The Pandemic Took $750 Million From VA’s Transportation Budget. Here’s What Happens Now.

Virginia officials shifted money from future projects to make sure everything kept going.

RICHMOND-The Virginia Department of Transportation lost $750 million due to the pandemic. That’s the bad news. The good news, Deputy Secretary of Transportation John Lawson said, is that the state moved $495 million from other sources to fill some of the gaps and keep those planned projects going. The money didn’t just appear, however. The state borrowed it from future budgets. Confused? Let’s explain. 

Lawson spoke Thursday at a meeting of the General Assembly’s Joint Commission on Transportation Accountability. Not surprisingly, state and federal funding sources took a hit from the pandemic, he said. In order to fill the shortfall, Transportation officials asked the General Assembly for help. In this fall’s special session, lawmakers gave department officials some leeway on how to use funds. That means money earmarked for projects that aren’t ready to move forward could be pulled back, temporarily. 

“Given the time it takes for a project to advance, funding may not be needed in the year it’s provided,” Lawson said. 

Lawson said his department took $50 million in uncommitted transportation dollars to fill in the gap. They also used $445 million from projects that aren’t ready to begin construction, but still had money earmarked for them in the 2021 and 2022 fiscal years. This is a bit of a loan. The money will be returned to the projects over the next few years. A total of $99.6 million will be returned next year, with $110.1 million paid back in 2022. After that, $127.3 will be given back in 2023, with the remainder paid in fiscal year 2024. 

“No project will be delayed as a result of these actions,” Lawson told the board. 

Which Areas Lost Funds?

The money came from projects that had been promised a state match. Often in road projects, the state will give a “matching grant”. If a city or county sets aside money for the operation, then the state matches it. All total, the department pulled money from nine transportation regions to cover the shortfall. They included Bristol, Culpepper, Fredericksburg, Hampton Roads, Lynchburg, Northern Virginia, Richmond, Salem and Staunton. Those changes guaranteed that all current projects could continue as planned, Lawson said. 

“[With the changes], we are able to fund transportation projects at the levels pre-pandemic,” he added. 

Lawson also pointed out that revenues grew beyond original projections in November and seem to be following that trend in December. If that continues, he said, then the department could speed up the repayment schedule. 

Local Transportation Takes a Hit

Beyond the shifting money, commission members also heard about how the pandemic affected local transportation. One of the biggest impacts has been on public transportation, as ridership and in turn revenues, have dropped significantly. 

“There’s been a lot of funding from the federal CARES funds, which has really been critical for transit agencies,” said Mitchell Smiley, a policy manager at the Virginia Municipal League. 

He pointed out cities and counties also have to deal with increased costs right now, at a time of declining revenues. The transit agencies had to buy personal protective equipment for drivers and staff, as well as develop plans that meet state COVID-19 restrictions. Even with those challenges, Smiley said the agencies were managing. But there is a problem.

Local governments appreciated that the state kept funding stable for current projects, Smiley said. However, many cities and counties are still in limbo waiting for stalled federal aid – something that may be much harder to deliver. The U,S. House and Senate can’t agree on what form the next stimulus will take or when it will come. A solution on that front may not come until the end of 2020.

Jakob Cordes is a freelance reporter for Dogwood. You can reach him at [email protected].