How Should Virginia Allocate Federal Relief Money?

Apr 30, 2020

Local governments across Virginia are eyeing a huge pot of money from the federal government.

But the governor is still trying to decide how to distribute all that cash.

The CARES Act recently passed by Congress and signed by President Trump includes $3.3 billion for local governments across Virginia. Fairfax County is the only jurisdiction in Virginia that will automatically get money from the federal government based on its population.  It will get $200 million because its  population is over 500,000.

Governor Ralph Northam gets to determine how to distribute the rest of it, more than $3 billion. He could distribute it based on population or he could hand it out it based on economic need — in a way similar to how schools are funded.

Chris Duncombe at the Commonwealth Institute says that’s a tricky balancing act.  “In addition to the health consequence, it’s also important to take into consideration the economic consequences that are going to come from the virus, and not all local governments are going to have the same ability to fill in for reductions in state aid”

Frank Shafroth at George Mason University predicts the governor will end up with a funding formula that’s not based solely on population, a way to send more money to places like Lee County or Petersburg and less money to places like Alexandria and Arlington.   “There are some jurisdictions, particularly in Northern Virginia, that are more than able to take care of themselves. It will be difficult. But they can do it," Shafroth predicts. "There are some areas that are far less able and likely to be suffering much greater economic harm.”

Budget officials at local governments across Virginia are now in the process of trying to figure out how they are going to spend this money — after they figure out how much they’re getting.

This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.