Gov. Northam rolls out proposed amendments to Virginia’s budget.
RICHMOND-Economists are predicting a resurgence in Virginia’s economy next year. As a result, Governor Northam says the Commonwealth has an extra $1.2 billion to spend in its biennial budget.
“Based on the expert advice of economists and business leaders, our team now estimates $1.2 billion in additional revenue in this biennium. We all need to understand how important this is. Revenues are exceeding official forecasts, even during a pandemic,” Northam said.
Speaking to a joint session of the General Assembly’s finance committees on Wednesday, Northam laid out a plan for spending the expected revenue.
This upswing in the economy was forecast as a result of the expected economic impact of the COVID-19 vaccines. When these become available to the public next year, experts say consumer confidence will slowly return to normal levels. But to be clear, this isn’t guaranteed. These are still projections.
“A lot of this has to do with better than expected news on the vaccine. The vaccine has come online a little sooner than most economists thought just a few months ago,” said Virginia Secretary of Finance Aubrey Layne.
Budgeting for Disaster
However, Northam wants to invest the majority of this new revenue into the Commonwealth’s reserve fund. A total of $650 million would go directly into that fund. According to the governor, this money could be a safety net in case the pandemic worsens instead of getting better.
“While we expect to turn a corner on this pandemic in the coming months, if there is anything we have learned this year, it is to prepare for the unexpected. Putting these revenues in reserves gives us flexibility,” Northam said.
Under the biennial budget passed during the August special session of the General Assembly, the reserve fund totaled $300 million.
Early Education in the Budget
The second highest investment Northam proposed using this projected revenue on was education.
The proposed budget allocates $299,373,461 in 2021 and $214,167,967 in 2022 to ensure school divisions don’t lose state funding during that time. These payments will make up for expected declines in fall enrollment as a result of the pandemic. School districts in Virginia receive yearly funding from the Commonwealth based on their student body’s average daily membership (ADM).
According to a report by the Senate Finance & Appropriations Committee, compared to 2019, K-12 enrollment decreased by 3% this fall. That included a 13% decrease in kindergarten enrollment across Virginia.
The governor also proposed adding an additional $26.6 million to the Commonwealth’s education budget to hire school counselors. Using this money, the amended budget proposes that by the 2021-2022 school year, all local school boards should employ one full-time counselor per 325 students in K-12.
The Commonwealth currently funds one full-time counselor per 500 elementary students. It also finances one full-time counselor per 400 middle school students. Virginia’s Department of Education also funds one school counselor per 350 high school students.
“I also know that the challenging nature of this school year is hitting students especially hard. It is not easy for children to be separated from their friends, or to miss the school activities they enjoy. I believe our students need help now, more than ever,” said Northam. “The mental health of our students is too important to wait for another budget year.”
Raises for Teachers
Northam also proposed allocating $80,068,012 of the amended budget to finance a 2% bonus for teachers and school support staff. This would be a one-time only bonus. However, Northam said if funds allow he will push for an increase of 2% in overall teacher salaries next year.
“Last year, I proposed adding a 3% pay raise on top of that. While we had to unallot the money for that raise, teachers deserve it. So if we see our revenues improve as we expect next month, I’ll push to change this one-time bonus into a permanent pay raise of at least 2%. It is a small way to say thank you for your devotion to educating our children,” Northam said.
Northam’s amendments to the budget also allocated $16,600,000 in 2021 to support preschool programs for at-risk four to five year olds.
“Early childhood education has been a priority for me since I was in medical school. The majority of brain development occurs in these early years. We want every child to enter kindergarten ready to learn,” said Northam.
Budgeting for Vaccine Distribution
The budget also includes funds to support the Commonwealth’s response to the COVID-19 virus pandemic. A total of about $240 million in the amended budget is for Virginia’s public health needs related to the pandemic.
Of this money, $30,184,899 in 2021 and $59,123,029 in 2022 will go towards implementing a mass vaccination campaign. This campaign will provide equipment, supplies, staff, public messaging, and support for local health districts.
“Vaccines are the only way we can end this pandemic and get back to a more normal life. But to do that, we must vaccinate millions of Virginians. That’s a lot of shots in a lot of arms. It will take a great deal of time, effort, and money. That money should come from the federal government. But we’ve all learned not to wait. So in this budget, I have provided $90 million to support this vaccination effort and ensure we have the supplies, staffing, and other infrastructure needed to vaccinate eight million Virginians.” said Northam.
What the Feds Won’t Pay For
According to Daniel Timberlake, Director of the Virginia Department of Planning and Budget, the federal government says it will pay for the cost of the vaccine. However, there are many indirect costs associated with getting the vaccine to the public .
“The federal government will pay for the vaccine, that’s what we’ve been told. But there is no additional support for the state after that. So we will have to stand up the software that’s needed to track people getting vaccines, the media campaign that have to go out to make people aware of the vaccines, where to go to get them, try to alleviate some of the fears that are related to the vaccine,” Timberlake said.
Northam also proposed amending the budget to allocate $722,472 in 2021 and $1,444,9444 in 2022 to COVID-19 data modeling and related tracing services. In 2021, $218,472 will go towards research into COVID-19 modeling, literature, and policy reviews. $436,944 is also allocated to this research in 2022 under the governor’s proposed budget.
One of the governor’s priorities for the upcoming General Assembly session is the legalization of marijuana.
To fund the enforcement of laws regulating the legal sale and growing of cannabis, the proposed budget amendment includes an interest-free loan for the Virginia Beverage Control Authority. This money is set aside to create a body to oversee the marijuana industry and to govern adult-use of marijuana products in the Commonwealth.
For those with previous marijuana-related convictions, Northam proposed allocating $5 million in 2021 to cover the costs of expunging these records. In 2022, $20 million will go towards expungements. These costs could include the automatic expungement of misdemeanor marijuana-related arrests.
“As we consider ways to make our criminal justice system more fair and equitable, we must talk about improving our system of expunging past crimes from people’s records,” Northam said. “I have put $20 million into this budget, so it will be ready when we conclude the important discussion of how best to conduct expungements. Like marijuana legalization, this is a priority that needs action in this session.”
Northam’s Budget Priorities
The amended budget proposed by the governor also included increases in funding for Virginia’s Housing Trust Fund and for the Rent and Mortgage Relief Program. An additional $15 million investment in the Virginia Telecommunications Initiative is also part of the governor’s amendment. If approved, the initiative would total $50 million in 2021.
The governor also wants to invest $25 million to redesign Monument Avenue and to create statues commemorating Black liberation. Activists, however, would like him to spend that money to help Black communities.
The amended budget also included a $50 million investment to support creating a passenger rail service. The proposed train would travel from Roanoke to the Blacksburg-Christiansburg area in the Southwest region of Virginia. State employees will also receive a one-time only bonus, which will cost the Commonwealth $98 million.
Meg Schiffres is Dogwood’s associate editor. You can reach her at [email protected].