Officials with Virginia Commonwealth University are discussing with the Altria Group the possibility of buying its 450,000-square-foot research building in downtown Richmond, the two parties acknowledged separately this week.
The Altria Center for Research and Technology, which opened in 2007, sits on more than four acres at 600 E. Leigh St. and is assessed for $275 million. School executives have been holding “active discussions with state budget leaders” about purchasing it, VCU spokesperson Grant Heston noted in a statement.
“Though the building was not listed for sale, Altria agreed to discuss a potential sale when approached by VCU and the Commonwealth of Virginia,” David Sutton, a spokesperson for Altria, the parent company of tobacco products manufacturer Philip Morris USA, said in a statement.
Sutton added that if the deal comes to fruition, Altria plans to construct a new research facility in Richmond, likely at Philip Morris USA’s Manufacturing Center complex, located near Interstate 95 in South Richmond.
In 2022, the National Science Foundation included VCU for the first time on a list of the top 50 public research universities.
“This recognition comes despite significant need for new, modern research facilities,” Heston said. “Additional research space is a priority for VCU, Richmond and the Commonwealth and is crucial to delivering new drugs, medical devices, pharmaceutical advancements and breakthroughs in disease prevention and treatments.”
VCU’s Massey Comprehensive Cancer Center and Medicines for All Institute, an initiative to improve global access to medicines, as well as some of the university’s academic health sciences programs such as the School of Pharmacy, could move into the new facility. The space, Heston stated, also “would help the health system add more fully private rooms to the VCU Medical Center.”
Constructing a new building the size of the research facility would likely cost more than $700 million and take at least a decade, according to Heston.
VCU has not set a timetable for making a decision. Any agreements would need to be reviewed and approved by the VCU Board of Visitors, the Virginia General Assembly and the governor’s office, according to the university’s statement.
VCU and VCU Health have had a controversial history with downtown development deals in recent years. In spring 2023, news broke that the university’s health system was planning to pay developers $72.9 million to back out of a $325 million downtown development project with higher costs than the university had anticipated.
Known as the Clay Street Project, VCU planned to build a medical office tower and a multiuse project at the site of the City of Richmond-owned Public Safety Building at 10th and Clay streets. Ultimately, VCU paid about $5 million to demolish the Public Safety Building in a promise to the city — bringing the university’s costs to nearly $80 million. VCU Health also had an agreement with the city government to pay about $56 million to make up for lost tax revenue, but the city and VCU Health have not yet reached an agreement over that money. Ultimately, state watchdog JLARC recommended changes in governance for the health system. In September, VCU Health’s board voted at the request of VCU President Michael Rao to eliminate his dual title as VCU Health president, noting the “title was misleading as it implied an operational role which did not exist.”
Since real estate owned by VCU would likely be tax exempt, the city’s coffers could take a hit if VCU’s deal to acquire Altria’s research facility becomes a reality.
In a brief response to a request for comment, Margaret Ekam, a city spokesperson, said in a statement, “At this time, we are still gathering information about the proposed plan.”
Virginia Beach developer and NFL Hall of Famer Bruce Smith is vying for the chance to develop a casino in Petersburg and has joined forces with Cordish Cos., the Baltimore-based entertainment company that has already made inroads in Virginia.
There’s just one obstacle facing Smith and other prospective developers, including Bally’s, Penn Entertainment, Rush Street Gaming and D.C.-based Warrenton Group: a piece of legislation awaiting action by the Virginia General Assembly. Virginia State Senate Bill 628 replaces Richmond with Petersburg in the state’s list of cities eligible to host a casino, clearing the way for a casino referendum to be held in Petersburg.
However, the House of Delegates added a reenactment clause to the bill’s wording at the last minute, which would require next year’s General Assembly to take up the bill and vote for it a second time before Petersburg can move forward with a referendum vote — a move that would delay the development of a casino there by at least a year.
Gov. Glenn Youngkin removed the reenactment clause and sent the bill back to the legislature, which will vote on his amended bills April 17. If the General Assembly leaves the bill as-is, Petersburg will likely hold a referendum this fall — and that’s what Smith hopes will happen. He says Petersburg is ready and needs the economic benefit of a casino sooner rather than later.
“Now’s not the time to play politics with the people of Petersburg,” Smith said this week in an interview with Virginia Business, directing his remarks toward House Speaker Don Scott. “They need this economic development opportunity — more so than any other city in the state of Virginia. This is a critical time. That is costing the city money [and] jobs, trying to alleviate the problems of food deserts [and] underfunded schools. We can’t allow folks to say one thing and do another. The time to act is now, and all we’re asking for is to … take the reenactment clause right out of the bill.”
The former defensive end for the Buffalo Bills and Virginia Tech Hokies plans to unveil details of his and Cordish’s casino proposal Sunday at the Petersburg Public Library. The proposed casino will be similar to a $1.4 billion development submitted in 2022 by Cordish and approved by Petersburg City Council in a nonbinding agreement — which became null and void because Petersburg did not receive legislative support to hold a casino referendum that year. Smith, who collaborated with Cordish on a failed Richmond casino proposal in 2021 but was not part of the 2022 Petersburg bid, said the new proposal is “similar, with some tweaks.”
While he will disclose more details Sunday, Smith said “the structure of the deal in itself” will be different. “I will discuss those details on Sunday at the town hall, and they will be groundbreaking — and I think it will be breaking news.” Smith said he became interested in working in Petersburg after a visit with other NFL all-stars a few years ago to a local school and seeing room for economic improvement.
As in the 2022 proposal, the Cordish resort would be built on 90 acres at the intersection of Wagner Road and Interstate 95, and the casino would be “just one component in this massive development,” Smith said, including a 3,000-seat theater among residential, office and retail buildings on the site. He says his team expects to create 7,500 jobs total, including construction jobs, and produce about $2.8 billion in economic impact for the city over the casino’s first 10 years in operation, according to a CNBC interview he gave about the venture this week.
Smith says that his status as a born-and-bred Virginian — having grown up in Norfolk, graduated from Virginia Tech and moved to Virginia Beach to start his real estate business — is a major point in his favor.
Bruce Smith Enterprises, based in Virginia Beach, has previously developed hotels in Washington, D.C., and Virginia Beach in partnership with Armada Hoffler, and Smith is involved in projects slated for Virginia Beach’s Rudee Loop and a 287-unit apartment complex in Norfolk.
He also says that his development team would focus on making sure there is robust local participation in the project, noting that in some majority Black cities that host casinos, participation from investors of color is minimal. “Historically, when opportunities for major developments have taken place, Virginians have either been shut out, or given such a small percentage, even in areas that are disenfranchised,” he said. Petersburg’s population is about 77% African American, Smith notes.
“First and foremost, this is about the citizens and the city of Petersburg, a city that has been ignored and disenfranchised for three generations, to be quite honest,” Smith said. “A city with historically high unemployment, poverty, food deserts [and] underfunded schools, just to name a few problems. This city needs this economic engine more than any other city. It’s time to put Virginians first.”
Meanwhile, the Smith-Cordish plan is not the only one under consideration; four other prospective developers have applied for consideration:
Bally’s is a major national player in the casino industry and has previously vied for the Danville casino (which Caesars Entertainment ultimately won), but according to news reports, the company also is struggling to raise capital for a new resort in Chicago;
Rush Street Gaming is the Chicago-based company that operates the Portsmouth Rivers Casino, the first permanent casino to open in Virginia;
Penn National Gaming is based in Hollywood, and its focus is on “community casinos,” as opposed to those based in Las Vegas and Atlantic City;
The Warrenton Group is a Washington, D.C.-based business developer that has an agreement with casino operator Delaware North, but the Warrenton Group itself is a new entrant to the casino industry.
Rendering of a proposed Petersburg casino from 2022 that is expected to be similar to the 2024 proposal. Image courtesy The Cordish Cos.
