Governor Ralph Northam issued his first proposal for spending American Recovery Plan Act (ARPA) funds Monday. Northam’s $353 million proposal includes $250 million for the Rebuild VA small business fund. It also includes $50 million for state agency the Virginia Tourism Corporation (VTC), and $53 million for the Industrial Revitalization Fund and the 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 Monday announcement.
Northam and leading Democrats have already released broad priorities but not specific details for spending the money.
Northam doesn’t have the authority to spend the funds himself; the Virginia General Assembly will hold a special session beginning August 2 to consider how to spend the $4.3 billion in ARPA funds.
The Rebuild VA fund, launched in August 2020, awarded $120 million in CARES Act funds to over 3,000 small businesses and non-profits. The General Assembly and Northam added another $25 million to the fund in March.
In June, VTC President Rita McClenny told the Senate Finance and Appropriations Committee that Virginia’s stalled tourism economy risked creating a downward spiral where less local tourism meant local governments and businesses couldn’t afford to invest in tourism, leading to even lower tourism revenue. In 2020, Virginia’s GDP dropped by 2.5 percent. McClenny said over half of that decline — 1.3 percent — was caused by the harm to the tourism industry and the decrease in tax revenue for local government.
“Virginia’s travel economy is digging out of a $10 billion decline, or said another way, a loss of 30 percent of visitor expenditures,” she said. “Virginia is trending slightly behind the U.S.”
To solve that problem, McClenny asked the legislators for $50 million in ARPA funds — $20 million for the VTC and $30 million for localities — enabling more spending on tourism marketing.
Northam’s press release explains that the Industrial Revitalization Fund collaborates with localities to assist with identifying and preparing sites and derelict structures to “jump-start industrial projects.”
“The funding will also support Virginia Main Street’s Technical Assistance Grant program, which has proven to be a successful tool for revitalizing small towns,” the press release states.
“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. That’s why I am proposing $353 million to bolster the Commonwealth’s successful recovery initiatives that target our hard-hit tourism and hospitality sectors, main streets, small businesses, and nonprofits,” Northam said in his press release.
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