Last week, both Chambers released their respective amendments to the introduced budget for fiscal years 2027 and 2028. The House and Senate amendments include significant changes to the budget introduced by former Governor Youngkin. Both bills will go to a conference committee to reconcile the substantial differences. The budget items outlined below will significantly affect Virginia’s business climate.
As the 2026 General Assembly moves closer to adjournment on March 14, your voice matters now more than ever. If you haven’t already participated in our call to action regarding paid leave legislation, we strongly encourage you to take the time to have your voice heard.
Paid Leave Budget Amendments
Item 352 #2h Labor FY26-27 FY27-28 Department of Labor and Industry $6,500,000 25.00 $3,635,000 25.00 GF FTE
Explanation
(This amendment provides $7.1 million over the biennium for the Department of Labor and Industry to hire 25 additional employees for enforcement of Virginia’s labor laws and to develop a comprehensive wage, leave, and non-compete case management system. The funds provided in this amendment will allow the Department of Labor and Industry to implement House Bills 5, 20, 238, 260, 339, 627, 636, 670, 675, 923, 930, 944, and 1218 of the 2026 General Assembly. Companion amendments to this item and central accounts fund remaining staffing and personnel costs associated with House Bill 5.)
Item 352 #3h Labor FY26-27 FY27-28 Department of Labor and Industry $0 0.00 $2,107,738 14.00 GF FTE
Explanation
(This amendment provides $2.1 million in fiscal year 2028 from the general fund for the Department of Labor and Industry to hire 14 additional staff to investigate paid sick leave-related complaints. A companion amendment to this item provides $3.0 million for the Department of Labor and Industry to develop new systems to track leave, wage, and noncompete-related violations.)
Item 353 #1h Labor FY26-27 FY27-28 Department of Labor and Industry $106,133 $504,680 GF
Explanation
(This amendment provides $610,813 over the biennium from the general fund to support the Virginia Occupational Safety and Health Program for the purposes of working on heat stress regulations described by House Bill 1092 of the 2026 General Assembly.
Item 359 #1h Labor Virginia Employment Commission
Explanation
(This amendment authorizes a treasury loan for the implementation of House Bill 1207 of the 2026 General Assembly that requires the Virginia Employment Commission to establish and administer a Paid Family and Medical Leave program with benefits beginning January 1, 2029. Funding for the program is provided through premiums assessed to employers and employees beginning in 2028. Start-up costs for the program are expected to be $116.5 million.)
Item 471 #1h Central Appropriations FY26-27 FY27-28 Central Appropriations $0 $11,125,212 GF
Explanation
(This amendment provides $11.1 million from the general fund in fiscal year 2028 for the Department of Medical Assistance Services and Department of Aging and Rehabilitative Services to support costs of providing paid sick leave for personal care attendants. Companion amendments to the Department of Labor and Industry provide funding for systems development and personnel.)
Senate Budget Amendments
Item 352 #1s
Labor Law Support for Legislation
Explanation
(This amendment provides $4.8 million GF the first year, $2.8 million GF the second year, and 10.0 positions to support the fiscal impact of legislation related to labor law as passed by the 2026 General Assembly, such as paid sick leave, misclassification of workers, prevailing wage rates, and heat illness protection standards. The first year funding includes one-time system development costs.)
Item 359 #1s
Explanation
(This amendment authorizes a treasury loan for the implementation of Senate Bill 2 of the 2026 General Assembly, which requires the Virginia Employment Commission to establish and administer a paid family and medical leave program with benefits beginning January 1, 2029. Funding for the program is provided through premiums assessed to employers and employees beginning in July 1, 2028.)
Taxation
The introduced budget included significant tax policy changes, one being the market-based sourcing and total conformity to federal tax policy changes enacted in 2025. This language was entirely removed and replaced with other proposals.
Housing
Both Chambers included budget amendments with substantial funding for housing. Senate amendments propose an additional $50 million to the Virginia Housing Trust Fund, with $20.6 million for pilot program for mixed-income housing developments and infrastructure. The House amendments include an additional $12.5 million to the Fund. An addtional $5 million towards the Virginia Residential Development Infrastructure Program created by HB 196 in the 2026 session and $25 million to capitalize the Virginia Housing Revolving Loan Fund created by HB 820 in the 2026 session.
For a complete list of all bills tracked by VRF, please click here.
