The General Assembly will probably have another special session in 2021, which is necessary to allow the legislature to allocate federal funds granted to the Commonwealth in the $1.9 trillion American Rescue Plan (ARP) passed by Congress and signed by President Biden Thursday.
Virginia Secretary of Finance Aubrey Layne (pictured above) said, “It will require another session, but it probably will be sometime in the future weeks or possibly months because the Governor has made no decision. But part of that is because we have not received a specific certification on the actual monies yet from the Feds.”
Layne said, “If it goes along the way the others did, it could be 30 to 45 days before we have that information. And on top of that, then obviously we have to do some legwork making sure we meet all the criteria working with the agencies to make recommendations to the General Assembly.”
A new special session would be the third session of the year, since the General Assembly called a special session in February to finish its work.
According to preliminary information, the plan has $3.8 billion for the Commonwealth and an additional $3 billion for localities across Virginia, more than twice as much as the $3.1 billion total sent to Virginia and its localities by the 2020 CARES Act, Layne said.
CARES Act funds were required to be allocated quickly, and Virginia has allocated or spent all of its funds from that package. Layne said about 90 percent of localities have already met the deadline, and he expects the other 10 percent to allocate their funds in time.
Unlike the CARES Act, Virginia and localities have four years instead of one to allocate the American Rescue Plan resources. Layne said legislators not only need to consider who gets the money, but also whether to spend it immediately or hold onto it.
“Our revenues are about $25 billion a year in the general fund,” Layne said. “This is a fairly substantial amount, 12, 13 percent coming in. And it has to be used for specific purposes.”
Layne said that since Virginia’s revenue has increased, restrictions in the ARP mean the new funds can’t be routed straight into the general fund, but will be allocated to help specific industries, like the struggling hospitality sector.
“I would suspect you would see monies to Rebuild Virginia, additional monies going there, and then maybe targeting some particular industries like hospitality and others to help them get back to hiring,” Layne said. “And certainly those individuals who still don’t have a job, I know there’s additional unemployment benefits, but there may be education, other things we can do to help get them back on their feet.”
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