehicles.

1988: IN THE BAG — Coy Bryson, representing Ukrop's, bags groceries in the state grocery bagger's competition. Five finalists, Bryson among them, competed yesterday at the Marriott.

James E. Ukrop with founders of Ben & Jerry ice cream company. From left: Jerry Greenfield, James E. "Jim" Ukrop, Ben Cohen

Rich Hedrick, Jim Ukrop and Bob Ukrop of H.U. Development Associates look over the plans for CentreCourt at the site of their office park on Route 10, Chesterfield County. Published caption July 16, 1989

March 20, 1990: PRECAUTION -- Ukrop's posted an apology to customers where its soup kettles usually sit. Throughout the area, soup bars like this one were closed yesterday because tainted syringes were found in soup in three Chesterfield stores last week.

1990: Jerome Thomas loads groceries at a service conscious Ukrop's supermarket. Ukrop's Super Markets Inc., with more than 4,100 employees, moved onto the "Top 50" list for the fist time.

1990: Roy Harris greets a customer at Ukrops, where he works as a courtesy clerk.

July 22, 1990: MUSIC MAKERS -- Since they began two years ago under the direction of Harry Jones, the Ukrop's Singers has grown from 10 to 48 members. The group is made up of Ukrop employees and others who perform a variety of musical selections at nursing homes, Richmond Braves baseball games, the State Fair of Virginia and other local events throughout the year.

3/7/1991: NEWEST STORE -- Ukrop's, which commands the area's largest market share at 30.2 percent, opened its 22nd store last week in the Hanover Square Shopping Center in Mechanicsville. The company has plans for opening other new stores soon.

3/7/1991: "MAKING A STATEMENT" -- With some larger displays and warehouse-type shelving, the new Ukrop's 58,000-square-foot store in Mechanicsville's Hanover Square Shopping Center tries a new tactic inthe company's battle against competitors who push low prices.

8/25, 1991: LEADING THE PACK -- After customers told Ukrop's Super Markets Inc. that they wanted more ready-to-eat, prepared food, company officials added cafe menus and selections.

Ukrop's "Valued Customer" card

1992: Westpark Ukrop's Cafe

Gregory Mehfoud pushes a cart in the Tot Spot in the new Ukrop's in Short Pump. At right, Ukrop's employee Karen Huddleston reads to other children. At left, Marissa Halpert enters the Tot Spot after her mother dropped her off.

Claus Larsen takes chicken out of the fryer at the Stony Point Ukrop's store.

View from the Ukrop's Cafe' eating area at the new Ukrop's in Short Pump.

The Italian Pasta and Panini bar in the new Ukrop's at Short Pump. A girl in a grocery cart (right) smells a carnation. Greeters at the new store handed out carnations to shoppers entering the new store on its opening day.

The natural foods section in the new Ukrop's at Short Pump.

Shoppers in checkout line at the Westpark Ukrop's.

New Ukrop's grand opening drew a crowd in Fredericksburg.

Farmers Market Bank opened November 4 at the Ukrop's in Chesterfield. 11/3/97

Ukrop's supermarket under construction at 11361 Midlothian Turnpike.

New Ukrop's opens in Fredericksburg.

Ukrop's employee Dennis Forbes hands pizza of to a customer at the Village Shopping Center location

Ukrop's employee John Maderia loads goods into a customer's vehicle at the Village Shopping Center location.

Ukrop's employee Lowell Stansberry takes groceries out for a customer at the Village Shopping Center location.

Joe Bugas, 3, gets a close look at a fresh Virginia oyster held by Shirley Estes, an employee of the Virginia Marine Products Board at Ukrop's on Pump Road. The board is sponsoring 'Meet a Waterman' demonstrations in Ukrop's stores. At left rear is Joe's mom, Tracy Bugas, of Rockville.

ShaBrenda Bennett shops the reduced-price meat cooler at the Ashland Ukrop's store just after they opened at 8am Wednesday, May 6, 1998 in order to make ends meet for the family budget.

Ukrop's Carytown store that will be expanding into the area to the right of the sign. Photo taken Wednesday, July 21, 1999.

Shoppers at the Ukrop's store on W. Cary St. flooded the checkout counter Tuesday, Mar. 9, 1999, after snow began falling in the Richmond area.

Ukrop's Fresh Express store at 10th and Main Streets will be closing. Photo taken Monday, February 22, 1999.

Shoppers at the Ukrop's store across from Short Pump Elementary School queue up at the checkout lines Wednesday morning, Sept. 15, 1999 in anticipation of the arrival of Hurricane Floyd.

Ukrop's cashier Jennifer Hadley (lower right) assists a customer at the store's Carytown location Saturday, as the weatherman sent shoppers scurrying after calling for snow.

Ukrop's cashier Anna Cloninger places a milk jug into a bag for a customer at the store's Carytown location, Saturday. The store was doing a brisk business, partly because of weather forecasts calling for snow.

