Virginia is expected to receive more than half a billion dollars from opioid distributors McKesson, AmerisourceBergen, and Cardinal, and opioid manufacturer Johnson & Johnson as a result of Attorney General Herring’s multiyear investigation into the role opioid manufacturers and distributors played in creating and prolonging the opioid crisis in Virginia and across the country. In total, McKesson, AmerisourceBergen, and Cardinal, along with Johnson & Johnson will pay an unprecedented $26 billion that will go towards prevention, treatment, and recovery efforts in communities across the country. A majority of the up to approximately $530 million that Virginia is expected to receive will go towards the Commonwealth’s opioid abatement authority. Additionally, the distributors have agreed to establish an independent clearinghouse that will track and monitor the number of opioids distributors send to healthcare providers and localities.
“The roots of the opioid crisis began in the marketing offices and boardrooms of pharmaceutical companies like Johnson & Johnson and ran straight into the homes and medicine cabinets of Virginians. Distributors like McKesson, AmerisourceBergen, and Cardinal spread billions of doses of highly addictive opioids throughout our communities, helping to fuel a crisis that has killed hundreds of thousands of Americans and upended the lives of Virginians in every corner of our Commonwealth,” said Attorney General Herring. “No dollar amount will ever be able to bring back the Virginians we have lost to this devastating epidemic, but we can at least dedicate our time and resources to preventing further loss through prevention, treatment, and recovery. Throughout my time as attorney general, one of my top priorities has been to go after the pharmaceutical and marketing companies that created and prolonged the deadly opioid crisis, and I will not stop until all those involved are held accountable.”
McKesson, AmerisourceBergen, and Cardinal
Under the terms of the proposed agreement, McKesson, AmerisourceBergen, and Cardinal will pay up to $21 billion over an 18-year period to the participating states and localities, with Virginia expected to receive up to $427 million as its share of the agreement. Additionally, the distributors will establish an independent clearinghouse that will monitor and track the number of opioids distributors are sending to healthcare providers, in order to ensure that they are not sending more than the appropriate number to any certain area or provider. An independent, third-party monitor will ensure that each distributor is complying with the terms of the proposed agreement.
Under the terms of the proposed agreement, Cardinal, McKesson, and AmerisourceBergen will:
• Establish a centralized independent clearinghouse to provide all three distributors and state regulators with aggregated data and analytics about where drugs are going and how often, eliminating blind spots in the current systems used by distributors.
• Use data-driven systems to detect suspicious opioid orders from customer pharmacies.
• Terminate customer pharmacies’ ability to receive shipments, and report those companies to state regulators, when they show certain signs of diversion.
• Prohibit shipping of and report suspicious opioid orders.
• Prohibit sales staff from influencing decisions related to identifying suspicious opioid orders.
• Require senior corporate officials to engage in regular oversight of anti-diversion efforts.
Johnson & Johnson
Under the terms of the proposed agreement, Johnson & Johnson will pay up to $5 billion over a nine-year period with up to $3.7 billion paid during the first three years. Virginia is expected to receive up to approximately $100 million as its share of the agreement. Additionally, Johnson & Johnson will:
• Stop selling opioids.
• Not fund or provide grants to third parties for promoting opioids.
• Not lobby on activities related to opioids.
• Share clinical trial data under the Yale University Open Data Access Project.
Attorney General Herring’s Work on the Opioid Crisis
Earlier this month, Attorney General Herring announced a resolution of his lawsuit against the Sackler family and their company, Purdue Pharma, that will make public tens of millions of documents related to their role in the opioid crisis, and require a payment of more than $4.3 billion for prevention, treatment, and recovery efforts in communities across the country. Virginia is expected to receive at least $80 million as its share of the agreement.