Cordish pitched a $600 million hotel and resort casino in 2021 in Richmond’s North Side that would have featured a live music hall, but ultimately a plan proposed by Urban One on the city’s South Side won approval from the city. Cordish also sued the City of Norfolk in 2021 for $100 million alleging the city government breached its contract with the company, in which Cordish said it agreed to develop the Waterside District in exchange for the exclusive right to develop and operate a casino in Norfolk — although at the time casinos were not yet legalized in Virginia.
Instead, Norfolk reached a deal with the Pamunkey Indian Tribe to develop the HeadWaters Resort & Casino with Tennessee billionaire investor Jon Yarbrough. Cordish’s lawsuit was dismissed by a Norfolk circuit court in 2022, and the state Court of Appeals upheld the lower court’s decision last month, but there is still a possibility that another entity will take control of the long-delayed HeadWaters project.
According to an April 4 Virginian-Pilot story, Norfolk city leaders are considering the possibility of partnering with a developer other than the tribe and Yarbrough. Under the casino referendum passed by city voters in 2020, the development team is required to obtain a gaming license within five years, or by November 2025. To do so, developers needed to begin construction of the permanent casino by this spring, a casino spokesperson said previously. Smith said it’s possible that he and Cordish would enter the running if the city opens the field to other casino developers.
“If there’s an opportunity that exists in Norfolk, in my hometown, after we take care of Petersburg, we will certainly address that opportunity if it arises,” Smith said, while noting, “first and foremost, our focus is on Petersburg.”
Virginia Gov. Glenn Youngkin on Monday released a slate of 233 amendments to the state budget passed by the General Assembly — calling it an opportunity for “common ground.” However, his budget removes language that would mandate Virginia’s future participation in the Regional Greenhouse Gas Initiative, which has been a high priority for Democrats.
It was not clear Monday afternoon whether Democratic legislators agreed with Youngkin’s amendments, and the Virginia Senate and House Democratic caucuses did not immediately release a response following the governor’s news conference Monday.
During his news conference, the Republican Youngkin specifically mentioned Del. Luke Torian and Sen. Louise Lucas, thanking the two Democratic legislative finance leaders for their work in passing a balanced budget on deadline, while noting that he disagreed with some of their priorities. He said that he intends to keep trying to find ways to give Virginians tax relief, while noting that there are no tax decreases — or new taxes — in his budget.
Youngkin also said that there will not be an increase in taxes on electricity bills from the RGGI — an indication that he has removed the state legislature’s addition of language requiring that Virginia participate in the initiative. During former Gov. Ralph Northam’s administration, Virginia joined the greenhouse gas initiative in 2021, but at the end of 2023 under Youngkin, Virginia stopped participating in RGGI, after the state’s Air Pollution Control Board voted to repeal the Northam-era legislation. The legislature’s budget amendments passed in March would have brought the state back into the RGGI.
“I will propose today that we do not fight over tax decreases, but we also recognize it’s not time nor will it ever be for tax increases,” Youngkin said during his remarks. “I believe that’s the first place where we come together and find common ground. It’s structurally balanced, and it can be delivered on time.”
Youngkin’s 2024-26 budget includes $21.2 billion in K-12 education spending, increases higher education spending by $1 billion and increases health and human resources spending by $3.2 billion. It also proposes a 3% teacher pay raise each year, caps college tuition increases at 3%, fully funds Virginia’s share of Metro’s operating shortfall, and provides toll relief in Hampton Roads and additional funding for Interstate 81, according to the governor’s presentation.
Youngkin had called for personal income tax cuts, an increase in the state sales tax, and an extension of the sales tax to digital downloads. However, Democratic legislators removed all of the recommended tax cuts in its amended budget, as well as the sales tax bump, while agreeing to extend the sales tax to digital goods — including consumer purchases and business purchases.
With Youngkin’s new amendments announced, the ball is now in the Virginia legislature’s court. The Virginia State Senate and the House of Delegates must either vote to pass the governor’s amended budget as-is, or vote to reject it — thus leaving the state without a 2024-26 budget unless both sides can come to an agreement by June 30, when the fiscal year ends. The Democratic-controlled legislature returns to Richmond on April 17 to take up the newly amended budget.
Youngkin vetoed a record number of bills this session — 113 bills as of noon Monday — and hadn’t ruled out vetoing the full budget, according to a Washington Post article Saturday. Youngkin pledged after the 2023 elections — in which Democrats gained control of the Virginia State Senate and the House of Delegates — that he would focus on compromising and collaborating with Democrats.
However, relations between the parties soured quickly after the governor announced a $2 billion proposed Alexandria sports arena and entertainment district in December without negotiating with Democratic leadership. During the General Assembly’s regular session, state Sen. Louise Lucas, the powerful chair of the Senate Finance and Appropriations Committee, prevented committee votes on the House of Delegates and Senate versions of the legislation, halting its progress to a Senate floor vote needed to create a state authority to manage the project.
Ultimately, Monumental Sports & Entertainment CEO Ted Leonsis reached a deal with Washington, D.C., Mayor Muriel Bowser to keep the Washington Wizards and Capitals in the District through 2050. At that point, Youngkin had no reason to negotiate with Democrats and vetoed legislation that would have set a $15 per hour minimum wage beginning in 2026 and a measure that would have established a retail market structure for recreational marijuana sales by next year — both Democratic priorities.
The Virginia Legislative Black Caucus will host a news conference Tuesday in Richmond in which Lucas and Torian are expected to discuss the governor’s amendments to the budget.
Two pending Virginia State Senate bills would change the list of locations eligible to host a casino, adding Petersburg and Fairfax County to the mix and removing Richmond.
On Tuesday, the Senate Committee on General Laws and Technology’s gaming subcommittee met to discuss these and other measures regarding skill games, sports betting and horse racing. Both casino measures received enough votes to move forward to a full vote of the Senate General Laws and Technology Committee expected Wednesday.
Sen. Dave Marsden, D-Fairfax, sponsored SB 675, a bill that would add Fairfax County to the list of localities that could host a casino in Virginia if voters pass a referendum — although Marsden placed some restrictions on the measure, including that a casino would have to be located within a quarter-mile of an existing Metro station on the Silver Line. Also, the locality’s officials are required to consider a gaming operator’s history of paying prevailing wages to construction workers and entering into labor agreements with unions when awarding the contract.
According to WTOP, if successful, the casino would be placed in Tysons on Route 7 near the Spring Hill Metro station, on land where a car dealership was previously located. Marsden’s legislation previously included the possibility of building a casino in Reston, but after resident opposition, Reston has been excluded from consideration.
Advocating for his bill before the subcommittee, Marsden said that the MGM National Harbor Hotel & Casino in Maryland is “taking $150 million a year out of Virginia coffers,” and that Northern Virginia has suffered financially since the pandemic. He also emphasized that a casino project would include a convention center “that does not exist in Fairfax County. We’re also talking about a hotel, a concert venue and the casino itself.”
Subcommittee member Sen. Christopher Head, R-Roanoke, said he has received “hundreds and hundreds and hundreds” of emails from community members opposed to the Fairfax casino and asked whether Marsden had heard from any community groups that support a casino in Fairfax. Marsden replied that he believes MGM is stirring up opposition to a Tysons casino “to make sure that their interests are preserved, but I’m getting tired of paying for Maryland schools,” referring to Virginians spending money at the MGM casino.
Benita Thompson-Byas, senior vice president of Reston-based Thompson Hospitality, was one of a few speakers in support of a Fairfax casino and said her company would be a minority partner if the casino is approved by voters.
Another subcommittee member, Democratic Sen. Adam Ebbin of Alexandria, said he also has received “hundreds” of emails opposing a casino and said he wouldn’t support the proposal without more input from the Fairfax County government. Marsden said he has been in discussions with Fairfax supervisors who said they would follow through with due diligence if the bill progresses.
