Virginia’s beleaguered tourism and hospitality industry would get a $300 million boost in federal emergency aid that Gov. Ralph Northam proposes to use to help businesses recover from the COVID-19 pandemic.
Northam proposed on Monday to designate $250 million of the $4.3 billion that Virginia has received under the American Rescue Plan Act to the Rebuild VA program he launched in 2020 to provide grants to small businesses hit hard by the pandemic and by restrictions the governor imposed to prevent the spread of the coronavirus.
In an announcement with state legislators in Virginia Beach, the governor also proposed to use $50 million to jump-start marketing by Virginia Tourism Corp. and “destination marketing organizations” — local and regional tourism offices — as they work to recover an estimated $14.5 billion in tourist and travel revenues lost during the nearly 16-month public health emergency.
Northam also proposed to budget $53 million for the Industrial Revitalization Fund, to help local governments prepare sites to attract economic development; and for the Virginia Main Street program, to encourage towns to increase their support of minority and immigrant communities, as well as businesses owned by women and minorities.
“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,” he said. “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.”
The proposal drew an immediate endorsement from the Virginia Restaurant, Lodging and Travel Association, which had asked for $275 million in relief funds for businesses in the state’s economically struggling hospitality and tourism industries.
“It seems like exactly what we were asking for,” said President and CEO Eric Terry, whose only condition would be to revise criteria that prevent some larger businesses from applying for Rebuild VA grants.
Northam unveiled the $353 million package with House Speaker Eileen Filler-Corn, D-Fairfax, and Senate Majority Leader Dick Saslaw, D-Fairfax, at the beach resort city in a show of unity as the General Assembly prepares to convene on Aug. 2 to determine how to spend the state’s share of the $1.9 trillion American Rescue Plan Act that Democrats passed in Congress.
With all 100 seats in the Democratic-controlled House of Delegates up for election in November, three incumbent Democrats from Virginia Beach also joined the governor to announce the budget proposal — Kelly Convirs-Fowler, Nancy Guy and Alex Askew.
The assembly amended the state budget this year to ensure that the legislature would determine how to spend any additional federal emergency aid to Virginia.
The governor’s office also showcased support from the leaders of the legislature’s budget committees — Senate Finance Chair Janet Howell, D-Fairfax, and House Appropriations Chair Luke Torian, D-Prince William.
The proposed funding package is built around Rebuild VA, a grant program that Northam launched last year with $120 million in federal aid under the CARES Act and that the assembly bolstered this year with an additional $25 million in revenues from a tax on electronic skill games before a state law banning them took effect on July 1.
Even so, the program has run out of money with about 9,000 applications pending from Virginia-based businesses that employ 250 or fewer people and have gross revenues of $10 million or less.
“Rebuild VA has been a lifeline of support for countless Virginia businesses,” Howell said in a statement released by Northam’s office. “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.”
Terry, with the hospitality and travel association, said he hopes the state will “tweak” its guidelines for participating in the grant program, which excludes some large businesses, such as hotels, that he said need help.
“You can’t put too many restrictions on businesses,” he said in an interview on Monday.
Secretary of Commerce and Trade Brian Ball said the first priority for the new money will be to help businesses whose requests are pending, but he added, “We’re cognizant of the issue, that’s for sure.”
The proposed package also includes the help requested by Virginia Tourism President Rita McClenny, who appeared before the House and Senate budget committees this year to make the case for aid to the tourism and hospitality industry.
Those businesses employ about 10% of workers but represent 45% of the jobs lost during the pandemic, she told Senate Finance in May. “We want to prepare our communities to open their doors to visitors.”
Northam’s proposal would provide about $20 million for the state tourism office and $30 million for 114 destination marketing organizations around the state to restore their marketing programs and expand their reach to new markets, including major media centers in Chicago, Boston, Pittsburgh and Charlotte, N.C.
“The tourism economy has always been, and will always be, a shining light here in the commonwealth,” Torian said in a statement released by the governor’s office.