The opioid crisis has been one of Attorney General Herring’s top priorities, and as part of this work he has focused on accountability for pharmaceutical manufacturers and distributors who helped create, prolong, and profit from the opioid crisis in Virginia and around the country. In addition to filing suit against Purdue Pharma and the Sackler Family, Attorney General Herring has also filed suit against and Teva/Cephalon for the role that they played in creating the opioid epidemic. In February, he secured a settlement with McKinsey & Company for its role working for opioid companies, helping companies promote their drugs, and profiting from the opioid epidemic. Additional multistate investigations and legal actions remain ongoing.
During the most recent General Assembly Session, Attorney General Herring was successful in passing legislation that directs funds secured through his ongoing lawsuits against drug manufacturers and distributors toward opioid abuse prevention, treatment, and recovery, ensuring that the most money possible goes to actually address the opioid crisis.
Herring defends key Virginia climate change mitigation program against legal attack
Attorney General Mark R. Herring and his team have successfully defended one of Virginia’s most significant climate change mitigation programs—participation in the Regional Greenhouse Gas Initiative (RGGI)—against a legal challenge that sought to terminate the regulations that allow the Commonwealth to operate its CO2 Budget Trading Program.
Participation in RGGI has already generated $80 million to support climate change mitigation projects, including helping coastal communities in Hampton Roads protect themselves from sea-level rise and funding energy efficiency programs for low-income communities.
“Climate change is a real and urgent threat to the safety and health of Virginians, and to our continued economic success,” said Attorney General Herring. “Virginia’s CO2 Budget Trading Program is a key component in reducing our carbon pollution while also investing in mitigation and resiliency projects that protect communities from the negative effects of climate change, especially sea-level rise. I’m really proud we were able to protect this central piece of our climate strategy, and I appreciate all the work our environmental attorneys did in this complex and important case.”
In October 2020, the Virginia Manufacturers Association filed suit against the Virginia Department of Environmental Quality (DEQ) asking the Richmond Circuit Court to invalidate, vacate, and declare null and void the regulations that govern Virginia’s CO2 Budget Trading Program, which allows for participation in the Regional Greenhouse Gas Initiative. The lawsuit alleged various violations of the Virginia Administrative Process Act and the Virginia Constitution.
Attorney General Herring and his team successfully refuted each alleged violation, and in a nine-page opinion, Judge Beverly Snukals ruled in favor of the OAG and DEQ, concluding that “DEQ did not violate the VAPA or the Virginia Constitution when it issued the Revised Regulation.”
The case was handled by lawyers in Attorney General Herring’s Environmental Section including lead counsel Assistant Attorney General J. Hess, Assistant Attorney General Christopher Bergin, and Senior Assistant Attorney General/Section Chief David Grandis.
Attorney General Herring has been a consistent champion for protecting the environment and fighting climate change. He wrote an official opinion in 2017 confirming that the Commonwealth had the authority to regulate carbon pollution. He successfully fought back against the Trump Administration’s attempts to gut America’s efforts to combat climate change, including Trump’s efforts to replace the Clean Power Plan and repeal the Clean Car Plan. He filed suit against the EPA to protect the Chesapeake Bay, and has secured the largest environmental damages settlement in Virginia history.
AG Herring and his team defeated the latest challenge to the Virginia Values Act, this time in state court
Attorney General Mark R. Herring has again successfully defended the Virginia Values Act, a landmark piece of civil rights legislation that protects LGBT Virginians and others from discrimination, against another legal attack by conservative activists. After oral arguments in Loudoun County Circuit Court on July 16, 2021, Judge James E. Plowman, Jr. ruled from the bench in favor of Attorney General Herring on nearly every count in the case, known as Calvary Road v. Herring.
“Our landmark civil rights protections will remain in place, and Virginia will remain a place that is open and welcoming to all, no matter what you look like, where you come from, how you worship, or who you love,” said Attorney General Herring. “I was proud to support passage of the Virginia Values Act and am so proud of our work to successfully defend the law twice against legal attack. As CNBC recently confirmed when it named Virginia its ‘Best State for Business,’ inclusion and diversity make our Commonwealth stronger.”
