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June 28, 2021

New Federal Funds for Virginia: Who’s Getting What

The American Rescue Plan Act (ARPA) of 2021 that became law on March 11 provides both flexible and targeted funding for the state of Virginia, all Virginia cities and counties, public and private universities, and Virginia tribes, as well as direct relief for families. Because each type of funding has different timing and other restrictions, and Virginia’s state and local policymakers will face important decisions in the coming months about how to use these funds, TCI has prepared a summary of what is being received and by whom. For the flexible funds, we have provided additional detail about how these funds can and cannot be used, based on the Interim Final Rule published by the U.S. Treasury Department on May 17.

Click on the image for a pdf version

This summary focuses on those funds that will flow through the state and local governments and does not include the substantial direct assistance to Virginia families in the form of stimulus checks, improved tax credits, and improved healthcare marketplace subsidies.

Please feel free to contact TCI staff if you have any questions or if we can be of any assistance in understanding the ARPA funding for Virginia.

Money being received by the State of Virginia

State fiscal recovery funds

  • $4,293.7 million
  • Must be obligated by December 31, 2024
  • Can be used for things like:
    • building a robust outreach operation to help people access available federal, state, and local aid, 
    • housing services to increase healthy living environments, 
    • boosting incomes for essential workers and people with limited incomes, and 
    • investing in equity-enhancing broadband, clean water, and health-related infrastructure projects.
  • Except to the extent that revenue is below what would have been expected without a pandemic and recession, these funds cannot be used for: 
    • general infrastructure projects that do not respond to a specific pandemic public health need or a specific negative economic impact
    • debt service or deposits to rainy day funds, revenue reserves, or pension funds or
    • to offset tax cuts. 

State capital funds

  • $221.7 million
  • Based on state population, share of pop. in rural areas, and share of pop. with household income <150% FPL
  • U.S. Dept. of Treasury will begin accept applications for review in summer 2021
  • To be used “to  carry  out  critical  capital  projects  directly  enabling  work,  education,  and  health  monitoring,  including remote options, in response to the public health emergency with respect to the Coronavirus Disease (COVID–19).”

State funding for health and pandemic response

  • At least $483.6m, including:
    • $257.1 million for school COVID-19 testing
    • $79.9 million for community health centers
      • Funds available until expended
    • $77.1 million for vaccinations
    • $35.6 million mental health block grant
      • Funds available until Sept. 30, 2025
    • $33.9 million substance use block grant
      • Funds available until Sept. 30, 2025

State funding to address housing, homelessness, and utility costs

  • $839 million ($451 million for rental assistance; $258 million for homeowner assistance; $90 million for energy assistance through LIHEAP; $40 million for homeless services)
  • Rental assistance funds available through Sept 30, 2027; Homeowner assistance through Sept 30, 2025

Support for child care and Head Start via the state

  • $810.1 million  (includes $489 million for child care stabilization grants; $305 million for child care and development block grant, and $17 million for Head Start)
  • May be administratively appropriated
  • CCDBG funds must be obligated by Sept 30, 2023; Must notify HHS if cannot obligate 50% of child care stabilization funds by Dec 11, 2021; Head Start funds must be spent by Sept 2025
  • Can be used for things like 
    • stabilization grants to child care providers for operating expenses as they face less revenue and higher expenses during the pandemic,
    • child care assistance for low-income families and essential workers and 
    • quality investments needed to address recovery from the pandemic.

Additional state-administered help for families and individuals

  • At least $86.8 million, including 
    • $34 million for meals and services for seniors
    • $19.2 million for SNAP administration
    • $15.7 million for direct assistance to low-income families
    • $8.7 million for child abuse prevention and response.

K-12 funding

  • $1,898.5 million for school divisions and $210.9 million for VDOE. Amounts by school division here.
  • Will flow through the state; we expect it to be administratively appropriated
  • Must be obligated by September 30, 2024
  • Can be used for things like responding to lost learning time, safety improvements to schools to prevent the spread of coronavirus, targeted support for students that face additional barriers to education
  • Cannot be used for general infrastructure support or paying down existing debt. 
  • $46.3 million for non-public (private) schools, to be administered by VDOE

Federal payment for improved UI benefits administered by Virginia

  • Amount that will flow through the state is dependent on how many workers in Virginia receive support
  • We expect these funds to be administratively appropriated
  • Makes first week of benefits fully federally funded and extends interest-free loans
  • Continues improvements to benefits for unemployed workers through Sept 6, 2021, including 
    • $300/week boost in benefits
    • Providing access to unemployment for gig workers and independent contractors
    • Extended benefits for those who remain unemployed for a long time.

Local fiscal relief for small independent cities and small towns with populations < 50,000 (except those designated as principal cities of MSAs)

  • $633.8 million for these “non entitlement units” (full listing by locality available here)
  • State must distribute funds to localities within 30 days after receipt, unless they request and receive an extension
  • Must be obligated by December 31, 2024
  • Can be used for things like:
    • Restoring public sector employment to pre-pandemic levels
    • building a robust outreach operation to help people access available federal, state, and local aid, 
    • housing services to increase healthy living environments, 
    • boosting incomes for essential workers and people with limited incomes, and 
    • investing in equity-enhancing broadband, clean water, and health-related infrastructure projects.
  • Except to the extent that revenue is below what would have been expected without a pandemic and recession, these funds cannot be used for: 
    • general infrastructure projects that do not respond to a specific pandemic public health need or a specific negative economic impact
    • debt service or deposits to rainy day funds, revenue reserves, or pension funds or
    • to offset tax cuts.
Money being directly received by local governments

Local fiscal relief for counties, independent cities, and larger towns

  • $618.3 million for metropolitan cities and $1.7 billion for counties and independent cities (full listing by locality available here: here and here)
  • Must be obligated by December 31, 2024
  • Can be used for things like:
    • Restoring public sector employment to pre-pandemic levels
    • building a robust outreach operation to help people access available federal, state, and local aid, 
    • housing services to increase healthy living environments, 
    • boosting incomes for essential workers and people with limited incomes, and 
    • investing in equity-enhancing broadband, clean water, and health-related infrastructure projects.
  • Except to the extent that revenue is below what would have been expected without a pandemic and recession, these funds cannot be used for: 
    • general infrastructure projects that do not respond to a specific pandemic public health need or a specific negative economic impact
    • debt service or deposits to rainy day funds, revenue reserves, or pension funds or
    • to offset tax cuts.
Money being directly received by tribal governments

Six federally-recognized tribal governments will receive both flexible fiscal relief funds and dedicated funds for pandemic response and recovery.  Final funding numbers by tribe do not yet appear to be available, but the Washington Post estimates that Virginia tribes will receive as much as $57 million.

Money being directly received by public and private colleges and universities
  • $668.8 million for public colleges and universities, $164.6 million for private non-profit, $10.5 million for for-profit
  • Colleges & universities will directly receive funds from U.S. Dept of Education
  • Available through September 2023
  • At least half has to be used for direct emergency grants to students (or all in the case of for-profit institutions). Of any institutional share, institutions must use funds to “implement evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines” and “conduct direct outreach to financial aid applicants about the opportunity to receive a financial aid adjustment due to the recent unemployment of a family member or independent student, or other circumstances”

Categories:
Budget & Revenue, Economic Opportunity, Education, Health Care

Chris Wodicka

wodicka@thecommonwealthinstitute.org

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