A blog post by Robin Mockenhaupt, VFN’s Director, Policy & Advocacy
General Assembly Updates
The General Assembly reconvened on Wednesday, April 2. The Virginia House of Delegates signed off on 41 of Gov. Glenn Youngkin’s proposed changes to the $188 billion state budget, rejecting the other 164 without floor debate. The governor wanted to cut $300 million from the budget to plug anticipated shortfalls linked to waning federal support. The Virginia Senate rejected an additional eight of the governor’s amendments during the one-day veto session, including two proposals to make higher tax relief permanent for working Virginians.
Gov. Youngkin will have 30 days to act on the steps taken by the General Assembly. He can either veto or sign bills without the amendments rejected by the General Assembly. Lacking a two-thirds majority in either chamber, also known as a veto-proof majority, Democrats were unable to override any of the Republican governor’s vetoes on Wednesday.
Here are a few resources with additional information about the state budget and the General Assembly’s actions:
Lawmakers push back on Youngkin budget, pass bipartisan bills on probation, dangerous driving, Virginia Mercury
- Assembly backs 33 Youngkin changes, Richmond Times Dispatch
- General Assembly approves budget amendment to expand flood relief, fund school construction, Cardinal News
- The Commonwealth Institute has updated their budget “side-by-side” showing key General Fund changes passed by the General Assembly in February and the governor’s recent amendments compared to the current 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. For example, HB2245 was approved, which ensures that affordable housing is assessed and taxed correctly.
- 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.
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 (Elizabeth Toole, McGuire Woods Consulting, JD Supra, March 25, 2025). Legislators in Virginia are bracing for the trickle-down effects of federal changes, which could dramatically impact the state’s budget and funding models.
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. The House committee will meet again on April 8, 2025, in northern Virginia.
On March 8, 2025, Senate Finance and Appropriations Chairwoman Louise Lucas announced a similar Senate subcommittee. The Senate subcommittee on Federal Impacts to Resources had its first meeting on April 2, 2025, the morning of the legislature’s reconvened session. You can view the video of this meeting here. 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
We continue to work closely with United Philanthropy Forum (UPF) to learn more about how the current environment is affecting philanthropy, and how we might join with other philanthropy serving organizations (PSO’s) in a collective voice to advocate for philanthropy and the nonprofit sector. UPF has a resource page to inform the members of philanthropy-infrastructure organizations about executive actions impacting the sector and the communities we work in and with. This will be updated as more information becomes available.
For example, VFN participated in the virtual briefing with The Leadership Conference on Civil and Human Rights and the UPF to discuss the implications of the administration’s executive actions targeting Diversity, Equity, Inclusion, and Accessibility (DEIA) initiatives for philanthropic organizations. 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:
- 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
- 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
- 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. On the UPF webinar on 4/2, it was emphasized that the Title VII Civil Rights laws have not changed, and these Executive Actions are meant to create confusion and reduce lawful equitable grantmaking practices. VFN will continue to participate in policy meetings and monitor changes that might have implications for our members.
Budget and Tax Briefing
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.
DMV Community Convenings
VFN has 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.