RICHMOND — For the last time in his four-year term, Gov. Glenn Youngkin presented the economic outlook for the commonwealth to the General Assembly money committees. According to the governor, the forecast looks rosy.
“We are in a stronger financial position today because we have more money and less uncertainty than we did just six months ago,” he said Thursday. “Many of the things that caused some uncertainty earlier in the year have been addressed. The stock market is at an all-time high. Trade deals are getting cut. And D.C. gridlock has not materialized.”
But Democrats said that analysis did not sufficiently take into account federal cuts to programs like Supplementary Nutrition Assistance Program (SNAP) and Medicaid.
The state collected $572 million more than expected last fiscal year.
“The outperformance we saw in (fiscal year) 2025, and see again in the first month of 2026, combined with carry-over balances from 2025, creates $1.7 billion in cash cushion as we head into fiscal year 2026,” Youngkin said.
“Nobody is saying that we will not have challenges there,” said Secretary of Finance Stephen Cummings. “Thanks to conservative forecasting, we don’t have to do much to just deliver what is the underpinning of a current budget for 2026.”
Some of those challenges include the cuts to SNAP and Medicaid.
A report from The Commonwealth Institute, a left-leaning economic justice research group, found that as states shift to shouldering 75% instead of 50% of the administrative cost of SNAP, Virginia would have to pay an additional $158 million over the 2027-2028 biennium.
Additionally, new federal law includes a new state matching requirement for SNAP based on each state’s payment error rate. Virginia currently has an error rate of 11.5%, according to the Department of Social Services, which means that beginning in fiscal year 2028, it would be responsible for a 15% state match, currently totaling $270 million per year.
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That expected new direct cost could go down if Virginia reduces its error rate. Youngkin issued an executive order earlier this week convening a work group to take steps to reduce errors in SNAP benefit processing at local departments of social services.
Youngkin also asserted that “not a single Virginian is losing access to Medicaid, or getting kicked off the program” as a result of federal cuts. Democrats on the money committees disputed the assertion.
“Between 2028 and 2042, UVA and VCU, the two providers (of) last resort for Medicaid patients, will see a decline in reimbursement from $499 million a year to $233 million a year,” said Sen. Creigh Deeds, D-Charlottesville. “Is it your position that nobody’s going to lose Medicaid service because of that more than 50% cut over 14 years?”
“It’s our position that nobody will lose access to Medicaid, and that these cuts will be phased in gradually, and that hospitals are in a financial position to be able to absorb this over time,” Cummings responded.
“When you say ‘lost’ their coverage, they chose not to go perform the activity that was required to keep their coverage,” he said, referencing work requirements, in response to another question. “It’s a choice. It was not lost.”
Senate Majority Leader Scott Surovell, D-Fairfax, also pushed back on that analysis.
“The Congressional Research Service, which is the agency America relies upon to tell us the answers to these things, says that millions of Americans are going to lose their Medicaid,” he said. “And I want to know why the governor thinks that the Congressional Research Service, that Congress relies on, doesn’t know what they’re talking about, because apparently he’s decided he’s smarter than that.”
Youngkin said his December budget proposal, the last of his term, would take into account Medicaid and SNAP cuts.
It’s not clear yet if the General Assembly will convene a special session in September to discuss the impacts of federal cuts. Youngkin told reporters he didn’t think it was necessary.
“I believe I can present a budget in December that will address the issues at hand,” he said. “Whether they come back or not, that’s their decision, but I have to say, I think that decision might be driven by something else other than a necessity of coming together.”
Kate Seltzer, 757-713-7881, [email protected]
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