Subcommittee member Sen. Jennifer Carroll Foy, D-Woodbridge, said she would vote for the bill, noting that a referendum gives Fairfax voters the ultimate choice on the matter. “They are the best ones to decide,” she said. The bill ended in a 4-4 tie, sending it to the Senate General Laws committee for a vote.
Meanwhile, Sens. Lashrecse Aird, D-Petersburg, and Louise Lucas, D-Portsmouth, are chief co-sponsors of SB 628, which would replace Richmond with Petersburg on the list of cities eligible to host a casino if city voters pass a referendum. No one spoke in opposition to the bill, which passed the subcommittee and will go forward for a committee vote.
Aird emphasized Petersburg’s high poverty rates and aging infrastructure as factors in the city’s favor. “Petersburg needs a transformative economic development opportunity to generate immediate revenue and provide long-term benefits,” she said. Several people representing a hospitality workers’ union wore red T-shirts and sat in the audience, showing support for the measure.
Also, Sen. Lamont Bagby, D-Richmond, sponsored SB 541 removing Richmond as an eligible host city, which passed the subcommittee unanimously. Sen. Schuyler VanValkenburg, D-Henrico, sponsored a measure to reduce the number of casino-eligible cities from five to four, but struck the bill earlier Tuesday and instead supported the measure allowing Petersburg to vote on a referendum.
Republican Sen. Bryce Reeves sponsored a bill, SB 345, that would block a city from holding a second casino referendum within three years if a first referendum fails. That bill passed with seven ayes and one no vote.
Measures removing Richmond as a casino-eligible city were clear responses to last fall’s second unsuccessful referendum in Richmond to establish the $562 million Richmond Grand Resort & Casino on the city’s South Side. About 61% of city voters said “no” on November 2023 ballots to the do-over referendum, a much larger margin than in the 2021 vote, which was narrowly defeated by about 1,500 votes. During the 2023 session, Del. Kim Taylor, R-Petersburg, and former state Sen. Joe Morrissey, D-Petersburg, tried unsuccessfully to get a casino referendum on Petersburg’s ballots and prevent a second vote in Richmond.
Also under consideration Tuesday was SB 124, a bill from VanValkenburg that would permit betting on Virginia college sports, except for proposition betting, such as point spreads; under current law, the state allows betting on all college sports except those played by Virginia college athletes. Illegal betting is currently a class 1 misdemeanor in Virginia. The bill passed the subcommittee and will next be voted on by the Senate General Laws and Technology Committee.
Another measure, SB 212, would create a regulatory infrastructure for so-called “skill game” machines (also called “gray machines”) in Virginia convenience stores and other small businesses. Sponsored by Sen. Aaron Rouse, D-Virginia Beach, the bill would direct the state tax department to collect a 15% monthly tax from the gross revenue of every skill game machine. As of Tuesday, the bill has been re-referred to Senate Finance and Appropriations. SB 307, a bill sponsored by Democratic Sen. Jeremy McPike, would impose a 34% tax on all gross profits from gaming devices and would send most tax proceeds to the state’s general fund. The vote was postponed to make further adjustments to the bill.
The political version of musical chairs — aka the 2024 General Assembly session — begins again in Richmond this month, as legislative control shifts once again to Democrats, who won majorities in the House of Delegates and the state Senate in the November 2023 elections.
Nevertheless, a 6-foot-5-inch Republican roadblock stands in the way of overly liberal legislation: Gov. Glenn Youngkin.
His presence guarantees that the next two years will not be a repeat of 2020-21, when Democratic Gov. Ralph Northam and his party held full control over the executive and legislative branches and passed perhaps the most progressive slate of legislation in state history — abolishing the death penalty, legalizing marijuana possession, increasing the state’s minimum wage and expanding voting rights and reproductive freedom.
In last fall’s race, abortion access was a major motivating force for Democratic voters, especially women, after the U.S. Supreme Court overturned Roe v. Wade in June 2022. But political observers don’t expect many — if any — new laws regarding abortion rights in Virginia, because the Democratic majorities in the House and Senate are focused on preserving the state’s status quo, which allows abortions up to 26 weeks into a pregnancy.
As of early December 2023, Democrats had filed legislation pursuing a constitutional amendment that, if passed two years in a row by both houses and then by voters, would enshrine abortion rights in the state constitution — but not before 2026.
Some lawmakers and politics watchers see the possibility for less controversial compromises under Youngkin, who raised a lot of money and spent a lot of time stumping for candidates last fall in an unsuccessful attempt at gaining Republican legislative control. Speaking the day after Election Day, the governor sounded a conciliatory note, saying he would work with Democrats, adding, “I’m optimistic that we can continue to find a path forward.”
The upcoming General Assembly session, which convenes Jan. 10, will look different from any previous legislative gathering in Richmond. A statewide redistricting, coupled with every legislative seat being up for election in November 2023, resulted in an exodus of senior legislators, including former state Sens. Dick Saslaw, Janet Howell and Tommy Norment. It also caused significant turnover within the General Assembly, resulting in the most diverse legislature in state history, with more people of color and women in office than ever before. The new Assembly will include 25 Black delegates and seven Black senators, and 48 out of the 140 legislators will be women. Overall, there are 34 new delegates and 17 new senators. (Additionally, special elections are set for January to fill the seats of Del. Les Adams, R-Pittsylvania County, and Sen. Frank Ruff, R-Mecklenburg County, both of whom resigned in December. Adams said he was leaving to be available for another service opportunity; Ruff, who has served in the General Assembly since 1994 and was slated to be the senior Republican on the Senate Finance Committee, is fighting cancer.)
Significantly, Portsmouth Del. Don Scott will serve as Virginia’s first Black speaker of the House in the legislature’s 404-year history.
“The No. 1 thing I think the speaker’s job is not to be the speaker of the Democrats, not to be the speaker of the Republicans, but the speaker of the House — the people’s House — to handle the body on the floor with civility and respect,” says Scott, who was elected to the House in 2019 and was picked by House Democrats to serve as minority leader in 2022. “Obviously, we’re going to have heated debate, vociferous arguments, but all within the view that we are all here to do the same thing — to carry out our duties that our communities elected us to do, and to do it with the respect and dignity that the office has always provided.”
Karen Hult, a Virginia Tech political science professor, says, “There may be some narrow areas in which they can compromise. The difference [now], maybe, is that the new General Assembly members are probably a little bit more partisan than we’ve seen in the past two years. And they’re more distinct from each other.
“The other thing that I think may be important, that gives Gov. Youngkin the upper hand at least at the outset, is how many of the delegates and senators are new to the chamber. That means you’ve lost the institutional memory … and information on how things get done. On the other hand, you’ve got lots of new information and lots of new energy. That can be a good thing.”
Balancing the books
Republican Sen. Ryan McDougle is now the state Senate’s minority leader and expects to collaborate with Democrats on mental health, cannabis and education legislation. Photo by Caroline Martin
Pre-session rhetoric aside, legislators are bound by law to enact a balanced 2024-26 state budget, which the governor must ultimately sign. In 2023, the divided legislature was deadlocked on budget amendments until September, months past its deadline. Democrats in both houses shouldn’t encounter much disagreement on this year’s budget, but the governor is a different matter entirely.
On Dec. 20, 2023, Youngkin was set to submit his proposed state budget, which will serve as the framework of the finalized budget following legislative adjustments. But the governor can veto Democrats’ changes to the budget, and the party doesn’t have the supermajorities necessary to override Youngkin’s veto.
Virginia Commonwealth University Associate Professor of Political Science Amanda Wintersieck predicts “absolute gridlock. I think in this highly polarized air, there isn’t really indication that there’s going to be a willingness to compromise to move legislation forward.”
One possible upside is that increased partisanship will result in fewer in-party disagreements, forecasts David Ramadan, a former GOP delegate and now a professor at George Mason University’s Schar School of Policy and Government.