In March, Attorney General Herring successfully defeated a challenge to the Virginia Values Act brought in federal court by the same conservative activist legal operation in a case called Updegrove v. Herring.
In successfully defending the Virginia Values Act in this case, Attorney General Herring and his team explained the importance of LGBT discrimination protections, writing in legal briefs that “Virginia’s elected leaders sought to protect the Commonwealth’s more than 300,000 LGBT residents from the type of discrimination that has long infected public life.” The briefs also explained that the plaintiffs lacked standing to challenge the laws because they had not actually been harmed by them. The Court agreed and dismissed every claim regarding the Virginia Values Act and its protections against unlawful discrimination.
Because the judge ruled from the bench, an order consistent with his ruling will be entered in the coming weeks.
Governor Northam launches #YourSayVA Digital Town Hall on speeding and summer travel safety campaign
Governor Ralph Northam announced on July 16, 2021, a new summer travel safety campaign and survey designed to engage Virginians in efforts to reduce speed-related crashes, injuries, and fatalities on the Commonwealth’s roadways.
The “Don’t Speed Thru Summer. Make it Last.” initiative uses both online and traditional media to focus on the dangers of speed and aggressive driving. According to the Virginia Department of Motor Vehicles and the Governor’s Executive Leadership Team on Highway Safety, preliminary numbers indicate speed-related crashes have already claimed 182 lives on Virginia’s roadways and injured another 4,248 people within the first six months of 2021. Last year, 22,479 speed-related crashes on Virginia roadways resulted in 406 fatalities, the highest number in at least 10 years.
“Speed is driving up the number of crashes, injuries, and fatalities on our roadways to record high levels,” said Governor Northam. “But these are not just statistics, these are the lives of parents, children, siblings, spouses, friends, and loved ones. As the summer continues, I urge all Virginians to make safe driving a priority as you travel throughout the Commonwealth and beyond.”
In addition, Governor Northam is inviting Virginians to participate in the #YourSayVA Digital Town Hall on speeding through Friday, August 13. To participate, visit the Commonwealth’s new highway safety portal, TZDVA.org, and click the icon for the #YourSayVA Digital Town Hall to access the anonymous survey. The data collected from the #YourSayVA Digital Town Hall will better inform state leaders of driving behaviors related to speeding.
Speeding is the latest traffic-safety priority to be addressed by the Governor and his Executive Leadership Team on Highway Safety, which is composed of representatives from the Virginia Departments of Motor Vehicles, Transportation, Health, Education, and State Police, and led by the Secretaries of Transportation and Public Safety and Homeland Security. The team is charged with reducing fatalities on Virginia’s roadways and driving change in the Commonwealth’s highway safety culture.
“While this may be hard to believe, driving seven miles per hour faster than the posted speed limit of 65 miles per hour saves approximately five minutes when traveling to a destination 60 miles away,” said Secretary of Transportation Shannon Valentine. “Speeding reduces a driver’s ability to safely maneuver around curves, adds to the time it takes to come to a complete stop, and increases the risk of crashes and injuries.”
“Every driver in Virginia plays a role in helping prevent a crash on our roadways by following the posted speed limits,” said Secretary of Public Safety and Homeland Security Brian Moran. “Complying with the posted speed limits not only protects your life, but the lives around you.”
The Executive Leadership Team on Highway Safety will be promoting the “Don’t Speed Thru Summer. Make it Last.” campaign, both as a group and as individual agencies throughout summer. To stay up to date, follow the hashtag #SlowDownVA on Facebook, Twitter, and Instagram.
Virginia’s unemployment rate dropped again, falling to 4.3 percent in June
Governor Ralph Northam announced that Virginia’s unemployment rate dropped 0.2-percentage points to 4.3 percent in June, compared to 8.8 percent one year ago. The seasonally adjusted unemployment rate in the Commonwealth continues to be below the national rate of 5.8 percent.
