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Governor's proposed budget restores many earlier COVID cuts

Posted at 10:38 AM, Dec 16, 2020
and last updated 2020-12-16 10:39:01-05

RICHMOND, Va. - Virginia Gov. Ralph Northam outlined his proposed amendments to the two-year state budget Wednesday, presenting a plan that includes hundreds of millions on pandemic response and restores Democratic priorities put on hold in the spring over economic uncertainty.

The governor’s proposals, which typically serve as a starting point for lawmakers who will convene in January, account for the fact that Virginia’s economy has held up better than expected this year, administration officials said. The proposal is based on a based on a revenue forecast that anticipates $1.2 billion more than a forecast released in August.

“The plan I will present to you today is intended to help Virginians navigate the next phase of the crisis, and perhaps, its final months," the governor said in a virtual address Wednesday morning. "It will position us to recover as quickly as possible as we rebuild our economy in a post-pandemic world. And it’s about advancing the progressive agenda that we all embarked upon together just a year ago.”

Secretary of Finance Aubrey Layne said Virginia had fared well for a number of reasons, including an increase in sales at the state liquor monopoly and the fact that the Commonwealth’s largest employers - the federal government, defense contractors and the tech sector - have weathered the pandemic well, which is being reflected in payroll tax withholdings.

“We are an anomaly,” he said during a press briefing on Tuesday ahead of the governor’s formal address to lawmakers. “Virginia is one of a few states that is showing increased revenue growth.”

Northam's version of the spending plan restores money previously allocated for expanding access to early childhood education, for higher education tuition assistance and for the governor's G3 Program to provide free or low-cost job skills training at community colleges.

To fund the continuing response to the pandemic, Northam's proposal includes nearly $90 million to support the massive effort to deploy COVID-19 vaccines. It would allocate over $500 million to prevent funding cuts to local school divisions that have lost enrollment amid the pandemic, spend $15.7 million on a rent and mortgage relief program and boost spending on an internet accessibility initiative.

The budget includes $80 million for a 2% bonus for teachers and school support positions. Northam's chief of staff, Clark Mercer, said the governor would push lawmakers to consider turning that bonus into a permanent raise of at least 2% if the revenue numbers in January are healthy.

The proposal does not include any tax policy adjustments, apart from the benefits the federal coronavirus relief bill had for some individuals, Layne said.

Northam’s plan also invests $650 million into the state’s revenue reserves, or rainy day fund.

Virginia operates on two-year budgets. The one currently in place covers mid-2020 through mid-2022. Lawmakers who convene for the annual session Jan. 13 will pass budget legislation, sending it to the governor for his signature or further amendments. Democrats control both chambers of the General Assembly.

Northam's proposal would also:

- spend $50 million to purchase right-of-way easements from Norfolk Southern, which administration officials said would support extending passenger rail service from Roanoke to the Blacksburg-Christiansburg area and increase intercity passenger rail service on the I-81/Route 29 Corridor from Washington, D.C.

- allocate a previously announced $25 million for what Northam calls “historic justice initiatives” that would transform historical sites in Virginia, including the Richmond spot where a soaring statue of Confederate Gen. Robert E. Lee has become a focal point of protests against racism. Northam has sought to remove the statue, a move that’s been tied up in court.

- invest $5.1 million to expand the Virginia Court of Appeals from 11 judges to 15 judges.

- direct more than $700,000 to the Virginia Parole Board, which has come under criticism this year from victims' families, prosecutors and Republican lawmakers, to hire more employees and improve victim services assistance.