“There used to always be a problem between the House and Senate, regardless of who’s in control, between the priorities in the House and the Senate. I doubt that’s going to happen here,” Ramadan says. “You will probably see the Democrats coalesce with no differences between them because they know their fight is with the governor.”
The Senate’s new majority leader, Fairfax County Sen. Scott Surovell, says the Democratic caucus’s budget priorities this session will include correcting “severe underfunding” of the state’s K-12 education system. A 2023 study by the Joint Legislative Audit & Review Commission (JLARC) showed that state funding of public schools is 14% below the national average, “which is completely unacceptable, given our state has the 10th highest median income in America,” Surovell says. Workforce training for high school graduates and increasing mental health funding are other priorities for Senate Democrats, he notes.
One area that could hit a roadblock from Youngkin would be Democratic proposals to raise the state’s minimum wage to $13.50 per hour by Jan. 1, 2025, and $15 an hour by 2026, up from the current minimum wage of $12.50.
Even though bipartisan cooperation may not be at the top of legislators’ agendas this session, the Senate Republicans’ minority leader, Sen. Ryan McDougle, says he has met frequently with Surovell and other Democratic leaders ahead of the 2024 session. “We do tend to work together to try to come up with solutions,” McDougle says. “I think we’re going to all work together to pass a budget. We’re all concerned and focused on education … and mental health.”
But with less surplus revenue anticipated this year, as well as the political shift in the House, Youngkin’s desired corporate tax cuts are likely not to be part of that budget. Scott says it’s a no-go for him, just like it was last year for some members of the GOP legislative budget leadership, who backed down on Youngkin’s proposed permanent corporate tax rebates during last year’s budget negotiations.
“Prior to any tax cuts, Virginia was doing very well,” Scott says. “We attracted Amazon HQ2 without corporate tax cuts,” as well as Lego Group and Boeing, he adds. “I think, in combination with the governor’s true business acumen, along with commonsense policies for everyday hardworking Virginians, we could make some change. I’ll be shocked if we don’t get a budget in on time.”
Areas for compromise
Scott also anticipates that the legislature will fill two vacant State Corporation Commission judgeships, appointments that have been held up by partisan bickering over the past two years.
Transportation infrastructure, economic development, opioid treatment, mental health access and higher living expenses are other areas where Scott says he sees room for bipartisan cooperation, as well as lowering prescription drug prices.
Another area that may see joint support is Youngkin’s budget proposal to allocate $90 million in one-time funds to create “Virginia’s Research Triangle,” a network between the University of Virginia, Virginia Commonwealth University and Virginia Tech to build collaboration in biotechnology, life sciences and pharmaceutical manufacturing and compete with other East Coast hubs such as North Carolina’s Research Triangle or Boston’s biotech industry.
Also under legislative consideration is a proposed state authority that would own a new $2 billion entertainment district in Alexandria, including an arena for the Washington Capitals and the Washington Wizards teams (see related story).
Energy — including legislation regarding renewable sources and grid reliability — will also be a priority this session, Republicans and Democrats say.
Greg Habeeb, a former Republican delegate who is president of Gentry Locke Consulting and an energy and cannabis lobbyist now, says diversifying energy sources is important to both parties. Solar and offshore wind, as well as nuclear energy, which the governor has championed, are all going to be part of important discussions during the session, Habeeb predicts.
Ramadan says that legislators who accepted campaign financing from Dominion Energy or Clean Virginia — a PAC created by Charlottesville millionaire Michael Bills to dilute the utility’s political influence — could form interesting bipartisan alliances on energy legislation. “I have no idea how that’s going to play,” Ramadan says.
Also, two new delegates representing Prince William County — Democrat Josh Thomas and Republican Ian Lovejoy — join newly elected Democratic Sen. Danica Roem, who previously represented the county as a delegate, in pushing for stronger state oversight of the data center industry, which added more than $54 billion to Virginia’s gross domestic product from 2017 to 2021, according to a PricewaterhouseCoopers study released in 2023.
Prince William has been the epicenter of public opposition to data center growth in recent months; Roem, who spoke out last year against the controversial Digital Gateway data center complex that was approved in December (see related story), announced she will sponsor five pieces of legislation to add more state regulation over the fast-growing industry.
Another area for compromise, adds Habeeb, who represents the Virginia Cannabis Association as a lobbyist, may include legalizing retail sales of cannabis to adults without a medical prescription.
When Democrats legalized cannabis in 2021, they said they’d return to the matter in the 2022 session to create a retail structure for recreational purchases. But when Republicans won the governorship and the House in 2021, weed legislation was off the table. However, Habeeb says there’s an opening now.
“Everybody seems to agree that the status quo doesn’t work,” he says. “This idea that you can have homegrown [marijuana], legal consumption, legal possession [and] an exploding black market and gray market for intoxicating products and do nothing about it, everybody seems to agree that that doesn’t work in any kind of long-term sustainable way.”
As of early December, Youngkin had not taken a public position on establishing or opposing a legal cannabis retail market, although in July, Virginia Department of Agriculture and Consumer Services Commissioner Joseph Guthrie, a Youngkin appointee, said the governor is “not interested” in further cannabis legislation. That’s not true of everyone in the GOP, though.
In the state Senate, McDougle says that although he and other Republicans don’t support legal cannabis sales, he sees a problem with Virginia’s lack of a retail structure. “Our system right now doesn’t let anybody know what the rules are, and that’s not tenable. So … I do think we need to make it a system so Virginians know what the rules are. I think we’ll come together and work across party lines.”
Surovell agrees, saying, “We have to do something about starting a retail cannabis market … so we have safe products in the market … [that are] taxed and licensed like most other Virginia businesses.”
JM Pedini, executive director of Virginia NORML, the state chapter of the pro-cannabis organization, says that Virginia’s illicit marijuana market increased from $1.8 billion in 2020 to a projected $2.4 billion in 2023, according to New Frontier Data, a group that studies the cannabis industry.
“Democrats controlling the House and Senate does create a path for an adult-use retail sales bill to reach the governor’s desk. While members of the Youngkin administration have made statements regarding the governor’s opposition to legalization, Youngkin himself has largely been silent on cannabis policy, instead indicating it is the responsibility of the legislature to send him a bill,” Pedini adds.
“It’s important to recognize that without the supermajority required to overturn a Youngkin veto, any serious adult-use retail legislation must be both pragmatic and palatable in order to succeed. It should be easy to read, narrow in scope and have strong bipartisan support.”
Democrats regained control of the Virginia Senate and the House of Delegates in Tuesday’s elections, likely putting a damper on Republican Gov. Glenn Youngkin’s legislative agenda and potential 2024 presidential aspirations. As of 11:45 p.m. Tuesday, according to the Virginia Public Access Project, Democrats won 21 out of 40 seats in the state Senate and 51 seats in the House, which has been held by Republicans for the past two years.
This electoral outcome will likely prevent Youngkin from passing most of his agenda, including placing a 15-week limit on abortions, which was a significant issue for many voters, particularly Democrats and women. It may also at least temporarily lessen his national standing, as he failed to deliver a red wave as he did during his 2021 election, which saw Republicans elected to the state’s top three offices and the GOP take control of the House.
The election also sets up Virginia House Minority Leader Don Scott Jr. of Portsmouth to become the first Black speaker of the House in the Virginia legislature’s 400-plus-year history, replacing GOP Speaker Todd Gilbert, who has presided over the House of Delegates since January 2022.
Republicans won 19 Virginia State Senate seats. The Associated Press called a Williamsburg-area nailbiter at 2:15 p.m. Wednesday in favor of GOP challenger Danny Diggs, who defeated Democratic incumbent Monty Mason. The final count saw Diggs with 32,764 votes, or 50.69% of the total, and Mason with 31,742 votes.