While the rest of the store was doing brisk business, ice scrapers hang largely ignored by shoppers Saturday at Carytown Ukrop's.

Ukrop's at 3522 W. Cary St. was temporarily closed Saturday afternoon 09/30/2000.

James E. Ukrop is the chairman of Ukrop's/First Market Bank in Richmond.

Customer card for Ukrop's.

Gareth Jones, 16, left, and Mary Norris, 17, bag groceries at Ukrop's in Chesterfield County.

Ukrop's store at Harbour Point Shopping Center on Hull St. Rd. is testing a new ordering system for its deli departments. Customers can avoid line by placing their order at these new kiosks.

Exterior of the Ukrop's store on Midlothian Tpke. near Chesterfield Towne Center.

Birchard Holden is 81-years old and working at Ukrop's 20 hours a week.

Ukrop's store on Midlothian is soon to be remodeled. Chesterfield Crossing Shopping Center

Ukrop's employee Jim Jones walks Barbara Anderson to her car before loading her groceries into it Wednesday morning at the Ukrop's Super Market on Patterson Ave and Gaskins Rd., which is set to close its doors January 28 after 30 years of operation. Jones has been working at the Patterson Ukrop's for five and a half years, treating customers and colleagues to his smiles and good humor.

Franklin Pond, 90, wheels Ann Marie Reutti's groceries at the Ukrop's at Virginia Center Commons. Pond is among the million-plus workers in America who are over 75 years old.

Courtesy clerks and cashiers, representing all 29 Ukrop's stores, compete in the Ukrop's Best Bagger Finals at the John Rolfe Ridgefield store. The winner, Nathan Hutzell, received a cash prize and the chance to represent Ukrop's in the state contest in Bristol, VA . The state winner will advance to the national competition taking place Feburary 2008 in Las Vegas.

Ukrop's CEO and former UR basketball player Bobby Ukrop has been selected as one of the most influential Richmonders in sports. Here, Ukrop makes a basket at the Robbins Center at University of Richmond.

Ukrop's store at Grace and Harrison streets Tues. April 15,2008.

Richmond building inspector John Whealton checks the structure of the Ukrop's store in Carytown after a car drove into the natural foods section.

Wade Charmichael, senior category manager of produce for Ukrop's, smells a cantaloupe at the Carytown Ukrop's. He relies more on looking at the melon as a way to judge its goodness, but says that smellers should smell fruit, if they think it helps determine the fruit's goodness.

The Ukrops is now open at White Oak Village, in Eastern Henrico County

Ukrops deli lead Valerie Williamson makes a 3' sub at the Ukrops store in the Short Pump Crossing.

Ukrops food service manager Pat Collawn assembles a shrimp tray at the Ukrops store in the Short Pump Crossing.

Ukrop's store at Grace and Harrison streets Tues. April 15,2008.

Robert S. "Bobby" Ukrop (left) takes Rick Herring on a tour of his stores on Friday, December 18, 2009. Herring is the president of Ahold's Giant-Carlisle division, which is buying the Ukrop's chain. Here, the two visit the Stratford Hills location.

James King (left), of Ukrop's, helps Deedee Redford, of Varina, load her groceries at the Ukrop's at the Shops at White Oak Village, in Richmond, on Thursday, December 17, 2009. "I don't shop anywhere else," said Redford, who said she's been shopping at Ukrop's for about 20 years.

Austin Wilson of Richmond picked up some Christmas cookies at the Carytown Ukrop's.

Ukrop's in Mechanicsville

Welcome sign at the new Ukrop Park in Chesterfield County.

Denise Konrad chats on a cell phone while waiting for her deli order at the Carytown Ukrop's.

Robert S. "Bobby" Ukrop took Rick Herring on a tour of his stores on Friday, December 18, 2009. Herring is the president of Ahold's Giant-Carlisle division, which is buying the Ukrop's chain. During the tour, many greeted, thanked, congratulated and hugged Ukrop. Here, Jane Lawrence hugs him at the Stony Point store.

Robert S. "Bobby" Ukrop takes Rick Herring (not seen) on a tour of his stores on Friday, December 18, 2009. Herring is the president of Ahold's Giant-Carlisle division, which is buying the Ukrop's chain. Here, Ukrop takes a phone call at the Stony Point location while retrieving an out-of-place loaf of bread.

Robert S. "Bobby" Ukrop (center) took Rick Herring on a tour of his stores on Friday, December 18, 2009. Herring is the president of Ahold's Giant-Carlisle division, which is buying the Ukrop's chain. Here, Ukrop takes a moment to help a customer at the Stony Point store by getting him a basket.

"Grandma really likes that they bring stuff out to your car," said Katy Palmer (center), of Highland Springs, about how she likes the customer service of Ukrop's. Here, Bryan Smith, of Ukrop's, helps Palmer unload her groceries as her grandmother Macie Palmer stands nearby outside the Ukrop's at the Shops at White Oak Village, in Richmond, on Thursday, December 17, 2009.