May 24, 2023
 |
Virginia General Assembly

RICHMOND, Va. (AP) — Even a short-term breach in the federal debt limit would rattle an already fragile state economy, Virginia finance staffers on Tuesday told lawmakers, who say that looming uncertainty is now the main reason no budget deal is imminent.

Since the politically divided General Assembly’s regular session ended in February without an agreement on adjustments to the two-year spending plan that became law last year, budget negotiators have been meeting sporadically to continue talks. But, at odds over how to best allocate a revenue surplus, they have continually pushed back the target for reaching a deal, citing concerns about instability in the banking sector, the possibility of a recession and, more recently, the debt limit standoff.

After the Senate Finance and Appropriations Committee heard Tuesday morning’s presentation about the risks of a potential debt limit breach, the panel’s co-chair George Barker said negotiators still believe the best course is to wait to see what transpires in Washington.

Virginia’s budget is being held up in negotiations due to a primary challenge to the Democratic Senate Majority Leader being challenged in a primary by a far left wing opponent. No movement is expected on the talks until the primary season is over at the state level.

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