eNews – September 12, 2025
Innovation Award winners to be announced next week, Strong general fund revenues, CSA training for localities...and more!
Friday, September 12, 2025/Categories: eNews
This edition of eNews is sponsored by Deporter, Dominick & Associates leaders in quality outdoor lighting for infrastructure. Learn more >
In this issue:
VML News
Finance
Health & Human Services
Transportation
Opportunities
VML News
Innovation Award winners to be announced next week
Thanks to everyone who submitted entries this year! We can tell from the large volume of submissions that it was a great year for innovation in Virginia. The judging is nearly complete, and we look forward to announcing the winners by the end of next week. When ready, we will post to our Facebook page, News Releases page, and send out a Special Edition of eNews to announce the winners.
Good luck everyone!
VML Contact: Manuel Timbreza, mtimbreza@vml.org
Finance
General fund revenues come in strong through August amid continued economic uncertainty
Acknowledging that July and August are not considered significant months of revenue for the Commonwealth, Secretary Stephen Cummings reported earlier this week that general fund revenues are up for the first two months of the fiscal year, compared to the same time period in FY 2025. Revenues in July and August consist primarily of “withholding, sales taxes, and other sources that have regular monthly payments,” but don’t include revenues from nonwithholding taxes, refunds, or corporate income.
That said, general fund revenues were up 7.0 percent year-over-year through August, according to the secretary. Compared to the official forecast, revenues are up $266.5 million.
The latest positive monthly revenue report comes amid continued economic uncertainty. There’s no doubt that inflation has fallen from its pandemic-area highs but achieving that last percentage point is proving elusive. Yesterday, it was reported that the consumer price index (CPI) rose by 0.4%, raising the annual rate to 2.9%, the largest gain since January. Core inflation, the Federal Reserve Board’s preferred measure of inflation that excludes food and energy, rose to 3.1%. That’s going the wrong way if the fed is aiming for 2.0%.
Regarding inflation, questions remain about how long businesses can continue to absorb higher tariffs and when those costs will be passed onto consumers. As the University of Michigan’s survey of consumer sentiment continues to gyrate – it was down nearly 6% in August, the first decline in four months – consumers have continued to open their wallets.
But the latest report “was visible across groups by age, income, and stock wealth.” That’s worrying because Moody’s Analytics reported earlier this year that the highest 10% of US income earners (i.e. those making over $250,000) have been driving almost half of consumer spending of late. If upper income households start to pull back, it could be a troubling sign in the months ahead.
Obviously, the other economic variable the Federal Reserve has been monitoring is employment. On Thursday, the Labor Department reported that weekly unemployment compensation filings rose to 263,000, the highest level since October 2021. Those disappointing numbers come on the heels of earlier reports from the Bureau of Labor Statistics (BLS) this week that showed unemployment from April 2024 through March 2025 was much less robust than previously thought. According to CNBC, “The numbers, which are adjusted from data in the quarterly census and reflect updated information on business openings and closings, add to evidence that the employment picture in the U.S. is weakening.”
In the Commonwealth, the impact of federal employment decisions is only beginning to show up in the data. And later this month Northern Virginia is likely to take a hit as federal employees who agreed to voluntary retirements are removed from the U.S. Treasury’s payroll.
While the Federal Reserve is certain to lower interest rates this month, the question is not if but how much. The other question is how long consumers can prop up the economy, especially in the face of rising costs and a labor market that has clearly stalled out. For that, we’ll need to wait another month.
In the meantime, the process of developing the Commonwealth’s official general fund revenue outlook begins in earnest next month.
VML Contact: Joe Flores, jflores@vml.org
House Appropriations Committee Chair Luke Torian issues stern fiscal warning to House colleagues
Given the last word at a Joint Meeting of the House Emergency Committee on the Impacts of Federal Workforce and Funding Reductions and the House Appropriations Committee (HAC) yesterday (Sept. 11), Del. Torian advised his colleagues that they’ve been forewarned about the fiscal predicament facing the Commonwealth. Chairman Torian was referencing a sobering 46-page slide deck the staff of House Appropriations had just concluded for the two committees that summarized the challenges budget writers will face when they prepare a fiscal plan for the next biennium.
That presentation summarized the potential consequences to the Commonwealth of actions taken by the federal government regarding grants, employment levels, and policy changes incorporated into HR 1. Federal Budget Reconciliation Bill.
