(TNS) — State revenues didn’t take as big of a hit as finance experts predicted as a result of the coronavirus pandemic, with government officials reporting the total tax collections grew by 2 percent in the fiscal year that ended in June.
But that’s below the 3.1 percent revenue growth finance officials predicted at the beginning of the year, before the pandemic forced hundreds of thousands of Virginians to file for unemployment and stay home, thus slowing spending. The state was $234 million below what it anticipated collecting in taxes for the year.
“That was about three quarters of a billion dollars better than we expected,” Finance Secretary Aubrey Layne said Tuesday.
Lawmakers are preparing to meet in Richmond Tuesday afternoon to — in part — amend the $135 billion state budget that they approved back in April. In anticipation of the financial damage the COVID-19 pandemic would bring, they froze about $2 billion allocated for early childhood education and community college students, raises for teachers and government employees, and investments in affordable housing and the environment.
Around the same time, a hiring freeze was ordered for state employees, and discretionary spending for state agencies was halted.
On Tuesday morning, Gov. Ralph Northam told legislative members of the finance and appropriations committees during a virtual meeting that Virginia was projected to get $2.7 billion less than expected over the next two years.
“We feared worse,” he said in prepared remarks. “But this still requires serious and thoughtful budgeting and planning.”
Northam said while education was his top priority, he’s still not advocating for more spending in that area. He’s also not recommending lawmakers spend any new money on his other priorities that were highlighted in the original two-year budget: behavioral health, lowering college tuition, making it easier to access affordable health care and investing in transportation.
“We all share these priorities, and we will return to them in January, when the time is right,” Northam said. Another budget reforecast is expected in December.
Instead, the governor is proposing an amended budget that allocates $88 million to combat evictions and expand affordable housing and $85 million for broadband access as many school districts move to virtual learning.
He also wants to spend $2 million to pre-stamp mail-in ballots and supports legislation allowing localities to install secure ballot drop-off boxes ahead of the Nov. 3 election.
“To be clear, voting will be safe and secure in Virginia. Your mailed-in ballots will be counted. Virginia will take every action necessary to protect the vote,” he said.
And he’s proposing a package of $14 million that he says “lifts up” Virginia’s historically Black colleges and universities — with $7.5 million going to Norfolk State University — and funds important cultural sites with $9.6 million.
And he wants to allocate $15 million for dam rehabilitation projects “that can’t wait”, along with a few other smaller environmental projects.
Northam, a doctor, has maintained — like many other Democratic governors in the U.S. — that the only way to solve the economic crisis is to first solve the health crisis. About 107,000 Virginians have tested positive for the coronavirus since March, with deaths rising to 2,385 as of Monday, according to the Virginia Department of Health.
“As we make budget decisions, this week and into the next session, we must keep in mind that we can’t know what is going to happen with the pandemic, when a vaccine will be available, or how much longer this will go on,” Northam said.
The government has been paying for expenses related to COVID-19 — such as testing and personal protective equipment — by using federal CARES Act funding. Virginia received $3.1 billion, and allocated about 45 percent of that to localities.
Along with making changes to the budget, state lawmakers are expected to consider legislation related to criminal justice reform during the special session. They’ll meet at 1 p.m. Tuesday in Richmond in person, and are expected to take up bills in committee meetings virtually for the duration of the session.
©2020 The Virginian-Pilot (Norfolk, Va.) Distributed by Tribune Content Agency, LLC.