Virginia’s public health and economy are first and foremost. The cavalier attitude by any American — including the president — toward the coronavirus is of highest concern. Old habits die hard and a failure by some to embrace mask-wearing, physical distancing or hand-washing contributes to the continued community spread of COVID-19, and the subsequent economic fallout.
What happens when outdoor solutions crafted since March — beach trips, park picnic, tents at restaurants — shift inside? Dozens of studies have attempted to create a crystal ball on the pandemic’s presence during the winter. We can’t control the science but we can control our mindset during the colder months. It must be built on discipline.
First, our economy is moving but sluggish. An October Federal Reserve Bank of Richmond snapshot shows that while Virginia has recovered in recent weeks, some industries still are being hit hard.
In August, the state added 68,000 jobs (1.8%). But 60% of those positions (40,800) were in the government sector. The leisure and hospitality sector added 6,300 jobs but still has been shellacked, losing 83,000 jobs from August 2019 to August of this year.
Every sporting event with manufactured crowd noise, or awards show only available on YouTube, or campaign debate with Plexiglas is a reminder of how the virus upends our prepandemic travel habits. Also lost is the revenue associated with those experiences.
Leisure and hospitality are critical for our region because the local economy is a tourism economy. Ahead of Richmond Region Tourism’s annual meeting in late September, The Times-Dispatch’s Gregory J. Gilligan penned a piece explaining how sports-related tourism carried growth in 2019. Eight of the top 10 hotel occupancy dates were tied to athletic events, including NASCAR races, Jefferson Cup youth soccer tournaments and JROTC Drill Championships.
But thanks to COVID-19, lodging taxes in Richmond and Chesterfield, Hanover and Henrico counties were down nearly 20% for the year ending in May, compared to the previous 12 months. Without the region’s $2.6 billion tourism economy, households would pay an extra $585 per year in taxes, Richmond Region Tourism notes.
Second, the recent domino effect of COVID-19 infections and quarantines among top federal officials puts one of Virginia’s largest economic sectors — defense — at risk. Each year, the Joint Legislative Audit and Review Commission (JLARC) publishes a reference guide on how the state compares to others around the country. In the 2020 edition released in January, JLARC noted that Virginia received the largest value of federal contract awards in 2018, at roughly $58.4 billion. Nearly 60% of that figure was U.S. Department of Defense contracts.
What will the 2020 economic impact be? The White House coronavirus outbreak seeped well beyond the first family’s quarters. Coast Guard Vice Commandant Adm. Charles W. Ray tested positive after a Sept. 27 visit. Members of the Joint Chiefs of Staff were put in self-isolation, and top Marine Corps Gen. Gary L. Thomas tested positive after a meeting with Ray. The Hill has chronicled the Pentagon’s subsequent scramble to conduct contact tracing, which is an expensive endeavor.
Add on 27 Virginia military bases, and each service branch having at least one commonwealth foothold, and COVID-19 outbreaks among military leaders are a threat to the commonwealth and the nation. We’d prefer to see federal resources go toward fostering the stability of our national security and economy, not COVID-19 cases at the highest levels of government.
Third, a lack of national discipline on the coronavirus puts local governments at further risk. In the commonwealth, we keep seeing money come in for local schools ($220 million), for broadband internet access ($30 million) and for housing assistance ($12 million). But what’s the long-term solution? Holes in make-or-break services for Virginia families eventually will have to be plugged with ideas other than federal CARES Act dollars.
Even though Gov. Ralph Northam generously dispersed $1.3 billion of Virginia’s $3.1 billion state allotment to localities, the funding has to be used by the end of this year. Is another $3 trillion federal life vest for the entire nation really feasible?
And even with the CARES Act, localities like Henrico had to shed almost $100 million in planned expenses just to maintain tax rates, keep critical education and public safety services funded, and avoid layoffs or salary cuts. According to the county’s annual report released Oct. 1, the 2020-21 budget regularly will be reviewed, with quarterly assessments on appropriations. More can change.
No one has a crystal ball. But in October 2021, we’d like to see an America that’s much closer to being pandemic-free. That path forward starts with discipline — with leadership that takes the pandemic seriously; wears masks, practices physical distancing and promotes hand hygiene to keep the economy open; and works toward a responsible deployment of a vaccine with no false promises. A healthy public, economy, military, state and nation will follow.
— Chris Gentilviso