Setting the stage for the discussion, HAC staff noted that ongoing obligations for K-12 education and Medicaid alone will likely require a minimum of $1.8 billion in new general funds when the 2026-28 biennial budget is crafted. Those are additional resources that will be required simply to maintain current program operations for students and teachers in the K-12 system and health and long-term care recipients in the Medicaid program.
In addition, staff noted that federal changes to the federal SNAP (i.e. food stamp) program are expected to cost $360 million and decisions to extend premiums for individuals on Virginia’s health care exchange program will add $250 million to the bill.
The price tag for other federal actions includes the cost of:
- expanding work requirements for SNAP recipients;
- redetermining eligibility for Medicaid recipients two times a year, instead of only once;
- implementing work/community engagement requirements for Medicaid expansion recipients;
- maintaining access to higher education for certain populations;
- supporting laid-off federal employees; and
- federal tax policy changes.
With a litany of known and unknown costs facing the Commonwealth – not to mention the uncertain general fund revenue outlook – it’s no wonder that Chairman Torian warned his colleagues (and those in the audience) about the financial predicament facing the Commonwealth. “There will be changes,” he said, and “there will be challenges”, but priority will be given to K-12 education, health care, and workforce issues. And despite the current state of Virginia’s economy, including healthy reserve funds, requests to address budget holes created by the federal government will be scrutinized.
It seems clear that next session’s budget conversations won’t be for the faint of heart. Throw in a new cast of characters moving into the Governor’s Office, and it certainly looks like the 2026 Session will be anything but boring.
VML Contact: Joe Flores, jflores@vml.org
Health & Human Services
Behavioral health commission gets Marcus Alert update
The Marcus Alert system is a statewide mental health response program implemented by the General Assembly in 2021, including the 988 crisis call line and layers of response at the local/regional level. Localities and Community Services Boards (CSBs) which implement and operate the system, are being added in by region. About one third of localities have officially implemented the program (and more following protocols of the program but not yet officially a part of the program), but challenges remain and there are options to improve it, according to a Behavioral Health Commission staff report delivered to the Commission on Sept. 9.
Findings by staff included:
- Although the majority of calls to 911 do not receive a behavioral health response, some positive trends have emerged since 2022, including that the rate of behavioral health responses have doubled, and there has been an increase in the rate of law enforcement responses that include a Crisis Intervention Team (CIT)-trained officer.
- Lower urgency calls are rarely transferred from 911 to 988 (approximately six percent) – possibly because some people do not want to be transferred; some Public Safety Answering Points (PSAPs) lack appropriate technology and funding; and some calls come from family or neighbors rather than the person experiencing a mental health situation.
- Approximately 67 percent of localities that have implemented Marcus Alert have a community response team that responds to 911 calls; creating co-response teams that cover multiple localities could increase coverage, but are uncommon in Virginia, with only about five multi-jurisdictional teams available. The lack of statutory clarity may contribute to liability concerns over creating multi-jurisdictional teams.
Staff presented several options for consideration to improve the program, including:
- Improve the process for continued evaluation of the program’s effectiveness;
- Amend the local plan guide to strongly encourage CSBs to hire a local Marcus Alert coordinator if they don’t already have one; and
- Revise data collection procedures to allow PSAPs to submit Marcus Alert data through their computer-aided dispatch (CAD) system reports to minimize the administrative burden on these staff.
Some commission members also expressed concern about the funding for the program – each CSB receives $600,000 when they officially enter the program, no matter the population or geographic size of that CSB.
Another concern raised by a few members was that smaller jurisdictions (less than 40,000 population) may but are not required by law to implement all the protocols of the program because of challenges with staffing and funding (e.g., enhanced law enforcement training including CIT training, implementing co-response teams).
That may be something the commission more fully discusses as it makes recommendations for the 2026 General Assembly Session.
The full commission staff report can be seen here>.
VML Contact: Janet Areson, jareson@vml.org
CSA adds more training for localities
In response to requests for more training for members of Community Policy and Management Teams (CPMTs), the Office of Children’s Services (OCS) has launched new training on Zoom for CPMT chairs and members to address core components of the Children’s Services Act (CSA) and its requirements. The training is open to anyone interested learning more of the technical aspects and requirements of the program.