“Virginia’s falling unemployment rate and expanding labor force show the strength of our economy and business climate,” said Governor Northam. “We continue to be recognized as the best place in America to do business because we are building a Commonwealth where both workers and employers can thrive. We can all be optimistic about what the future holds as we move beyond this pandemic.”
Virginia had the fourth-lowest seasonally adjusted unemployment rate among the Southeast states behind Alabama, Oklahoma, and Georgia.
“The Commonwealth’s positive job growth and falling unemployment rate are welcome signs that workers are finding safety and opportunity in the job market,” said Secretary of Labor Megan Healy. “I look forward to maintaining this positive momentum in partnership with our business and workforce development partners, who are working diligently to ensure Virginians have all the support they need to transition back into employment.”
“Another drop in the Commonwealth’s unemployment rate is a great way to conclude this exciting week,” said Secretary of Commerce and Trade Brian Ball. “We expect to see continuing job growth in the coming months.”
In June, Virginia saw over-the-year job gains of 2.8 percent, and total nonfarm payroll employment increased by 3,200 jobs. The labor force increased by 4,343 to 4,234,360, as the number of unemployed residents decreased by 5,448 to 183,799. The number of employed residents rose by 9,791 to 4,050,561.
The private sector recorded an over-the-year gain of 179,900 jobs, and employment in the public sector added 10,500 jobs. Compared to a year ago, on a seasonally adjusted basis, 10 of 11 major industry divisions experienced employment gains. The largest over-the-year job gain occurred in leisure and hospitality, up 67,200 jobs, or 25.5 percent. The next largest over-the-year job gain occurred in trade and transportation, up 40,100 jobs, or 6.5 percent. Professional and business services experienced the third-largest over-the-year job gain of 26,300 jobs or 3.5 percent.
For a greater statistical breakdown, visit the Virginia Employment Commission’s website at vec.virginia.gov.
Governor Northam announces Virginia to invest $700 million in American Rescue Plan Funding to achieve universal broadband by 2024
Governor Ralph Northam announced that Virginia plans to invest $700 million in American Rescue Plan funding to expedite the deployment of last-mile broadband infrastructure to unserved areas and close the digital divide within the next three years. This proposal will accelerate the Governor’s 10-year goal for achieving universal internet access from 2028 to 2024, with the majority of connections obligated within the next 18 months. In May, Governor Northam and General Assembly leaders released a joint statement outlining shared priorities for allocating the $4.3 billion in federal funds available to the Commonwealth from the American Rescue Plan.
The Governor made the announcement at the Southwest Virginia Higher Education Center in Abingdon and was joined by U.S. Senator Mark Warner, State Senator Janet Howell and Delegate Luke Torian, who chair the General Assembly’s money committees, and State Senator Jennifer Boysko and Delegate Roslyn Tyler, who lead Virginia’s Broadband Advisory Council. Governor Northam also reported that the Commonwealth has successfully bridged half of the digital divide, with an estimated 233,500 unserved locations remaining.
“It’s time to close the digital divide in our Commonwealth and treat internet service like the 21st-century necessity that it is—not just a luxury for some, but an essential utility for all,” said Governor Northam. “The pandemic has reinforced how important high-quality broadband is for the health, education, and economic opportunity, and we cannot afford to leave any community behind. With this historic $700 million investment, universal broadband is now within our reach. I am grateful to Senator Warner for fighting to include this funding in the American Rescue Plan, which will be key to the success of local connectivity efforts and to ensuring every Virginian has affordable, reliable, and equitable access to high-speed internet.”
Since 2018, the Commonwealth has awarded approximately $124 million in broadband grants and connected over 140,000 homes, businesses, and community anchors. Governor Northam and the General Assembly made historic investments—$50 million in 2020 and an additional $50 million in 2021—in the Virginia Telecommunication Initiative (VATI), a public-private partnership that provides targeted financial assistance to extend broadband service to areas currently unserved by a provider. With this $700 million allocation of federal dollars and continued state investment, the Commonwealth has the necessary resources to meet the tremendous demand from localities and broadband providers and close the digital divide in Virginia.
