Fall Appropriations Report

— On Monday, as I made my way down to Richmond for the September Appropriations Committee meeting to hear updates on Virginia’s economic recovery from COVID-19, I thought about how far we have come since this pandemic started. A year and a half ago we were shedding jobs at a very concerning clip. We lost about 480,000 jobs in that first quarter. By December of 2020, about 200,000 of these jobs had been recovered. To date, Virginia’s unemployment rate has declined for the past 15 months straight. And, as of this week, about 60% of the Virginia population is now fully vaccinated. Here in Fairfax County, 73% of adults are fully vaccinated, and 61% of the total population. Our economic recovery continues to outpace the nation, and a majority of our population have taken steps to protect themselves from COVID-19 infection.

In fact, throughout this pandemic, the General Assembly, in concert with our Governor, have acted in a fiscally prudent manner while supporting our small businesses and workers struggling to get by. We made record investments in our infrastructure, education, and public safety (all of which I have written about previously). We continue to prioritize the health and safety of all Virginians. These past two years of Democratic rule have laid the foundation for an economic recovery that is building back an even better Virginia—from providing for universal broadband, strengthening the behavioral health system, record investing in everything from high speed rail to reducing water pollution, improving ventilation and air quality in public schools, and funding for rental and utility assistance, and so much more.

First, at the committee meeting, we received the economic and revenue update from the Secretary of Finance, Joe Flores. Virginia’s real GDP rose at an annualized rate of 6.6 percent in the second quarter of 2021, following 6.3 percent in the first quarter. Following two strong months of growth, the labor market added only 235,000 jobs to payrolls in August, as the leisure and hospitality sector was flat. The national unemployment rate fell to 5.2 percent in August, and Virginia’s unemployment rate is well below that at 4 percent. Initial claims for unemployment fell from 345,000 to 310,000 during the week ending on Sept. 4, which is the lowest level since March 2020 (although the Labor Day weekend holiday could be causing distortions in the data). In a healthy economy, new filings are typically below 250,000. Payroll employment rose 3.8 percent in August from August of last year. Employment here in Northern Virginia rose by 5.1 percent; Hampton Roads rose 3.1 percent; the Richmond-Petersburg area rose 1.9 percent. Our recovery is looking solid.

Then, we were briefed by the Deputy Secretaries of Transportation Nick Donohue and John Lawson who shared transportation updates with us, highlighting the sharp, and unprecedented, decline in transportation use over the last year caused by the stay-at-home orders around the country. Driving was down more than 60% in April of 2020, and mass transit use dropped by 40 to 90% depending on the system. Amtrak ridership went down more than 90%. From the start of the pandemic through FY21, state transportation revenues are down $1.8 billion from earlier March 2020 estimates.

WMATA has received $2.45 billion in COVID relief funds, to support WMATA through FY23/24 without major service cuts or subsidy increases. Both rail and bus services are still below pre-COVID ridership levels, but ridership is beginning to recover on both rail and bus service with significant increases seen since January.

In April 2020 the Commonwealth signed agreements with CSX Transportation and Amtrak to advance a $3.7 billion initiative to purchase 350 miles of right-of-way and 225 miles of new track, the construction of a new Long Bridge over the Potomac River for passenger and commuter trains, and the construction of another 35-37 miles of track along the I-95 corridor. This deal provides many exciting transit opportunities for Virginia, including the ability to separate passenger and freight operations along the corridor, doubling state-supported Amtrak service over the next 10 years, resulting in almost hourly service between Richmond and DC, a 75% increase in VRE service along the Fredericksburg line (including new weekend service), and additional service along the VRE Manassas line.

FY21 Commonwealth Transportation Fund revenue collections were $365.8 million above the estimate. Transportation is supposed to receive two-thirds of undesignated General Fund surplus, which would amount to approximately $115.8 million. FY22 through FY27 state transportation revenue estimates will not be updated until December. The Federal infrastructure bill and ‘reauthorization’ proposal, is pending in Congress.

Joshua Saks, the Deputy Secretary of Natural Resources, and Chris Bast, the Chief Deputy Director of the Department of Environmental Quality gave us an update on Virginia’s participation in the Regional Greenhouse Gas Initiative (RGGI). Virginia joining RGGI was authorized by the 2020 General Assembly with the “Clean Energy and Community Flood Preparedness Act.” Virginia is one of 11 participating states in RGGI, an emissions cap and trade program that reduces power sector greenhouse gas emissions over time, and raises proceeds to invest in climate-related programs. RGGI works by allocating individual state CO2 allowance trading programs aligned through a model. Each allowance is equal to one ton of carbon dioxide. Allocations are based on state budgets that are determined by baseline emissions. State budgets decrease annually at 3% per year for a total of 30% by 2030. State allowances are offered for sale through quarterly auctions conducted by RGGI, Inc. Allowances are fungible, bankable, and tradable—regulated sources and others can bid to purchase allowances for compliance or other reasons.

THE FINAL presentation was from Dr. Laurie Forlano, the Deputy Director for the Virginia Department of Health’s Office of Epidemiology who introduced the Committee to the Virginia School Screening Testing for Assurance (VISSTA) program. In April of 2021, Virginia was awarded a $275 million grant from the CDC to establish comprehensive programs of weekly COVID-19 screening in public and private schools across the state. The goal is to support safe in-person instruction in K-12 schools by providing resources for schools to implement COVID-19 screening testing as a layer of prevention to protect students, staff, and teachers and slow the spread of COVID-19. The grant program acknowledges the importance of keeping schools open for academic, social, and emotional benefits for students, as well as the importance of doing so safely. The ViSSTA program will offer:

Contractors to conduct pooled testing at least weekly and provide end-to-end support (e.g., supplies, staff to conduct testing, PPE, biohazard waste removal, reporting tools). Contractors will also support confirmatory testing.

Self-test kits that can be administered at home for diagnostic, close contact, or special event testing.

Special event support: staff and testing supplies to help schools add testing as a layer of prevention when extracurricular activities (e.g., athletics, performing arts) and events (e.g., school dances, graduation/awards ceremonies) are held.

Containment and mitigation support: VDH will continue to assist schools in responding to school-based cases and make resources available to advise on case-specific questions.

The program is open to public and private schools. In addition to the resources above, public schools will have access to funds to acquire:

School-based and regional staff: funding for additional staff to support the testing program (e.g., school-based nurses to advise on medical matters and mitigation/containment; administrative staff to support coordination)

Technology and supplies: funding for supplies used to implement the program, including technology resources and infrastructure (e.g., outdoor tents)

All COVID-19 testing must be voluntary; only individuals who consent will be tested.

VDH is currently working with a total of 77 school divisions/schools across the Commonwealth, including 38 school divisions/schools who have committed to the program and 39 additional who have expressed interest. Of these, 14 have been matched with a vendor, and 6 are holding school-based testing events. Participating and interested school systems here in Northern Virginia currently include Alexandria City, Falls Church City, Prince William County, and Manassas City.

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