2020 has been a historic year for progressive leadership in times of crisis. There is little more that I can add to the around the clock coverage of the pandemic that continues to affect the Commonwealth and nation. Governor Northam has laid out the plan for a three phase re-opening of Virginia businesses. For current information and resources, I encourage you to visit my website at www.dicksaslaw.com.
Northern Virginia is feeling the impact of coronavirus both in the physical cost of those sickened and lives lost, as well as economic costs. The full financial impacts of Covid-19 are not known at this time. We do know that in the past month, nearly a half million individual unemployment claims were filed in the Commonwealth. Virginia’s unemployment insurance system is funded entirely by federal dollars. The Commonwealth usually does not fare well under the U.S. Dept. of Labor’s funding formula, particularly in a period of sustained economic growth similar to the one we’ve seen over the past decade-plus. However, Virginia is still processing eligible claims incorporating all the resources at our disposal.
When we adjourned the Regular Session and left Richmond in early March, annual revenue collections were up 6.6% — well ahead of the forecast. In direct contrast, April revenues are beginning to reveal the effects of Covid-19 on payroll withholding and retail sales tax collections (Virginia’s two largest sources of income). The Governor anticipates a revenue decline of approximately $1 billion in just the final quarter of Virginia’s current fiscal year. The loss revenue also impact the new fiscal year starting July 1st.
On April 22, we returned to Richmond for the annual Reconvene Session to address the Governor’s amendments to legislation adopted during the Regular Session. Our final order of business was acting to authorize the Governor to suspend more than $2.9 billion in spending that was approved by the legislature — a prudent fiscal move in times of great uncertainty.
The April revenue report along the next several months’ will be critical information when the General Assembly goes into a special session to amend its original proposed biennial spending plan. As of this writing, it is impossible to know the magnitude of the spending reductions that will eventually be required in order to achieve the mandated balanced budget.
While making the most of historically low ridership and traffic-free highways, Metro plans to combine the schedules of its two biggest capital projects in Virginia: rebuilding platforms and connecting new “Phase II” Silver Line stations to Metro’s existing network. Under the expanded plan, all stations west of Ballston will close from Memorial Day weekend through the fall. Several new shuttle bus lines will replace the rail service.
In other areas of the budget, you may recall that earlier this year we proposed significant compensation investments for our teachers, state troopers, state employees, state-supported local employees, adjunct faculty. Now, this intended plan is in limbo as we determine how much revenue can be appropriated during the biennium. These amendments equal nearly $450 million.
Virginia has lagged behind in meeting the growing needs for the most vulnerable, including the elderly and disabled. Our waiver lists are long and often are trimmed to their core in tough times. With that in mind, the hard stop on major “catch up appropriations” is real. On a positive note, all cost-sharing and pre-approvals for Medicaid recipients are temporarily suspended. Prescriptions are allowed for 90-day supplies and technical reasons will not be allowed as a disenrollment tool. Additionally, telemedicine has been expanded. To address the crisis in nursing facilities, an additional $20/day is being provided for Medicaid residents.
Investments the General Assembly approved in Commerce and Trade are also on hold until we get to the bottom line when the fiscal year ends on June 30. In my opinion, Governor Northam has identified sensible criteria to re-open Virginia in three phases starting May 15. Several task forces are in place to help address the issues and recommend what it will take to get us back to the prosperity of the past. I don’t think there is a magic bullet nor will it be easy. Together we are in the crisis and together we will come out of it.
Stay healthy. Stay safe. Stay strong.
Senator Saslaw represents the 35th District in the Virginia State Senate. He may be emailed at email@example.com.