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Sen. Mark Warner, D-Va., speaks at a town hall held in a production facility at Old Bust Head Brewing Company back in February.

Federal aid is on its way to local governments, but there’s a catch: it can't be used to pay back local revenues lost as a result of the pandemic. It can only be used to pay for COVID-19 related expenses. 

That means localities that rely on local taxation, like tourism taxes or meals taxes, won’t be able to use the money to fill the revenue gap left by the COVID-19 crisis. But they will be able to use the money to pay for COVID-19 expenses like bulk purchases of personal protective equipment.

Virginia U.S. Sen. Mark Warner (D) said on a phone call with local leaders in Prince William County Wednesday afternoon that the restrictions placed on federal aid for local governments is “craziness.”

“What was, I think, a crazy restriction was that somehow this was only to be used for direct COVID-19 expenses rather than lost revenues,” Warner said. “If you rely on a meals tax or other revenue sources, those have basically dried up.” 

As a result, Warner said, local governments have tightened their budgets, resulting in hiring freezes and, in some cases, furloughing or laying off county staff. 

“We're talking about laying off policemen, firefighters and EMTs because their other local revenues have dried up,” Warner said. “It is going to cause enormous harm in a lot of communities.” 

In Prince William, the county imposed a hiring freeze, cut 40 new public safety positions from the county’s proposed budget, including police, sheriff and fire positions and dropped a planned 3% raise for county employees as a result of lost revenues. 

Warner added that the Trump administration currently “doesn’t view that money to be flexible to be filling revenue holes.” But, he said, the same restrictions were not placed on other aspects of the federal aid package, such as the Paycheck Protection Program, which is designed to fill small businesses’ revenue holes. 

“This is not at all the same restrictions that were placed when we give out PPP money. That is money that goes to help a business fill up a revenue hole,” Warner said. 

The CARES Act, passed by Congress on March 27, provided $150 billion in aid for state and local governments. Of that, $3.3 billion went to Virginia. The state government will ultimately decide how much of that money will be sent to local governments. 

Prince William Board of Supervisors Chair Ann Wheeler, who was on the call, said Prince William County has incurred about $5 million in COVID 19-related expenses that the county is hoping to be reimbursed for. Some of the largest expenses have been PPE and money given to local nonprofit partners, said Wheeler, D-At Large.  

Wheeler said the federal aid will likely be coming to the county from the state sometime in the next two weeks.

At a budget hearing last month, county officials outlined $28 million in projected revenue losses as a result of the crisis. That included less projected revenue from local taxes such as the sales tax, transient occupancy tax and the county's Business Professional and Occupational License tax. 

That resulted in a smaller county budget for fiscal year in 2021 than what they county had originally proposed before the pandemic. But the county budget is still larger overall than the prior year. 

David Sinclair, the county’s Office of Management & Budget director, said in an email that, as of April 17, the county had spent $3.78 million on COVID-19 efforts. Sinclair said that guidance provided by the US Treasury related to the Coronavirus Relief Fund, “specifically prohibits recovery of lost revenues.”

“However, the County does intend to seek reimbursement for all allowable costs incurred related to COVID-19,” Sinclair said. 

Warner said the U.S. Senate is working towards creating a new federal aid package that will include additional funding for state and local governments. But it’s unclear whether that aid will allow for the recovery of lost revenues that have occurred as a result of the pandemic.

“That's one of the things that we're trying to work through in that next COVID package, as well as additional funding,” Warner said.

Sen. Majority Leader Mitch McConnell, R-Kentucky, has indicated that there will be another round of relief funding that will address the needs of state and local governments. In an interview with Fox News Radio, McConnell discussed the funding, saying: “…we need to make sure that we achieve something that will go beyond simply sending out money." 

"We do want to help them with expenses that are directly related to the coronavirus outbreak but we're not interested in helping them fix age-old problems that they haven't had the courage to fix in the past," McConnell said.

Warner is running for re-election to the U.S. Senate in 2020. His Republican opponent will be decided in Virginia’s June 23 primary. There are three candidates vying for the GOP nomination. 

Reach Daniel Berti at dberti@fauquier.com

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(6) comments

Zediculous

Warner is an embarrassment to all Virginians and should resign .... he's part of the problem with his partisan bluster and cares about nothing but his own career.

InsideCommenter

That's nonsense the guy is an expert on telecommunications and in the Senate has been on the forefront in getting things passed, and working across party lines. He isn't part of any partisan bluster unlike people like George Allen who was an absolutely terrible Senator were. He is going to be re-elected in a landslide this year against his no name opponent.

someone

Warner conducts all of his public forums in guarded, secured facilities. He should be afraid of the general public. Isn't he the Chair of the Senate Intelligence Committee? Warner has done NOTHING & Kane has done even less.

InsideCommenter

Maybe it's because he's a smart person and realizes that it isn't smart to go around shaking hands and kissing babies with this dangerous virus.

Catharpin411

Right on Trump. My tax dollars for only China Virus costs. If a locale or state need dough then open up. If a locale or state needs cash for crummy decisions and bad budgets then tough luck. Those elected officials will HAVE TO explain what they did with my tax dollars that they so totally messed up. If not then why do we need state and local taxes if we always turn to the Fed ATM machine.

BTW exactly what did the state do in December and January to prepare...buy respirators, N95s, gloves. Tell us tax payers exactly what you did.

Tell us when you reacted to protect seniors when we saw them dying on the west coast and New York state while in senior home and senior care...aside from this week announcing a study group...after nearly 60% of all VA deaths are seniors.

Sure I see what the state was doing with guns, as a show, and i see that VA pushed hard to murder babies once they are born humans.

Seems to me good old Virginny was asleep at the switch or unable or unwilling to do several things at once.

Thanks for nothing Democrats

InsideCommenter

This is just hilariously out of step with reality that it's hilarious. [lol][lol]

The reality is the Trump administration long neglected it's duties to combat the virus until we already had a few thousand cases and a full bore crisis on our hands. In addition we have seen his administration cut funding for pandemic response, and then literally STEAL EQUIPMENT STATES PAID FOR. Then to top it off he wastes OUR TAXPAYER DOLLARS ON BAILING OUT HIS RICH FRIENDS. I don't want to hear any nonsense about local governments as they are 10,000 times more fiscally solvent, and our actually doing things to improve the lives of their citizens. Like our now great PwC county board.

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