Virginia will get at least $1.5 billion in federal aid under the $2 trillion stimulus package that the U.S. Senate is poised to approve to help individual Americans, small and large businesses, and health care systems recover from the devastating economic effects of the coronavirus pandemic.
The aid is coming primarily as block grants that the state and large local governments will be able to allocate to their highest needs, which is the approach favored by Gov. Ralph Northam and state finance officials who expect about $1 billion less in revenues in each of the next two years as part of a pending budget that is likely to change dramatically before the governor signs it.
"It will help us know how much we've got to rebuild our budget," Secretary of Finance Aubrey Layne said in an interview on Wednesday, prior to a press briefing in which he and Northam addressed the financial relief expected from the federal bill.
U.S. Sen. Tim Kaine, D-Va., a former Virginia governor and Richmond mayor, said the stimulus package will include direct payments to individuals and families and a massive boost in benefits to laid-off workers, part-time employees, contractors and self-employed business owners.
"It's unemployment insurance on steroids," Kaine said in a press briefing on Wednesday before the scheduled vote.
The package also includes forgivable loans and grants to small businesses that retain their workers, and some $500 billion to large, hard-hit industries with the requirement that the money be used wisely to help employees who need it most, he said.
"It will be much more likely that the dollars we give these companies will be used to support their workers," Kaine said, specifying that the money can't be used to boost executive compensation and buy back stock to boost its value.
The package also will include about $130 billion to help hospitals, free clinics and other health systems that have been overwhelmed by response to the coronavirus pandemic, and help them obtain critical supplies such as ventilators for seriously ill patients and protective medical gear.
Congress already had approved $8.3 billion in spending for health care. That bill, as well as the pending aid package, will boost the federal share of Virginia's Medicaid costs and allow the state to spend its funds on other critical needs.
Grants to states will depend on their population, but he said no state would receive less than $1 billion. Large local jurisdictions also will receive direct federal aid. The package also includes aid for public transit systems that have been crippled by the virus and its effects on ridership.
The block grant approach will allow governors to decide how much money to give to K-12 public school systems and how much to higher education systems to deal with significant financial effects of shutting operations down to stop the spread of the virus.
"The answer is going to be different in every state," Kaine said.
Layne welcomed both the block grants and the federal focus on direct aid to individuals, which he predicted would help reinforce the state's public health message to Virginians to change their behavior to stop the spread of the virus.
"If you don't have money and someone tells you to stay at home, it's hard to do it," he said.
The aid package, subject to final approval by the Senate and the U.S. House of Representatives, would be the largest in history, more than doubling the $700 billion bailout package adopted in the Great Recession.
The legislation is a compromise forged amid partisan rancor after Senate Republicans tried to force through their own bill on Sunday and Democrats balked, with one senator absent after testing positive for the virus and another whose husband is hospitalized.
"It's been the most complicated negotiation I've ever been in in my life," Kaine said, citing the inability of negotiators to meet directly to avoid spreading the virus.
"The level of fear and anxiety was high," he said, "but we were not going to do this massive investment and do it wrong."