Virginia’s current budget

Governor Glenn Youngkin released his FY 2025-2026 biennial budget proposal in December 2024 and gave the state of state address in January 2025. The FY 2025-2026 budget was enacted in May 2025.

Virginia enacted its FY 2025-2026 supplemental biennial budget in May 2024. The budget reported $31.8 billion in general fund spending and $87.5 billion in total spending for FY 2025. Virginia passed a package of tax cuts in calendar years 2023 and 2022.

Under the American Rescue Plan, Virginia received $4.3 billion in direct state fiscal aid and $2.3 billion in local government aid from the federal government. As of January 2025, Virginia had fully allocated its state ARP. States must spend the funds by Dec. 31, 2026.

According to the National Association of State Budget Officers (NASBO), Virginia’s total expenditures in fiscal year FY 2025 were $80.0 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2025 were $2.9 trillion, ranging from $5.4 billion in Wyoming to $413.8 billion in California.

According to NASBO, Virginia’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

• FY 2025: $32.9 billion/$89.4 billion
• FY 2024: $29.6 billion/$84.0 billion
• FY 2023: $27.8 billion/$80.0 billion
• FY 2022: $24.6 billion/$74.9 billion
• FY 2021: $22.6 billion/$74.7 billion
• FY 2020: $21.9 billion/$64.2 billion
• FY 2019: $21.8 billion/$55.3 billion

For more on Virginia’s budget, see

• the Virginia Department of Planning & Budget,
  
• Commonwealth Data Point,
  
• the Virginia Treasury, and
  
• Virginia Legislative Information System: State Budget.

Virginia’s budget institutions, rules, and constraints

Virginia uses a biennial budget. The legislature is not required to pass a balanced budget, the governor is not required to sign one, and deficits may be carried over into the following year. However, the state has budget rules that require lawmakers to balance revenues and expenditures. Virginia does not have any tax and expenditure limits. The state does limit total authorized debt and debt service incurred by the state.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Overview of Virginia’s state and local expenditure and revenue sources

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Virginia’s combined state and local direct general expenditures were $100.9 billion in FY 2022 (the most recent year census data were available), or $11,623 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $12,083.

Virginia’s largest spending areas per capita were public welfare ($2,695) and elementary and secondary education ($2,359). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Virginia’s combined state and local general revenues were $108.4 billion in FY 2022, or $12,491 per capita. National per capita general revenues were $13,619. Virginia uses all major state and local taxes. After federal transfers, Virginia’s largest sources of per capita revenue were individual income taxes ($2,274) and charges ($2,043), such as state university tuition and highway tolls.

Virginia’s economic trends

Virginia’s per capita income (per the Bureau of Economic Analysis) was $77,093 in 2024, ranking 11th among the states. It was above both the national average of $72,425 and the Southeast regional average of $61,546. The state’s median household income (five-year estimate) was $93,170 in 2024, ranking 11th among the states and above the national average of $80,734. Virginia’s poverty rate was 9.9 percent in 2024 (five-year estimate), below the national rate of 12.5 percent.

Although Virginia’s averages tell a story about the entire state, Virginia is composed of diverse localities. For example, the city of Danville’s median household income was $44,423, and its poverty rate was 24.7 percent; the city of McLean’s median household income was $250,001, and its poverty rate was 2.9 percent.

Virginia’s unemployment rate has historically been below the national average.

Unemployment rates (like other economic indicators) often vary significantly by race and ethnicity. In Virginia, the average unemployment rate in 2024 was 2.2 percent for white residents, 5.3 percent for Black residents, and 2.7 percent for Hispanic or Latino residents.

The major industries that contributed the most to Virginia’s gross domestic product (GDP) in 2024 were finance, professional services, government, social services (i.e. health and education), and manufacturing. Professional services and government contributed more to Virginia’s GDP than they did to the nation’s and region’s GDP, while finance, social services , and manufacturing were less important to Virginia than they were to the nation and region in 2024.

Looking at more specific industries, among those that accounted for at least 1 percent of Virginia’s GDP in 2023, the federal government produced far more for the state than for the nation, contributing 5.8 percent to Virginia’s GDP and 2.2 percent to the nation’s. Other industries that overperformed in Virginia relative to national averages in 2023 were computer systems design; miscellaneous professional, scientific, and technical services; the military; and food and beverage manufacturing.

Virginia’s politics

Governor Abigail Spanberger, a Democrat, was elected in 2025 with 58 percent of the vote. The next gubernatorial election is in 2029. Virginia is the only state that does not let a sitting governor run for reelection. A governor can run for a non-consecutive second term, though.

Democrats control both the House of Delegates (64 Democrats to 36 Republicans) and Senate (20 Democrats to 19 Republicans). Control of the governor’s mansion and each house of the legislature gives Democrats a trifecta in Virginia. All Virginia House seats are on the ballot in 2027 because delegates serve two-year terms. Senators serve four-year terms, and their seats are on the ballot in 2027.

Virginia’s demographics

As of July 2024, Virginia’s population was 8,811,195. That was up 9.8 percent from 2010. The state’s population growth rate was slower than than the nation’s 9.9 percent growth over the same period. The Urban Institute estimates the state’s population will increase 24.3 percent between 2010 and 2030, more than the nation’s estimated growth rate of 16 percent.

Additional resources

• The State and Local Finance Initiative’s Backgrounders explain the tax and spending issues highlighted in these briefs.
  
• The State Economic Monitor presents updated data and customized visualizations of state economic indicators.
  
• State and Local Finance Data: Exploring the Census of Governments allow users to sort, customize, and download the Census of Governments State and Local Finance series data featured in these summaries.
  
• The State Tax and Economic Review series provides quarterly reports on state tax collections and underlying economic trends in all 50 states.
  
• The Urban Institute’s State Tax Data Subscriptions provide access to up-to-date revenue data in all 50 states.