Last Monday, Governor Youngkin released his proposed changes to the state budget that was passed by the General Assembly in February. The Commonwealth Institute has updated their budget “side-by-side” to assist in quick comparison, showing key General Fund changes passed by the General Assembly in February and the governor’s recent amendments compared to the current budget. The Governor offered more than 200 amendments to the state budget.

Here are some updates to bills of interest to our members that VFN highlighted earlier in the session:

• The Governor made permanent the General Assembly’s choice to improve the state’s Earned Income Tax Credit (EITC), which will help low-income working families access more of the critical support that the state EITC provides for years to come.
• Several affordable housing bills were vetoed by the Governor, and a few were passed. Here’s the legislative tracker from Virginia Housing Alliance that shows the status of housing-related bills they are tracking this session.
• The minimum wage bill (HB1625) was vetoed.

The General Assembly will reconvene tomorrow (April 2) to address the governor’s vetoes and proposed amendments. Here’s what comes next: 

• For vetoed bills – The General Assembly can override the governor’s vetoes with a two-thirds majority vote in both houses. 
• For bills the governor has amended – The General Assembly can accept or reject the proposed amendments. If amendments are accepted, the amended bill is sent back to the governor for his signature. If amendments are rejected, the bill in its original form is sent back to the governor.  

At that point, the governor can take the following actions: 

• Sign the bill into law.
• Veto the bill.
• Do nothing – if he takes no action within 30 days, the bill becomes law without his signature.  

Impacts of Federal Workforce & Funding Reductions

With a federal workforce exceeding 300,000 and over $20 billion in federal funding at stake, Virginia is poised for a major impact on federal workforce and funding reductions. Legislators in Virginia are bracing for the trickle-down effects of federal changes, which could dramatically impact the state’s budget and funding models. (Elizabeth Toole, McGuire Woods Consulting, March 25, 2025).

For example, the Virginia Department of Health is facing layoffs after the Trump administration announced it’s cutting $11.4 billion in COVID-related funding nationwide (Axios Richmond, March 26,2025).

On Feb. 4, 2025, Virginia Speaker of the House Don Scott announced the creation of short-term emergency committee to address federal program cuts and layoffs. The House committee met once at the end of the regular legislative session. The committee’s objective is to analyze potential impacts that reduced federal funding has on Virginia’s budget, engage with stakeholders and produce policy recommendations on how to combat any negative effects. State stakeholders include the Department of Planning and Budget and Virginia Employment Commission among others.

On March 8, 2025, Senate Finance and Appropriations Chairwoman Louise Lucas announced a similar Senate subcommittee. The Senate subcommittee will have its first meeting on April 2, 2025, the morning of the legislature’s reconvened session. The House committee will meet again on April 8, 2025, in northern Virginia. The Weldon Cooper Center at the University of Virginia will release its next economic outlook for the commonwealth in April, which will show any signification economic changes that may need to be addressed by the legislature.

VFN’s Participation in Recent Policy Convenings

VFN staff and several of our members participated either in person or online in the 2025 Budget and Tax Briefing sponsored by the Economic Opportunity Funders, a national philanthropy-serving organization. The purpose was to provide a better understanding of the new political environment and its impact on social policy, identify what’s at stake and in play at the federal and state levels, discuss coordinated efforts working to shape the budget and tax fights ahead, and discuss implications for philanthropy and strategies for action. Speakers discussed the federal budget and tax outlook and the 2025 tax debates that include the $4 trillion in tax cuts from the expiring 2017 Tax Cuts and Jobs Act. In addition, state budgets are set to shrink in 2025 in the era of post-pandemic federal aid, spending, and tax cuts come to an end. Anticipated cuts to Medicaid, SNAP, and other federal safety net programs will shift costs to states like Virginia, forcing policymakers to choose between raising taxes or cutting spending. For example, Virginia’s Medicaid expansion in 2018 included a “trigger” provision, meaning  that if federal funding levels were altered, the state could be forced to scale back or eliminate coverage for those who rely on it.

VFN has also been a part of Community Convenings to Protect and Strengthen the DMV Region, sponsored by the Center for Public & Nonprofit Leadership at the McCourt School of Public Policy at Georgetown University, and the Greater Washington Community Foundation. Three convenings with philanthropy and nonprofit organizations have been planned, two in March and one in April. We continue to particulate in regular monthly calls to discuss priorities for collaborative action.

Update on the Executive Order on DEIA (United Philanthropy Forum)

On March 19, 2025, the EEOC and DOJ released joint guidance documents interpreting the January 21 Executive Order on DEIA. While the documents do not explicitly define “illegal DEIA,” they establish a framework for how DEIA activities will be scrutinized under Title VII of the Civil Rights Act.

Key Takeaways for Philanthropic Organizations:

1. Heightened Scrutiny of Common DEIA Practices: The guidance targets several widely-implemented DEIA initiatives, including:
   • Diverse hiring slates or practices that consider protected characteristics
   • Employee resource and/or affinity groups with membership limitations
   • Mentoring, sponsorship, or networking programs based on protected characteristics
   • Training or development programs that consider demographics
      
2. New Legal Risks Identified: The guidance introduces several concerning interpretations:
   • DEIA training itself could potentially create a hostile work environment claim
   • Employees who oppose DEIA training may have legal protection from retaliation
   • Business justifications for diversity (including operational benefits) may not provide legal protection
      
3. Universal Application: The EEOC emphasizes that Title VII protections apply to all workers, regardless of majority/minority status, potentially opening the door to reverse discrimination claims.

Legal experts note that while “illegal DEIA” remains undefined, the guidance signals heightened regulatory scrutiny that requires organizations to proactively align DEIA policies with Title VII standards. The broader philanthropic sector, particularly organizations with significant assets, may face targeted enforcement actions. See April 2 webinar, below.

Upcoming Policy Briefings of Potential Interest

Policy briefings sponsored by United Philanthropy Forum (UPF) that are open to philanthropy-serving organizations and our foundation members:

Protecting Philanthropy’s Independence and Values: Executive Order Advocacy Strategies
📆 Wednesday, April 2, 1:00 – 2:00 pm ET
🔗 Register for the Webinar

The Leadership Conference on Civil and Human Rights will host a virtual briefing in partnership with the Forum to discuss the implications of the administration’s executive actions targeting Diversity, Equity, Inclusion, and Accessibility (DEIA) initiatives for philanthropic organizations. This briefing will examine how recent executive orders affect both philanthropy and the broader nonprofit sector and explore philanthropy’s advocacy approach and response.

Funder Briefing: State & Local Advocacy in the New Political Landscape
📆 Friday, April 11, 12:00 – 1:00 pm ET
🔗 Learn More About the Funder Briefing

The Georgetown University Center for Public & Nonprofit Leadership and the Forum’s State + Local Advocacy Alliance are co-hosting State and Local Advocacy Strategies in the New Political Landscape, a webinar that will explore ways that funders can support grantees and protect communities.