Northam Orders Hiring Freeze as Coronavirus Slashes State Revenues

By Meghan McCarthy

April 3, 2020

Virginia Gov. Ralph Northam is instituting a hiring freeze of state employees and is telling agency heads to look for ways to cut budgets in response to the coronavirus.

Northam chief of staff Clark Mercer told agency heads in a Thursday memo obtained by The Associated Press that a recession is coming and the state revenues will be far below “even our most pessimistic forecast” from last year.

On top of that, Mercer said, the state is having to spend heavily on fighting the virus, including buying medical supplies and on efforts to help vulnerable populations.

“All of this will cost the commonwealth extraordinary sums,” Mercer wrote.

Northam’s actions are not surprising.

The coronavirus is pounding state governments around the country with a financial one-two punch, costing them millions to try to contain the disease just as businesses are shutting down and tax revenue is collapsing.

Northam’s administration has not directed agency heads to come up with a specific figure, saying the total financial impact of the virus is not clear. Mercer also warned that the recently passed federal stimulus, which directs billions to state governments, will not be a cure-all.

“We cannot rely upon temporary federal funding to address our ongoing budget concerns,” Mercer wrote.

Lawmakers passed a two-year, $135 billion state budget early last month, just as the impact of the coronavirus was beginning to be felt. Northam will now offer suggested changes to the budget, which lawmakers are set to take up during a one-day legislative session later this month.

House Speaker Eileen Filler-Corn said Friday that she is working on plans for holding the April 22 legislative session somewhere outside instead of in the House chamber to avoid endangering lawmakers and staff.

A booming stock market had boosted state tax revenues and helped give lawmakers plenty of new money to spend during the most recent budget writing process. New spending that Northam and lawmakers will now have to reconsider includes raises for teachers and state employees, in-state tuition freezes at public universities, and expanded social services benefits.

“I have confidence that we will manage our budget responsibly through this situation and when this pandemic is finished, we will again be strong,” Northam said at a press conference Friday.

The governor also announced he had given final approval to using three convention centers across the state as alternative care sites to free up capacity in the existing health care system.

The sites chosen were: the Dulles Expo Center in northern Virginia, the Greater Richmond Convention Center and the Hampton Roads Convention Center. Those facilities are located in the parts of the state seeing the widest spread of COVID-19.

The next steps are to complete contracts and then move into design and construction, Northam aid. The facilities are expected to be ready in about six weeks.

Virginia’s number of confirmed cases surpassed 2,000 on Friday, with 46 confirmed deaths, according to the latest information from the Department of Health. Northam said Friday he expects Virginia’s cases to peak in May.

The governor also said he had received reports of people at state parks and public beaches violating social distancing guidelines intended to help slow the spread of the virus

“We will be watching this weekend. I do not want to have to close these lands to public visitation because of a few irresponsible people,” he said.

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