Exactly two months ago, President Joe Biden signed the American Rescue Plan (ARP) into law.
Previous COVID-19 relief packages largely were reactive to the public health crisis evolving before us. The $2.2 trillion CARES Act (March 2020) and the $900 billion Consolidated Appropriations Act (December 2020) explicitly are described by the U.S. Department of the Treasury as mechanisms that “provided fast and direct economic assistance for American workers, families, small businesses and industries.”
The ARP has the potential to be proactive. Roughly $350 billion of the $1.9 trillion package is housed in the “Coronavirus State and Local Fiscal Recovery Fund” — a batch of aid launched Monday to “help bring back jobs, address [the] pandemic’s economic fallout, and lay the foundation for a strong, equitable recovery,” Treasury said. As the Brookings Institution explained in late March, this money will arrive in “two tranches” — the first later this week and another one year after the first portion — giving the commonwealth and its localities an opportunity to chart paths toward sustained progress.
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“For many cities and counties, the [ARP] state and local funds are not just a $350 billion lifeline; they represent the largest positive fiscal jolt to their budgets in decades …” wrote Brad Whitehead and Joseph Parilla of Brookings’ Metropolitan Policy Program. “… The decisions made in the coming weeks — and over the next year regarding the second tranche of funding — will determine whether cities merely enjoy a brief stimulus or seed a new trajectory of inclusive economic growth.”
We agree. The ARP has to be more than a short-term windfall. Purposeful investments can generate long-term growth for Virginia.
In a March release, U.S. Sens. Mark Warner and Tim Kaine, both Democrats of Virginia, itemized how the commonwealth’s $6.9 billion share of the $350 billion fund would be distributed: $3.766 billion directly to the state; $1.655 billion to the counties; $628 million to metropolitan cities; and $604 million to small cities and towns.
The amounts sound incredible, but the day after the bill was passed, Biden laid out the challenge that comes with legislation of this size: Passing a law is different than implementing it.
“It’s going to require fastidious oversight to make sure there’s no waste or fraud, and the law does what it’s designed to do,” the president said in a March 12 speech at the White House. “And I mean it: We have to get this right. Details matter, because we have to continue to build confidence in the American people that their government can function for them and deliver.”
There are signs that Virginia is addressing that task head-on. On Thursday, Warner held a socially distanced roundtable with the Richmond Regional Transportation Planning Organization (RRTPO) — an arm of the PlanRVA regional commission — at Main Street Station. They discussed how the ARP can support the region’s transportation grid and, at a time when economic growth hinges on regional cooperation, this was an appropriate forum.
Warner and representatives from nine localities — the town of Ashland, the city of Richmond and the counties of Charles City, Chesterfield, Goochland, Hanover, Henrico, New Kent and Powhatan — fought past face coverings and noise from nearby freight trains to discuss pressing needs and ideas for how to steward the ARP dollars.
“We have to just think a lot more creatively than we did in the past,” Warner told RTD Opinions in an interview after the event. “I’m all for getting everybody back [and to] reopen, but I’m not sure we’re all going to come back to downtowns.”
Infrastructure is part of that creative thinking. As part of the ARP, the Richmond region will receive $30 million toward transit. The state is expected to receive $222 million just for broadband and other infrastructure projects. And as the money begins to arrive, the Greater Richmond Region’s economic outlook is on the rise.
In the past few months, companies announcing local projects include Amazon (Henrico robotics fulfillment center, 1,000-plus jobs), Aditxt Therapeutics (downtown Richmond immune monitoring center, 300 jobs), Grenova (biotech firm’s Scott’s Addition relocation and expansion, 250 jobs), Carvana (Chesterfield vehicle inspection and reconditioning facility, 400 jobs) and Lowe’s (Hanover distribution center, 100-plus jobs).
How will the ARP not just plug pandemic-related holes but build capacity for the jobs and mobility needs of the future? From high-speed bus lines to public ride-sharing services, there is flexibility to experiment, without the time pressure of the CARES Act or the severity of COVID-19’s toll before vaccines were developed. But make no mistake: The funding has to deliver.
How will Virginians not just hear about broadband plans but see high-speed connections realized in their communities? Each area’s has unique needs, and Warner encouraged each locality to get to work on a plan for its own internet ambitions. We can’t repeat past errors, and the ARP assistance can be applied with real thought and purpose.
“There are no benefits to enduring two historic economic crises in a 13-year span, except for one: We can improve our policymaking,” U.S. Treasury Secretary Janet Yellen said Monday, adding that during the Great Recession, insufficient relief led to austerity that “undermined the broader recovery.”
We’re confident that purposeful American Rescue Plan investments can do the opposite and generate long-term growth for Virginia. It’s the implementation and the results that remain to be seen.
— Chris Gentilviso