State budget blocks second casino referendum in Richmond

State lawmakers are poised to block Richmond from holding a second referendum on casino gambling this year.

State of play: After city voters shot down plans to put a casino in South Richmond last year, Richmond leaders weren't ready to give up on the project and secured a judge's order to put it on the ballot again this November.

Yes, but: State House and Senate budget negotiators released their compromise spending plan over the weekend, which explicitly bars the city from holding a second referendum this year.

• And, if Richmond leaders were to ignore the ban or win a legal challenge allowing the referendum to proceed, the legislation also bars the state lottery from issuing Richmond a casino license.

What's happening: Per the plan, lawmakers will instead study whether nearby Petersburg would be a good fit for the project. City leaders there, who not too long ago were facing a complete financial collapse, say they could use the revenue to build schools and repair infrastructure.

Flashback: In 2020, Virginia lawmakers gave five cities around the state permission to hold referendums allowing casino gaming.

• Richmond is the only city where voters rejected the proposal.

What they're saying: State Sen. Joe Morrissey, a Democrat who represents Richmond and Petersburg, is thrilled. He's been one of the most vocal proponents for moving the project 30 minutes south to Petersburg, a small city he said needs the economic boost more than Richmond.

• "Clearly and unquestionably, Petersburg is the much more deserving city for economic reasons," he told Axios. "And that's coming from the state senator that represents both."

Meanwhile, Mayor Levar Stoney's press secretary, Jim Nolan, didn't return texts or phone calls on Monday.

• Stoney backed plans for another referendum, calling the initial failure a "missed opportunity."
• The city estimated the project would generate $30 million in annual tax revenue.

Plus: The state budget also includes $4 billion in tax cuts and 5% pay raises for teachers and state employees.

• It delivers partial victories to Gov. Glenn Youngkin, who campaigned on a promise to eliminate the state grocery tax. The final compromise eliminates the 1.5% state portion of the tax but leaves in place the 1% collected by cities and counties.

What's next: The budget, which was delayed by months of behind-the-scenes negotiations, goes before the full General Assembly on Wednesday for a final vote.