In the House, Republicans held 48 seats as of 2:45 p.m. Wednesday, with one race not yet called. Republican Del. Kim Taylor’s race against Democrat Kimberly Pope Adams in Petersburg and Dinwiddie County was too close to call, with Taylor ahead with 50.23% of the vote and less than a 200-vote margin over Adams. Taylor declared victory late Tuesday, but Adams had not conceded as of Wednesday afternoon.
Two other close House races went in Republicans’ favor: District 57’s contest in Henrico County between Democrat Susanna Gibson and Republican David Owen, a race that received national press following revelations that Gibson had performed sex acts with her husband on a live streaming pornography website while soliciting tips from viewers. Owen won with 51.16% of the vote, gaining 17,878 votes to Gibson’s 16,912. In James City County and Williamsburg, Republican Del. Amanda Batten won a third term with 51.93% of the vote over Democrat Jessica Anderson.
Voters went to the polls Tuesday to fill all 140 General Assembly seats. Many candidates were new faces or, at least, less experienced than those who previously filled the legislature, thanks to the December 2021 redistricting process, which redrew political districts without prioritizing the residential addresses of incumbents. That led to an unprecedented wave of retirements and some primary defeats of longtime legislators.
Blue wave
In several of the most hotly contested races, Democrats came up victorious Tuesday night.
In Loudoun and Fauquier counties, Democrat Russet Perry, a former CIA officer and prosecutor, won Senate District 31 with 52.5% of the vote as of 10:28 p.m. Tuesday, according to unofficial results from the Virginia Department of Elections. She defeated Republican Juan Pablo Segura, a health care tech entrepreneur who founded a local doughnut chain. Segura received 40,835 votes compared to Perry’s 45,350 votes, and the Associated Press estimated 92% of votes had been counted by 10:25 p.m., when it called the race.
Segura conceded about an hour later. “We were outspent but not outworked,” he said in a statement. “We knocked on more than 100,000 doors and talked to many, many thousands of voters about their hopes, dreams and concerns. … I also want to congratulate Russet Perry on a hard-fought race, and I wish her the best of luck in representing this special place. Lessons are learned in losses, but I heard very clearly the deep desire from so many in this district for better representation from their government.”
Both were first-time candidates, and Perry outpaced all other state legislature candidates in fundraising more than $6 million by Oct. 31, while Segura raised a bit more than $5 million.
Del. Danica Roem, another Democratic delegate seeking a Senate seat, beat Republican candidate Bill Woolf for the 30th District seat in Manassas and part of Prince William County with 51.51% of the vote. Roem, who became the nation’s first openly transgender state lawmaker upon her 2017 election to the House of Delegates, won 29,713 votes to Woolf’s 27,794 as of 10:13 p.m., according to unofficial results from the Virginia Department of Elections. A former journalist, Roem currently represents House District 13, which includes Manassas Park and part of Prince William County. Woolf was formerly a detective with the Fairfax County Police Department.
“I’m grateful the people of Virginia’s 30th Senate District elected me to continue representing my lifelong home of western Prince William County and greater Manassas,” Roem said in a statement. “The voters have shown they want a leader who will prioritize fixing roads, feeding kids and protecting our land instead of stigmatizing trans kids or taking away your civil rights.”
In another key seat, Democratic Del. Schuyler VanValkenburg won Senate District 16 in western Henrico County with 52.69% of the vote as of 9:38 p.m. Tuesday, according to unofficial results from the Virginia Department of Elections. The Associated Press estimated more than 95% of votes had been counted by 9:33 p.m.
VanValkenburg received 27,469 votes to Republican Sen. Siobhan Dunnavant’s 24,544 as of 9:43 p.m. Although the incumbent, Dunnavant was redistricted into a slightly bluer district than her previous district, which had included part of Hanover County. The race was considered a key contest to watch this year and saw some of the largest fundraising among Virginia’s legislative races.
The Associated Press called House District 58 race in western Henrico County in favor of the Democratic two-term incumbent Del. Rodney Willett, a tech consultant and small business entrepreneur, who took 11,897 of votes, or 53.1%, over Republican challenger Riley Shaia, a physical therapist, who won 10,496 votes, or 46.9%. AP called the race with 95% of votes counted.
Off-off election year
Numerous incumbents retired or lost primaries after being drawn into the same districts as other incumbents. Particularly in the state Senate, longtime party leaders chose to bow out rather than face a primary battle, leaving younger and less moderate candidates running for office this fall.
Although 2023 was, at least in name, an off-off election year with no presidential or statewide races topping the ballots, legislative candidates in competitive districts saw a massive influx of money and heated rhetoric from both parties. High stakes, including Virginia’s status as the only Southern state without significant abortion restrictions, were riding on whether either party can take control of the commonwealth’s legislature, which is currently split, with Republicans running the House of Delegates and Democrats controlling the state Senate.
Although his name wasn’t on ballots, Youngkin’s presidential hopes also rested on Tuesday’s results, drawing national attention. If Republicans had won back control of the General Assembly, Youngkin could have mounted a plausible last-minute campaign for the 2024 GOP presidential nomination, politicos forecast. But with Democrats regaining power of just one of the legislative bodies, Youngkin will be unlikely to pass much of his stated agenda through the General Assembly, including a ban on abortions after 15 weeks and tax cuts for corporations, with the blue wave likely putting any presidential ambitions he has on hold, at least for 2024.
In a press conference Wednesday, Youngkin called the outcome “a razor-thin set of decisions” made by voters and noted the commonwealth’s recent history of changes in party control, downplaying Republicans’ disappointing results. “I think what that reflects is that we are a state that is very comfortable working together, working across party lines to get things done.”
In response to a reporter’s question about his presidential ambitions, Youngkin was predictably coy. “I have answered this question the same way for a long time. I am focused on Virginia. I have been in Virginia. My name is not on the ballot in New Hampshire. I have not been in Iowa. I am not in South Carolina. I am in Virginia, and I look forward to staying focused on Virginia, just like I have been.”
With issues such as parental influence in schools, reproductive rights, cannabis retail sales and corporate tax cuts in the balance, Democratic- and Republican-affiliated PACs sank millions into legislative campaigns this year. According to an Associated Press story, money raised by Virginia State Senate and House of Delegates candidates this year eclipsed totals from 2019. As of early November, Senate candidates had raised $80.8 million, compared to $53.6 million at the same point in 2019, and House candidates raised $77.5 million, compared to $67.5 million in 2019.
Both Republicans and Democrats emphasized the historic nature of the election, which could determine the state’s abortion, clean energy, education and tax policies for decades to come — although the parties differ widely on their overall goals.
Youngkin and state Republicans advocated to enact limits on abortions after 15 weeks, a rollback of Virginia’s current laws allowing abortions up to 26 weeks, although, in the third trimester, three doctors must sign off on the procedure as medically necessary. Democrats, meanwhile, have argued that the 15-week limit, posed as a reasonable compromise by Republicans, would be the first of many restrictions on abortion following the U.S. Supreme Court’s overturning of Roe v. Wade last year.
Parents’ involvement in their children’s K-12 education remained a hot topic, carrying on from Youngkin’s winning gambit in 2021’s gubernatorial race, when he focused attention on a Loudoun County sexual assault case, in which a 14-year-old male student sexually assaulted a female student in a school restroom and then was allowed to transfer to another high school, where he abducted and assaulted another student. The teen was later convicted in juvenile court, and in September, Youngkin pardoned one of the victims’ fathers, who had been arrested and charged with obstruction of justice and disorderly conduct at a county school board meeting.
Republican state Sen. Siobhan Dunnavant greets voters at a Henrico County polling place on Nov. 7, 2023. Photo by Katherine Schulte
Last week, the governor issued an executive order mandating that school districts inform parents within 24 hours of any overdoses involving their schools, after Loudoun County Public Schools waited more than 20 days to report that nine high school students had overdosed on pills suspected of containing fentanyl. Youngkin also has ordered schools to inform parents if their children use a different gender identity at school than is their assigned sex. He has also required that students participate in sports and use bathrooms based on their assigned sex, a mandate some school systems have refused to enforce — particularly in Northern Virginia.