CSA is a state-supervised, local operated program that addresses the needs of at-risk youth and families whose issues cross more than one agency. It emphasizes community-based services but also includes residential placements as needed. Costs are shared by state and local government.
OCS is also working on a pilot program to work with localities struggling with the teamwork aspects of the program. The program will focus on relationship building and soft skills in carrying out the requirements of the program as a team. That program will begin in early November.
More information can be found on the OCS website here >.
VML Contact: Janet Areson, jareson@vml.org
Transportation
Reminder: USDOT Federal Grant Deadline is Sept. 30
The National League of Cities (NLC) wants to remind localities that USDOT grants with September 30, 2025, completion deadlines will be enforced and are unlikely to receive any extensions from the Administration.
Please check grant deadlines to make sure no local grants fall out of compliance and risk losing any USDOT grants.
Members can use the NLC Rebuilding America dashboard to review a list of all IIJA grantees in Virginia. If you are having trouble getting answers from USDOT, please contact NLC. Most of this funding was awarded early in FY22 and includes:
VML Contact: Mitchell Smiley, msmiley@vml.org
National League of Cities transportation webinar to be held Sept. 24
The National League of Cities (NLC) is hosting "State of Play for Congress’ Next Transportation Bill”. This webinar is for local leaders, intergovernmental staff, and transportation staff and will be held on Wednesday, Sept. 24 from 4:00-5:00 p.m. ET.
This webinar will breakdown of Congress’ next transportation reauthorization bill and how the Committees in the House and Senate are organizing this fall to create a package that can meet the needs of their Districts and the new Administration. NLC’s legislative staff will cover key priorities for cities and towns of all sizes, and which proposals Members of Congress are critical to advancing early wins for these priorities in the fall. Local governments own a substantial amount of the nation’s infrastructure network, and the federal transportation bill programs offer critical budget support for roads, safety, bridges, rail, transit and more.
Register here >.
VML Contact: Mitchell Smiley, msmiley@vml.org
Opportunities
Southern Virginia Regional Housing Summit 2025 happening Oct. 9
Those who want to make their mark on residential development in Southern Virginia are encouraged to attend the Southern Virginia Regional Housing Summit happening at the Institute for Advanced Learning and Research in Danville on Oct. 9.
CEO of Virginia Housing Tammy Neale will be the keynote speaker.
More information – including the agenda and registration are available here >.
Contact: Susan McCulloch, mcculse@danvilleva.gov
Virginia Coastal Resilience Collaborative Conference: Oct. 3 at William & Mary
Local officials interested in resiliency who wish to better understand opportunities for local governments funding resilience efforts, are encouraged to attend the Virginia Coastal Resilience Collaborative (VCRC) conference “Securing Virginia’s Future: National Perspectives on State & Local Resilience Finance.”
This event takes place on Friday, Oct. 3 from 8:30am-3:00pm at the Williamsburg Lodge on the campus of William & Mary and brings together national, state, and local leaders in resilience and finance.
Speakers include national leaders such as Alice Hill and Samantha (Sam) Medlock (formerly with ASFPM) who will set the stage for resilience finance at the national level.
Attendees will work with their own experience and input from national resilience leaders to develop options addressing resilience finance challenges at the local level. Attendees will also have the opportunity to hear from and discuss these options with local and state resilience leaders.
More information – including a full agenda and registration – is available here >.
VCRC Contact: Thomas Ruppert, vcrc@wm.edu
Deadline to submit for Excellence in Virginia Government Awards is Sept. 15
Spotlighting Virginia’s best in local government and beyond!
For nearly 20 years, the Excellence in Virginia Government Awards have celebrated outstanding public service across the Commonwealth. Hosted by the L. Douglas Wilder School of Government and Public Affairs at VCU, these awards honor the individuals, organizations and innovations making a tangible difference in the lives of Virginians.
From small-town champions to statewide trailblazers, the awards shine a light on those whose work strengthens our communities and inspires civic excellence.
Award categories include:
- Community Enhancement
- Innovation in Government
- Public-Private Partnership
- Hill-Robinson Expansion of Freedom
- Unsung Heroes (Career Public Servants)
- Grace E. Harris Leadership
- Lifetime Achievement
Nominations are open through Monday, Sept. 15.
Learn more and access the nomination form here >.
VCU Contact: Tiffany Murray-Robertson, tfmurray@vcu.ed