Ahead of the General Assembly’s August special session, Gov. Ralph Northam said Monday he wants to spend $353 million of Virginia’s federal relief funding on small business recovery and assisting the tourism industry. Virginia received $4.3 billion in federal funds through the $1.9 trillion American Rescue Plan passed in March.
The Democratic-controlled General Assembly will reconvene on Aug. 2 for a special session focused on spending the federal windfall, including fully funding the Northam administration’s Rebuild VA small business recovery program and allocating money for the state’s unemployment trust fund, which ran out of money last October due to record-breaking unemployment claims and was reliant on federal funding.
On Monday, joined by Democratic state lawmakers in Virginia Beach, Northam proposed allocating $250 million for the Rebuild VA economic recovery fund, $50 million for the Virginia Tourism Corp. and $53 million for other small businesses through programs like the Industrial Revitalization Fund and Virginia Main Street program.
“Virginia is roaring back stronger than we could have imagined one year ago, but small businesses are the backbone of our economy, and they need additional support to get back on their feet,” Northam said in a statement. “With the American Rescue Plan, we have a once-in-a-generation opportunity to rebuild from the impacts of the pandemic, revitalize our communities and invest in our shared prosperity.”
Since launching in July 2020, the Rebuild VA economic recovery fund has awarded $120 million in federal CARES Act funding to more than 3,000 small businesses and nonprofits, according to the governor’s office. Northam and the General Assembly agreed to fund Rebuild VA with an additional $25 million in March to fulfill many of the pending applications.
“Rebuild VA has been a lifeline of support for countless Virginia businesses,” said state Sen. Janet Howell, chair of the Senate Finance and Appropriations Committee. “With so many businesses still in the queue for funding, there is no question that the General Assembly needs to approve the full amount to provide support to these businesses, and to allow new applications to be filed.”
From March 2020 to April 2021, Virginia lost an estimated $14.5 billion in total tourism spending, according to the governor. With the proposed $50 million, the Virginia Tourism Corp. would create the Virginia Tourism Recovery Program to deliver funding to 114 destination marketing organizations statewide. VTC would also boost its sports and meeting marketing programs and extend its broadcast and digital marketing into media markets in Charlotte, North Carolina, Pittsburgh, Boston and Chicago. It would also expand digital advertising to an additional 29 markets east of the Mississippi River.
Eric Terry, president of the Virginia Restaurant Lodging and Travel Association, praised Northam’s move in a statement Monday. “We are pleased that Gov. Northam has recognized the continuing crisis for Virginia’s tourism and hospitality industry and has answered our calls to assist the industry’s pandemic recovery. Given the struggles many of these businesses still face, we hope that the program will distribute funds quickly and offer flexibility to help get them back on their feet.
“Tourism and hospitality losses in Virginia have totaled $14 billion, and nearly half of the job losses caused by the pandemic statewide were in our industry. A stronger tourism and hospitality industry means a stronger Virginia, and VRLTA applauds Gov. Northam’s announcement today, which would put us on the right path to recovery.”
Del. Luke Torian, chair of the House Appropriations Committee, added in a statement that “the tourism economy has always been, and will always be, a shining light here in the commonwealth. From the Blue Ridge Mountains to the Chesapeake Bay, Virginia is the destination that countless people dream to visit. Now that our doors are open and our lights are on, I am confident that Virginia Tourism will use this funding to reboot our tourism economy and bring people in from across the nation and beyond.”
The $53 million proposed for small businesses would also support two Virginia Department of Housing and Community Development programs. The Industrial Revitalization Fund seeks to help redevelop vacant nonresidential structures, according to its webpage. The proposed funding would also support Virginia Main Street’s Technical Assistance Grant program, which would focus on providing support for minority and immigrant communities, as well as woman- and minority-owned businesses.
House Speaker Eileen Filler-Corn, Senate Majority Leader Dick Saslaw and Delegates Kelly Convirs-Fowler, Nancy Guy and Alex Askew — all Democrats — joined the event held in Virginia Beach.
“This is another example of our work to ensure Virginia’s small businesses have the support they need,” Filler-Corn said in a statement. “As we emerge from COVID-19, these continued investments will help working families and put millions back into our quickly-recovering economy.”
“I am grateful to Democrats in Congress for providing this critical funding,” Saslaw said in a statement. “Together, we will get this relief directly into the hands of small businesses, families, and communities across the commonwealth.”
The General Assembly will convene for a special session on Aug. 2, which would be a return to the Virginia State Capitol chambers for the first time since March 2020. Under COVID-19 mitigation measures, delegates and state senators met virtually, under tents and in larger buildings that allowed physical distancing.