A Washington Post-George Mason University Schar School of Policy and Government poll, conducted Oct. 11-16, showed a divided commonwealth going into the elections, with 47% of registered voters saying they would vote for a generic Democrat for delegate, and 43% for a Republican. Meanwhile, 70% of voters said education was the most important issue for them this year, followed by the economy at 68% and abortion rights at 60%.
According to VPAP, 789,848 people voted early across the state as of Monday, with Democratic voters making up about 60% of early voters, compared with about 40% for Republicans.
Virginia Department of Elections Commissioner Susan Beals said Tuesday afternoon that some localities’ ballots were longer than usual, with county supervisors, sheriffs and other local offices included, as well as state legislators. There was an issue with poll books reported at some Chesterfield County locations — but those were resolved by early afternoon, Beals said. At Williamsburg’s Matoaca precinct, where locally registered William & Mary students can vote, the Richmond Times-Dispatch reported “long lines all day.”
In Loudoun County, during Tuesday’s lunch hour at the town’s Ida Lee Park Recreation Center, West Leesburg voters turned out in a steady stream, which precinct chief Kevin Smith described as “one in, one out.” Morning was busiest, and 536 voters, out of a district of about 3,100, had cast their ballots by a little after 12:30 p.m., Smith said. Voters reported no issues or problems with machines, and the atmosphere outside, where the Loudoun County Republican Party had set up a tent to shade volunteers from the sun, was congenial as volunteers from either side of the aisle offered up sample ballots to would-be voters and shared occasional, friendly conversation across the sidewalk from folding chairs.
Steven Ritz, a retired Navy lieutenant commander voting at the recreation center, said he’s ordinarily a Republican but felt the party has strayed from the one he had known in the past, which he deemed “fiscally conservative, not rabid.” While he likened both parties to “monkeys flinging feces at each other,” he voted for Russet Perry, the Democrat who won the 31st District Senate seat. Perry, a former CIA officer who has also served as a county prosecutor, defeated Leesburg health-tech entrepreneur and District Donut co-founder Juan Pablo Segura in a race that focused largely on abortion and crime. Perry cast Segura in television ads as a “MAGA Republican” who wants to ban abortions; Segura volleyed back, casting his opponent as soft on crime and backed by “defund the police” groups.
Ritz voted with his gut. “Juan hasn’t been here in Leesburg that long. It looked to me opportunistic,” he said of Segura’s candidacy.
Other voters said they turned out particularly because of the abortion question. Shaun Meredith and his daughter, Rachel Meredith, said they voted for Perry. “Every woman should have a choice for her own body, to make that decision,” Rachel Meredith said.
In Virginia Senate District 16 in western Henrico County, voter turnout was steady overall with slight fluctuations throughout the morning in at least two precincts.
At about 12:50 p.m., the Echo Lake Elementary School polling location in the Coalpit precinct in Glen Allen had received 791 votes. “It’s been steady since we opened. There’s some periods where … we had a good little crowd for a while,” said Maurice Talley, a volunteer poll worker at the elementary school.
Incumbent Republican state Sen. Siobhan Dunnavant stopped at the school to greet voters as she campaigned at multiple polling locations during her ultimately unsuccessful battle against her Democratic challenger, state Del. Schuyler VanValkenburg. Voters who recognized Dunnavant or her name after an introduction were enthusiastic, she said. “They’re excited to be turned out. They say, ‘You’ve got this. This is great,’” she said.
Angie Madison, a Glen Allen Pilates instructor who said she isn’t loyal to one party and goes back and forth depending on the issues, said she voted for Democratic candidates Tuesday. “I’m trying to do my part by voting Democratic and trying to vote for abortion rights and all that stuff,” she said. “It feels like we’re going back in time versus forward in time, so I want to go forward in time.”
High stakes, high rollers
According to VPAP, the following state Senate candidates raised the most money, as of Oct. 31:
Democrat Russet Perry — $6,071,414
Republican Sen. Siobhan Dunnavant — $5,104,711
Democrat Del. Schuyler VanValkenburg — $5,069,960
Democrat Sen. Monty Mason — $5,043,533
Republican Juan Pablo Segura — $5,003,665
Among delegate candidates, Democrats dominated fundraising:
Democrat Joshua Cole — $3,816,605
Democrat Michael Feggans — $3,255,257
Democrat Josh Thomas — $3,198,811
Republican Del. Karen Greenhalgh — $2,778,182
Democrat Kimberly Pope Adams — $2,706,971
Not surprisingly, familiar names were among the biggest donors in the elections. The Virginia Senate Democratic Caucus donated $7.5 million for Democratic candidates, while Youngkin’s Spirit of Virginia PAC doled out $4.8 million to GOP candidates. Dominion Energy and the Clean Virginia Fund — a fund created by Charlottesville millionaire Michael Bills to dilute the political influence of Dominion — gave just over $4 million each to Senate candidates this year.
In the House races, the House Democratic Caucus donated $10.8 million, while the Republican Commonwealth Leadership PAC gave $4.1 million. Dominion and the Clean Virginia Fund made donations of $3.8 million and $3.6 million, respectively.
For those watching broadcast television in the days before the elections, negative ads ran thick and fast in competitive districts, and Youngkin blazed a trail across the state to get out Republican voters to the polls for early voting in October and early November. Democrats, meanwhile, called on Maryland Gov. Wes Moore, Department of Transportation Secretary Pete Buttigieg and gun-control advocate David Hogg to get out the vote.
In Richmond’s casino battle redux, Churchill Downs and Urban One, corporate backers of the proposed $562 million Richmond Grand Resort & Casino, sank more than $10 million into their campaign to pass the city’s second casino referendum, almost four times the amount spent in 2021 and more than for any individual candidate running this year. Ultimately, the second referendum failed by a 58% to 42% margin.
A poll of 800 likely Virginia voters shows a tight race for party control of the General Assembly, which is currently split between Democrats controlling the state Senate and a Republican majority in the House of Delegates. According to results released Tuesday by Christopher Newport University’s Wason Center for Civic Leadership, 42% of respondents say they intend to vote for the Democratic candidate in their district, while 41% say they plan to vote for the Republican.
Early voting started statewide in September, and Nov. 7 is Election Day, when Virginia voters will cast their ballots to fill all 140 seats in the Virginia Senate and the House of Delegates. Although the 2023 races are fondly known as off-off-year elections, the combination of statewide redistricting and a virtually unprecedented wave of retiring and ousted legislators has focused a great deal of national attention and PAC funding on a handful of tight local races that could determine the state’s political power structure for decades.
According to the Wason Center poll, which was conducted Sept. 28-Oct. 11 via phone, the top issues among voters are the economy and inflation (27% of all voters polled; 41% among Republicans), abortion (17% of all voters; 25% among Democrats), and K-12 education (12%).
President Joe Biden, who is seeking re-election in 2024, has 41% approval among Virginia voters polled.
Meanwhile, term-limited Republican Gov. Glenn Youngkin has 55% job approval, although majorities of Virginians polled disagreed with some of the governor’s positions, including leaving the Regional Greenhouse Gas Initiative (RGGI); 65% of voters polled say they want the state to remain in the carbon cap-and-trade program.
Also, 54% of voters polled say they oppose a 15-week abortion ban that Youngkin and other Republicans have promoted as a compromise between the state’s current law that permits abortions up to 26 weeks (although third-trimester abortions require approval by three doctors who find a woman’s health is at risk), and 12-week limits in other Southern states.
The CNU poll indicates that 39% of those polled agree with a ban on abortions after 15 weeks, although more than 80% of voters said they favor legal abortions if the mother’s life is threatened, or if the pregnancy is unviable or the result of rape. Sixty-five percent say abortion should be legal if the baby is likely to be born with severe disabilities or health problems.
