December Government Affairs Spotlight
December 18th, 2025

Governor Youngkin Releases Proposed Budgets 

On December 17, Governor Youngkin released his budget proposal for fiscal years 2027 and 2028, as well as amendments to the budget for the FY2025–FY2026 biennium (the caboose budget). While the both the new budget and the caboose budget are expected to be revised to reflect the priorities of Governor-elect Spanberger and the General Assembly, items of interest to the business community include: 

  • Economic Development  
  • $30 million in FY2027 and $20 million in FY2028 for the Virginia Business Ready Sites Program 
  • $35 million to complete design and perform site improvements for the planned inland port in Washington County 
  • Nearly $50 million total funding for custom and discretionary economic development incentive grant programs 
  • $50.6 million for the Virginia Growth and Opportunity Fund 
  • Education and Workforce 
  • $382.9 million for a 2% salary increase in FY2027 and FY2028 for public education instructional and support positions 
  • $137 million to create approximately 6,745 new slots in the Child Care Subsidy Program 
  • $1 million in matching funds to incentivize employer contributions to affordable child care subsidy accounts 
  • $27.2 million in new funding for the New Economy Workforce Credential Grant Fund (FastForward) 
  • $12 million to the Virginia Economic Development Partnership to support employer-focused activities that further the goal of providing all postsecondary students a paid internship opportunity, in addition to $17 million to the State Council on Higher Education of Virginia for the same goal. 
  • $11.4 million to expand nursing, medical, and other health sciences education programs 
  • $15 million for increased need-based financial aid for in-state undergraduates 
  • Healthcare and Life Sciences 
  • $2.9 billion for Medicaid, Children’s Service Act services, and child health care 
  • Taxation 
  • Conformity to provisions of H.R. 1, including increasing the Section 179 expensing limit to $2.5 million, deductions for domestic research, increasing the business interest deduction, and the special depreciation allowance for qualified property 
  • Extension of the sales and use tax exemption for data center equipment from 2035 to 2050 
  • Replacing the cost-of-performance apportionment method with market based sourcing 

Governor-elect Spanberger Announces First Cabinet Secretary Picks  

Governor-elect Abigail Spanberger has begun assembling her cabinet as she prepares to take office in January 2026. Among these early selections are current members of the Virginia House of Delegates, whose appointments will prompt special elections to fill their legislative seats. See below for a full list of her current cabinet picks announced to date. 

  • Secretary of the Commonwealth — Delegate Candi Mundon King
    Delegate Candi Mundon King has been appointed as Virginia’s next Secretary of the Commonwealth, where she will oversee gubernatorial appointments, clemency requests and constituent services.  
  • Secretary of Natural and Historic Resources — Delegate David Bulova
    Delegate David Bulova has been named Secretary of Natural and Historic Resources, where he will oversee environmental conservation, historic preservation, and natural resource policy for the Commonwealth.  
  • Secretary of Health and Human Resources — Marvin Figueroa
    Spanberger’s first announced cabinet pick, Figueroa will oversee key agencies that serve vulnerable populations across Virginia. He previously served as Deputy Secretary of Health and Human Resources under Governor Ralph Northam. 
  • Secretary of Agriculture and Forestry — Katie K. Frazier
    Frazier, a leader with agricultural expertise from the Shenandoah Valley, will oversee key sectors of Virginia’s rural economy. 

An experienced transportation policy professional with prior service as Virginia’s Deputy Secretary of Transportation and work in national transportation planning, Donohue has been appointed Secretary of Transportation. He will oversee the Commonwealth’s transportation strategy, infrastructure planning, and mobility initiatives in the coming term. 

Special Elections 

The November general election and pending appointment of sitting legislators to Cabinet positions in the Governor-elect’s administration have prompted several special elections across the Commonwealth. These include: 

  • Senate District 15 – To be held on January 6, 2026, this election will fill the vacancy created by the resignation of Lieutenant Governor-elect Ghazala Hashmi. Delegate Mike Jones won the Democratic nomination and will resign from the House of Delegates. Delegate Jones will face Republican nominee John Thomas. Senate District 15 includes parts of the City of Richmond and Chesterfield County. 
  • House District 77 – To be held on January 6, 2026, this election will fill the vacancy created by the resignation of Delegate Mike Jones. Democratic nominee Charles Schmidt will face Republican nominee Richard Stonage, Jr. House District 77 includes parts of the City of Richmond and Chesterfield County. 
  • House District 23 – To be held on January 13, 2026, this election will fill the vacancy created by the resignation of Delegate Candi Mundon King. Democratic nominee Margaret Angela Franklin will face Republican nominee Vern Robinson. House District 23 includes parts of Prince William and Stafford Counties. 
  • House District 11 – To be held on January 13, 2026, this election will fill the vacancy created by the resignation of Delegate David Bulova. Gretchen Bulova won the Democratic nomination for the election. At time of writing, this election is uncontested. House District 11 includes the City of Fairfax and parts of Fairfax County. 

Additional appointments by the Governor-elect may prompt additional special elections. The Virginia Chamber will continue to follow these developments and provide insights on how these leadership changes and legislative transitions may influence policy priorities central to Virginia’s business community.