Virginia governor’s proposed budget restores many earlier COVID cuts

Northam outlines key principles he'd like to see in a marijuana legalization bill

Virginia Gov. Ralph Northam outlined his proposed amendments to the two-year state budget on Wednesday, including changes that will restore Democratic priorities put on hold in the spring over pandemic-related 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, Secretary of Finance Aubrey Layne told reporters.

“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.”

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.

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.

His proposal also includes hundreds of millions in spending on the COVID-19 response, including 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.

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.