RICHMOND, Va. — Virginia is set to soften the penalties for people caught stealing smaller-dollar items under a compromise announced by Democratic Gov. Ralph Northam and Republican lawmakers.

The governor and Republican leaders outlined the deal Thursday, which would raise the state’s felony theft threshold from $200 to $500 while also strengthening the state’s criminal restitution system.

Virginia has kept its felony bar at $200 since 1980 and is tied with New Jersey for the lowest in the country. Northam said raising the threshold was a legislative priority, but had previously pushed for it to be set at $1,000.

“This is a compromise,” Northam said. “We think it’s an important step.”

Republicans have been split on raising the threshold. The GOP-held Senate has approved raising it to $500, but House Republicans have traditionally blocked it.

GOP Del. Rob Bell said he’s still skeptical of raising the threshold but was willing to accept the compromise in exchange for Northam’s support to overhaul how the state collects and pays out criminal restitution.

“The restitution collection system in Virginia is and has been a disgrace,” Bell said.

As part of the compromise, Northam will support GOP-legislation that was previously vetoed by former Gov. Terry McAuliffe. The bills are designed to put new checks in place to ensure criminals pay their ordered restitution and victims are paid back what they lost.

The legislation still needs to pass both chambers and be signed by Northam before becoming law.

This was the second compromise announced by Northam and GOP House Speaker Kirk Cox this week, with the first involving a pilot program aimed at reducing outdated state regulations.

Northam frequently touted his ability to work with lawmakers in both parties on last year’s campaign trail. His biggest test on compromise, passing Medicaid expansion through a GOP-controlled General Assembly that’s traditionally opposed it, remains. Northam said there have been “very productive discussions” on the issue.