With the news reports of the cash coming to state and local governments from the federal government to provide relief from the effects of the COVID pandemic and the announcement that Virginia will have a sizable cash balance at the end of this fiscal year, one could conclude that government is awash in cash! The General Assembly will meet in a Special Session called by Governor Ralph Northam to decide how some of the new monies coming to the Commonwealth will be spent. The Governor will propose a spending plan for those funds that are allocated directly to state government within the “strings attached” from the federal government as to how the money can be spent. The total American Rescue Plan approved by the Congress so far amounts to $1.9 trillion, and that is above the Cares Act monies approved earlier. As you know from daily press reports, the President and members of Congress are working on a compromise for additional funding to ensure the economy recovers and that many infrastructure and program needs that have not been met in the past can be addressed.
Spending the amount of cash that is coming available will not be difficult. In fact, for every dollar coming available there are about five dollars in legitimate spending needs that could be addressed. Be sure that the House of Delegates is not going to spend dollars just because they come available. Strict justification will be required before an expenditure is made. The experiences of the pandemic made many needs obvious. While technology offered many solutions to schools and businesses through digital means, the need made clear the disparities in many places throughout the state in internet access. Certainly teaching by online instruction is a viable alternative to teach and to enforce learning, but it is of little value to children who live in communities without broadband access. Governor Northam has already signaled that he will propose a significant amount of money to expand broadband in the state. It will serve an educational purpose and an economic development purpose as well.
The demands on first responders, medical personnel, and teachers made clear that they are not adequately compensated for what they do. The demand to fill vacancies in these areas has become critical in many communities because of the demand in the jobs and the lack of adequate pay. The use of monies to make critical adjustments in pay for these workers will be top priority, but the response to the need must be more than a one-time bonus and must be an increase in the pay scale.
Monies from the American Rescue Plan can go to private businesses that have been particularly hard hit by the pandemic. Hotels and restaurants and small businesses may receive assistance even if they received loans under the earlier Cares Act funding.
Following its historic pattern as a triple-A rated state for the management of its financial affairs and its recent recognition for the second time as the best state in which to do business, the Commonwealth will retain its rainy day fund and reserves to rescue itself when the next economic downturn comes our way. It is wonderful that funding is coming available to meet critical needs; we must be responsible in the way we spend our cash!