Will Virginia COVID “Rescue” Be Big and Bold or Come in Dribs and Drabs?

by James A. Bacon

About two weeks ago, Secretary of Finance Aubrey Layne floated a trial balloon on Bacon’s Rebellion, suggesting that Virginia do something “transformational” with the $6.8 billion the federal government is showering upon Virginia in the latest COVID-relief package, the American Rescue Plan.

Transformational? Like what? Like patching up Virginia’s under-funded unemployment insurance program, extending affordable broadband into every corner of the state, or fixing antiquated school buildings, Layne suggested.

Now others are beginning to entertain similar thoughts. Reports Michael Martz with the Richmond Times-Dispatch:

“This is an extraordinary opportunity to meet long-term obligations and challenges,” said Michelle Gowdy, executive director of the Virginia Municipal League, in a letter to General Assembly leaders on Tuesday that asks them to work with local governments and Gov. Ralph Northam to collaborate on using billions of dollars coming to them under the American Rescue Plan Act.

Governor Ralph Northam is expected to call a special session in June to determine how to spend the state’s $3.8 billion share. The problem is that the commonwealth, its localities and school districts have gotten minimal guidance on precisely how this windfall will be allocated. Here’s what we do know, according to Martz:

Local government officials expect close to $3 billion under the law, most of it coming directly to Virginia’s 95 counties and most of its 38 cities, with the state distributing money to small cities and towns that have fewer than 50,000 residents.

But the American Rescue Plan Act also will send $2.2 billion to local school divisions in Virginia, especially to help students overcome the “learning loss” from a year of closed school buildings and virtual education on their personal computers.

It will provide a separate pot of funding for building broadband networks across Virginia to serve residents who haven’t been able to reach or afford internet service that proved essential to remote work and learning during the pandemic. It includes funding for public transit and transportation, and hazard pay for essential workers.

The package has money to help small businesses and hard-hit industries, such as tourism, travel and hospitality…

The package includes 32 separate pots of federal funding, according to Gowdy at the municipal league, which represent cities, towns and eight counties. “It is really daunting.”

Bacon’s bottom line:

the federal funds have lots of strings attached. It’s not clear at all that Virginia will have the flexibility to do something transformational. There are about two months between now and the June special session to figure out (1) how the federal funds will be allocated, (2) what limits there are on the spending, (3) what go-big-or-go-home priorities Virginia should set, and (4) how to coordinate the efforts of local governments, school districts, and state agencies to accomplish those objectives.

Good luck with that.

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3 responses to “Will Virginia COVID “Rescue” Be Big and Bold or Come in Dribs and Drabs?”

  1. DJRippert Avatar

    Oh this is rich. So the Imperial Clown Show in Richmond will be ham strung because the feds want the counties and cities to decide how to spend the federal dollars rather than sending that money through the “counting room” in Richmond where the skim will be taken. I wonder how it feels to be “Dillon’s Ruled” by the federal government.

    If this holds I have to give Biden credit. At least in Virginia, bypassing the state government is a very, very good idea.

  2. LarrytheG Avatar

    Given the past history of how such funds (like tobacco settlement) have been spent – often on local boondoogles…. I fear a repeat performance especially if it ends up going to the localities again.

    Too many ways for local politicos often in cahoots with developers to squander the money.

    I’d rather see a revolving loan fund for transportation and other projects that are scored like SmartScale is used – real criteria – no local political gaming.

    DJ say Clown Show in Richmond – yes – that’s the GA but it’s NOT Aubrey Lane… or Mr. Moret… I’d rather see this in their hands that locals unless there are tight standards for projects.

    1. DJRippert Avatar

      My understanding is that the tobacco settlement did not go directly to the localities but, rather, to the state. It was the state that squandered the money through undersized and ineffective “investments” in rural Virginia. Or, as I should say, it squandered whatever was not stolen.

      Also, Larry – fascinating that you would like to see the money in Aubrey Lane’s hands. It was his predecessor who stole from the tobacco fund and was sentenced to 10 years in prison. While John W Forbes is not Aubrey Lane and there is no reason to suspect Mr. Lane of any dishonesty, the fact that you think putting the money in the hands of Virginia’s Secretary of Finance is a good idea is questionable. At best.

      As for Mr. Moret, he seems to be on the ball. However, I suspect that a review of all the economic development projects awarded over the past 10 years (including time that preceded Mr Moret) would evince a very checkered record. No dishonesty but I suspect that many (most) of the heralded economic development projects fail to provide the advertised benefits. Last August, for example, Rolls Royce closed its plant in Prince George County.

      Even usually skeptical Steve Haner was taken in a bit by the Rolls Royce mirage …


      Give the money directly to the localities. Do not pass Richmond, Do not pay the skim.

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