A 58% majority say that the state should allow retail sales of recreational marijuana, a process that was started with the decriminalization of marijuana possession and legalization for medical and recreational use in 2021, when both General Assembly houses were under Democratic control. However, since Youngkin was elected and the GOP regained control of the House of Delegates in 2022, lawmakers have not yet passed a structure for retail marijuana sales.
Another hot issue — parents’ influence in K-12 schools — shows a split among voters; 81% say they trust teachers to make the right decisions for school-aged children, although 67% support requiring parental notification if a student wants to use pronouns that differ from their birth certificate, and 65% would prevent transgender athletes from participating in sports teams that match their gender identity.
As political observers have noted, if Republicans retain power in the House and reverse Democrats’ narrow hold in the state Senate, Youngkin will have an easy time passing abortion limits, corporate tax cuts and other GOP priorities — as well as being in a prime position if he decides to launch a late 2024 presidential bid. However, if Democrats maintain their Senate majority and/or regain control of the House, the remainder of the governor’s term is likely to be a long two years for Youngkin.
More money for candidates
Additionally on Tuesday, the Virginia Public Access Project released campaign finance reports for Sept. 1-30, reporting political fundraising in excess of $1 million for Senate candidates in tight contests:
Democrat Russet Perry — $1,624,983 raised in September; $461,967 balance on Sept. 30
Republican Sen. Siobhan Dunnavant — $1,259,177 raised; $493,052 balance
Democrat Sen. Monty Mason — $1,233,585 raised; $225,988 balance
Republican Juan Pablo Segura — $1,075,450 raised; $26,354 balance
In the House, the top fundraisers for September were:
Democrat Kimberly Adams — $1,004,909 raised in September; $355,222 balance on Sept. 30
Republican Del. Karen Greenhalgh — $979,477 raised; $865,317 balance
Democrat Michael Feggans — $915,996 raised; $300,020 balance
Republican Del. Kim Taylor — $902,686 raised; $562,086 balance
Meanwhile, Youngkin’s Spirit of Virginia PAC raised $6.5 million in September, and as of Oct. 7, the political action committee has a healthy $6.5 million balance, after spending $6.2 million from Sept. 1 to Oct. 7, primarily on GOP candidates in close races. The Democratic National Committee also donated $1.2 million to the state Democratic Party in September, as Biden directed last month.
RICHMOND, Va. — The Virginia General Assembly did not pass legislation this session to ensure paid sick days for employees, despite strong public support.
A 2021 study by Christopher Newport University found almost 90% of people surveyed support paid sick leave. Both House and Senate versions of the bill updated the current law that state employers only have to provide paid sick leave to certain home health workers.
Sen. Scott Surovell, D-Fairfax, introduced Senate Bill 886, with chief co-patron Sen. Creigh Deeds, D-Bath. Del. Candi Mundon King, D-Prince William, introduced the similar House Bill 2087.
The bills also would have removed current regulations that require grocery store employees and health care providers to work at least 20 hours each week or 90 hours per month to be eligible for paid sick days. The Department of Labor and Industry would also have developed guidelines for grocery store employers to provide sick leave by Dec. 1.
The employees can accrue a minimum of one hour of paid sick leave for every 30 hours worked, according to the bills. The earned paid sick leave can be carried over to the following year, but an employee cannot accrue or use more than 40 hours of paid sick leave in a year, unless the employer chooses a higher limit.
The Senate bill passed on a 22-18 party-line vote. Once the bill went to the House, it was killed in the Commerce and Energy subcommittee. The House bill failed to advance from the same committee.
Del. Elizabeth Guzman, D-Prince William, served as co-patron of Mundon King’s bill. Guzman also sponsored HB 1988, to allow all employees of private employers and state and local governments to accrue paid sick leave. The bill allowed an employee to transfer accrued sick leave to the following year. An employee could also donate accrued sick leave to another employee, with certain restrictions, according to the bill. The bill died in the same House committee as the others.
Guzman has advocated for paid sick leave since 2018. The General Assembly passed an amended version of Guzman’s legislation in 2021 that mandated paid sick leave for some in-home health care workers. The legislative attempts this session expanded on that work.
“The reason why we couldn’t, you know, leave COVID behind us is because people need to pay their bills and they continue to go back to work being sick,” Guzman said.
The bill failed to pass the House because it lacked Republican support, Guzman said.
Virginia law does not require employers to provide paid sick leave to all employees. The employer can determine how much sick leave an employee receives, according to Guzman.
The Virginia Interfaith Center for Public Policy advocated for Guzman’s bill in 2021. The bill provided five paid sick days per year for 30,000 home health care workers in Virginia, according to the VICPP website.
VICPP conducted a study in 2015 that reported 1.2 million workers in Virginia have no paid sick leave, according to Jase Hatcher, VICPP economic justice program manager. This totals to 41% of private sector workers in Virginia, according to Hatcher. Taking just 3.5 unpaid sick days can result in an average family losing a month’s worth of groceries, Hatcher said.
“That means that workers are choosing between taking care of themselves and their family member, or paying their bills,” Hatcher said. “That is not how we should do that.”
The VICPP study stated that 83% of registered Virginia voters supported a paid sick day standard, according to the VICPP website. Home health care providers need paid sick leave to tend to their health and also to help prevent further outbreaks of illness, VICPP stated. A 2020 study by Health Affairs found that paid sick leave reduced the spread of the coronavirus.
The VICPP believed the bill failed due to the “issues around its impact” on small businesses, Hatcher said. The Senate version of the bill added that a grocery store worker did not include any employee of a business that employs fewer than 25 employees.
“What it comes down to is there are a lot of folks who just don’t believe that there should be mandates or any mandates on paper, but as the data shows, without that mandate, 1.2 million workers go without,” Hatcher said.
The VICPP will continue to advocate for a paid sick leave bill during the next session, because it is one of the most important issues for workers, according to Hatcher.
“The U.S. is one of the very, very few countries in the world which does not have a national paid sick leave policy,” Hatcher said. “So making sure that we’re filling the gaps at the local and state level is really essential before we can get that nationally.”
Capital News Service is a program of Virginia Commonwealth University’s Robertson School of Media and Culture. Students in the program provide state government coverage for a variety of media outlets in Virginia.
Credit unions in Virginia would like to grow their membership, but a rule change relaxing the state’s policy is not in the cards this spring.
This year’s short General Assembly session — in an election year with a split legislature — makes it harder to pass bills with any controversial elements, and any major expansion of membership at credit unions will bring opposition from community banks. Under state law, credit unions cannot add more than 3,000 members at once without approval from the State Corporation Commission.
“Given the political circumstances, it’s unlikely we will see that this session,” says Carrie Hunt, president and CEO of the Virginia Credit Union League, an advocacy organization for Virginia-based credit unions, both state- and federally chartered.
“We’re still fishing for the federal legislation,” she adds, referring to a bill working its way through the U.S. Senate that would expand credit union fields of membership, or the legal definition of who is eligible to join a particular credit union under its charter. “It hinges on that.”
Meanwhile, Hunt says, “A lot of what we’re doing is … [playing] defense during the [state] legislative session.”
The same could be said, though, for Virginia’s community banks, which won a three-year battle against the credit union industry last August after the SCC ruled that the Virginia Credit Union could not expand its membership to the Medical Society of Virginia, which would have included up to 10,000 people.
The dispute arose in 2019, when the state Bureau of Financial Institutions approved Virginia Credit Union’s request to offer membership to MSV members. The Virginia Bankers Association and seven community banks appealed to the SCC in protest, arguing that the credit union — which at more than 300,000 members and $5 billion-plus in assets is larger than many smaller banks — would have too great an advantage over community banks.
Bruce Whitehurst, president and CEO of the VBA, said in December 2022 that the MSV expansion could have meant up to 40,000 new credit union members, if the 10,000 physicians and their family members all joined Virginia Credit Union — a move he says would have been a threat to banks. “The banking industry is never going to be OK with expansion,” he says, “unless it’s a level playing field.”
