Northam Wants To Invest $353M Of Rescue Funds In Small Businesses

VIRGINIA — Virginia Gov. Ralph Northam wants to use $353 million of the $4.3 billion in American Rescue Plan funds available to the state to help small businesses and industries hardest-hit by the COVID-19 pandemic.

Under Northam's plan, released Monday at a special event in Virginia Beach, Virginia would invest $250 million in the Rebuild VA economic recovery fund, $50 million in Virginia Tourism Corporation initiatives, and $53 million for other small businesses, including the Industrial Revitalization Fund and Virginia Main Street program.

“Small businesses are the backbone of our economy, and they need additional support to get back on their feet,” Northam said in a statement Monday. “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 $1.9 trillion American Rescue Plan was signed into law by President Joe Biden on March 11 to speed up the recovery from the economic and health effects of the COVID-19 pandemic. Virginia is expected to receive $4.3 billion in federal funds from the plan.

In May, Northam and General Assembly leaders released a joint statement outlining shared priorities for the $4.3 billion in federal funds.

The General Assembly will oversee the allocation of the funds during a special session. The legislative body is expected to meet on Aug. 2 for a special session following Northam’s request.

Since its creation in August 2020, the Rebuild VA economic recovery fund has awarded $120 million in federal Coronavirus Aid, Relief, and Economic Security Act funding to more than 3,000 small businesses and nonprofit groups. Northam and the General Assembly agreed to fund Rebuild VA with an additional $25 million in March to cover many pending applications for financial aid.

RELATED: Northam Calls Special Legislative Session To Allocate COVID Funds

The new $250 million investment in Rebuild VA proposed by Northam would help meet the ongoing demand for the program and provide grants to additional small businesses.

From March 2020 to April 2021, Virginia lost an estimated $14.5 billion in total tourism spending that the state would have seen if not for the pandemic. With the proposed $50 million investment, the Virginia Tourism Corporation would create the Virginia Tourism Recovery Program to deliver funding to all 114 destination marketing organizations throughout the state.

The funding also would allow the Virginia Tourism Corporation to boost its sports and meeting marketing programs and extend its broadcast and digital marketing into media markets like Charlotte, Pittsburgh, Boston, and Chicago and digital advertising to an additional 29 markets east of the Mississippi River.

“From the Blue Ridge Mountains to the Chesapeake Bay, Virginia is the destination that countless people dream to visit," Del. Luke Torian (D-52nd District), chairman of the House Appropriations Committee, said in a statement Monday. "Now that our doors are open and our lights are on, I am confident that Virginia Tourism will use this funding to reboot our tourism economy and bring people in from across the nation and beyond.”

The proposed $53 million for the Industrial Revitalization Fund and the Virginia Main Street program would help to jumpstart industrial projects through a collaborative approach with local governments. The funding also would support Virginia Main Street’s Technical Assistance Grant program.

This increased investment would focus on providing support for minority and immigrant communities, as well as woman- and minority-owned businesses, the governor's office said.