But Hunt, who joined VACUL in 2021 after a tenure as executive vice president of government affairs and general counsel for the National Association of Federally-Insured Credit Unions, says that credit unions are “not a competitive threat to banks. Bigger banks are a threat.”
Virginia Bankers Association President and CEO Bruce Whitehurst says the banking industry is “never going to be OK” with credit union expansion without an even playing field. Photo by Caroline Martin
Fixing financial deserts
In June 2022, the U.S. House of Representatives passed the Financial Services Racial Equity, Inclusion, and Economic Justice Act. Sponsored by U.S. Rep. Maxine Waters, D-California, the act is intended to increase access to financial services in underserved communities. An identical bill was introduced in the Senate in September 2022 by U.S. Sen. Alex Padilla, D-California, but was paused in committee. “I am proud to introduce this legislation to allow all federally chartered credit unions to expand their field of membership to underserved areas from the credit union member business lending cap,” Padilla said on the Senate floor.
Supported by the Credit Union National Association, the legislation would allow federally chartered credit unions to add underbanked areas to their fields of membership. It expands the definition of “underserved” to include any area more than 10 miles from a financial institution’s branch office. With banks closing many physical branches in response to the growth of electronic banking, CUNA says that more than 750 census tracts in the U.S. are now “financial deserts.”
“I would love for everyone in the commonwealth to have the opportunity to join a credit union,” Hunt says. “There are many people in banking deserts in the state.”
Also, she says, banking and credit union legislation often have bipartisan support, although in the divided U.S. and Virginia legislatures, “it tends to take longer to debate issues. It’s more an issue of priority-setting.”
Whitehurst agrees: “In Virginia, we’ve enjoyed the ability to work on both sides of the aisle. There tends to be a lot of agreement on economic issues.”
Often, state-chartered credit unions seek the same powers as their federally chartered peers after passage of federal legislation. In the 2022 General Assembly session, Del. Jeion Ward, D-Hampton, sponsored HB 1314, allowing any state-chartered credit union to expand its field of membership to include individuals and organizations in one or more underserved areas. The bill was continued to the 2023 session by the House Commerce and Labor Subcommittee.
Giving no ground
Whitehurst says that banks would only accept a major change in field of membership expansion if state-chartered credit unions are taxed — and in Virginia, credit unions could switch to federal charters to avoid new taxes, he notes. “You’ve got something that’s broken from a policy perspective.” Credit unions do not have to pay federal or state corporate income taxes, while banks in Virginia do, although credit unions are responsible for paying real estate and personal property taxes, the VACUL notes.
That’s the crux of the banks’ argument, that nonprofit credit unions operate under easier rules than community banks do, with a much lower tax burden. “Credit unions are exempt from some regulatory measures,” says Steve Yeakel, president and CEO of the Virginia Association of Community Banks. “We feel like they’re moving away from their original charter.”
Yeakel adds that he sees credit unions gaining enormous financial ground on banks in recent years. In 1934, the Federal Credit Union Act was signed into law by President Franklin D. Roosevelt, authorizing federally chartered credit unions, and state-chartered credit unions were founded before that, including the Virginia Credit Union, chartered in 1928 by a group of state employees. As member-owned, not-for-profit financial cooperatives, credit unions offer similar services as banks, but tout a broader range of loans and savings services at a cheaper cost to members.
Traditionally, credit unions were open only to people with the same employer or residents in the same community or state. However, in the 1980s, federal and state-chartered credit unions began to gain more flexibility in accepting members, leading to larger memberships and assets, while still bypassing corporate income taxes. Today, Yeakel says, some credit unions can undertake major financing deals that many bankers view as a departure from credit unions’ initial missions.
As an example, he points out that McLean-based Pentagon Federal Credit Union, aka PenFed, is partnering with Goldman Sachs Group Inc. on an $847 million private construction loan for The Wharf, a waterfront development in Washington, D.C. Also, in other states, credit unions have purchased community banks, making 13 acquisitions nationwide during 2022.
Despite these disputes, the short General Assembly session — with a divided legislature facing elections this fall — is largely a time to let sleeping dogs lie, Whitehurst says. “In a short session, [legislators] don’t like to see industry vs. industry.”
Crypto and cannabis
If the central question of membership expansion is on hold, that doesn’t mean all banking legislation is. For instance, Hunt’s paying close attention to credit unions’ rights regarding cryptocurrencies.
According to CUNA, “even in a more regulated, consumer-friendly form, digital assets such as stablecoins and retail digital currencies represent an existential threat to credit unions’ deposit funding.”
In essence, cryptocurrencies don’t fall under the governance of the Federal Reserve to authenticate value or regulate transfers, although the Biden administration and members of Congress are taking action to rein in the growing industry.
Following the late 2022 implosion of crypto exchange FTX, in which founder Sam Bankman-Fried was indicted on money laundering charges and federal fraud offenses, U.S. Sen. Elizabeth Warren, D- Massachusetts, and U.S. Sen. Roger Marshall, R-Kansas, filed legislation in December 2022 to close some loopholes in cryptocurrency that create security risks related to international money laundering.
Meanwhile, in Virginia, banks gained the right in July 2022 to provide customers with “virtual currency custody services” — in other words, cryptocurrency assets that exist only on a blockchain — as long as the banks have proper risk-management protocols.
Hunt says one of her goals is to achieve similar state legislation for Virginia-chartered credit unions. According to the National Credit Union Administration, federal credit unions can use distributed ledger technology used to support cryptocurrencies if they stay within federal regulations. A House of Delegates bill permitting credit unions to provide cryptocurrency services passed unanimously in the Committee on Commerce and Energy in mid-January.
Other areas of legislative interest for banks and credit unions include marijuana legislation, both federal and state-level, particularly regarding financial institutions. A major issue for banks and credit unions is the risk of criminal prosecution under federal laws if they allow marijuana businesses to create banking accounts. At the end of 2022, the Senate failed to pass the Secure and Fair Enforcement Banking Act, which would have created a safe harbor for such transactions. The bill has bipartisan support and proponents are hopeful it will pass in 2023.
In 2023, Virginia’s General Assembly is expected to take up some medical marijuana legislation, although full regulation of
retail marijuana sales is likely to be put on pause until 2024, lawmakers have said. A bill filed by Republican Del. Keith Hodges would permit the Virginia Cannabis Control Authority to issue marijuana retail licenses in July 2024, and in July 2023, some pharmaceutical and industrial hemp processors would be allowed to sell cannabisproducts to adults age 21 or older. A second House bill would allow the authority to issue marijuana licenses as soon as Jan. 1, 2024, but no sales could occur before Jan. 1, 2025.
Cybersecurity and private deposits are also important matters for credit unions, notes Brian Schools, president and CEO of Virginia Beach-based Chartway Federal Credit Union, a federally chartered institution that’s also a VACUL member. In December 2022, VACUL members met with Gov. Glenn Youngkin to discuss an array of subjects, including membership growth, cryptocurrency and the possibility of allowing state-chartered credit unions to accept municipal deposits. It’s a VACUL priority to authorize state credit unions to hold public deposits, just like federal credit unions and banks already can.
Hunt says that credit card fraud costs are also a significant issue for credit unions, which pay part of the fees to customers who were victims of fraud, along with the card companies, but fraud impacts all financial institutions.
According to a September 2022 study by fraud prevention software company Featurespace and payments news site PYMNTS, 62% of all financial institutions reported an increase in fraudulent transactions in 2021 and 2022, but smaller banks and credit unions — holding between $5 billion and $25 billion in assets — suffered the most, incurring higher costs per incident. About 66% of smaller institutions reported such transactions.
As for banks, “we are tracking what may or may not happen with corporate income tax,” Whitehurst says. In December 2022, Youngkin proposed a corporate tax cut from 6% to 5%, as well as a 10% income tax deduction for small businesses.
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