“With telehealth and telework becoming permanent staples across the nation, access to broadband is more critical than ever,” said U.S. Senator Mark R. Warner. “Earlier this year, I was proud to help deliver more than $3.7 billion dollars in direct fiscal relief for the Commonwealth through the American Rescue Plan, including hundreds of millions of dollars for broadband. I’m hopeful that my friends in the General Assembly will use $700 million of that funding to expand access to broadband, thereby creating economic opportunity and ensuring that every Virginian can meaningfully participate in our 21st-century economy.”
“Localities and broadband providers have stepped up over the past three years and helped the Commonwealth connect thousands of unserved Virginians,” said Secretary of Commerce and Trade Brian Ball. “With today’s announcement, large regional projects that achieve universal service can be funded across the Commonwealth without delay.”
Because Governor Northam prioritized broadband expansion well before the pandemic, Virginia is on track to be one of the first states in the country to achieve universal broadband service. In 2019, the Governor worked with the General Assembly to establish a pilot program that promotes collaboration between localities, electric utilities, and internet service providers to connect unserved areas to high-speed internet. In just two years of the pilot program, Virginia’s utility companies have helped connect more than 13,000 homes and businesses across the Commonwealth. Earlier this year, Governor Northam signed bipartisan legislation that makes the pilot program permanent.
“The Commonwealth continues to prioritize funding for universal broadband access, and I’m encouraged to see these investments coming ahead of schedule,” said Senator Janet Howell, Chair of the Senate Finance and Appropriations Committee. “This appropriation of federal dollars will go a long way towards supporting the investments that the Commonwealth has already made to bridge the digital divide.”
“Funding for broadband is more critical now than ever,” said Delegate Luke Torian, Chair of the House Appropriations Committee. “We must continue to ensure that all citizens of the Commonwealth have access to quality internet access.”
“The Broadband Advisory Council has long prioritized funding to reduce the cost of broadband access and connect unserved Virginians,” said Senator Jennifer Boysko, Chair of the Broadband Advisory Council. “With this investment of American Rescue Plan dollars, we will greatly accelerate our progress.”
“I have lived in a rural area my entire life and I know that the Commonwealth benefits as a whole when we lift all communities,” said Delegate Roslyn Tyler, Vice-Chair of the Broadband Advisory Council. “This investment will have a tremendous impact on countless Virginians and allow our communities to prosper and grow.”
Revenue collections surged 26.4 percent between April and June, resulting in largest budget surplus in Virginia history
On July 14, 2021, Governor Ralph Northam reported that Virginia reached the end of the fiscal year 2021 with a historic $2.6 billion surplus, the largest in the Commonwealth’s history. Total revenue collections soared 14.5 percent over the fiscal year 2020, ahead of the forecast of 2.7 percent growth.
“We have effectively managed Virginia’s finances through the pandemic, and now we are seeing the results—record-breaking revenue gains, a recovery that has outpaced the nation, and recognition as the best place to do business,” said Governor Northam. “Fueled by a surging economy, federal American Rescue Plan funds, and the largest surplus in Virginia history, we have significant resources available to make transformational investments in this Commonwealth. I look forward to working with the General Assembly in the fall to seize this opportunity so we can build a brighter future for all Virginians. ”
All major general fund revenue sources exceeded their forecasts for the fiscal year. Individual non withholding taxes, one of the Commonwealth’s most volatile revenue sources, accounted for about half of the surplus, although collections in payroll withholding, sales, and corporate income taxes were also well above their respective forecasts.
Total revenue collections reached $8.6 billion in the final quarter of the fiscal year 2021. In June, revenues decreased by $180.8 million, or 5.8 percent, compared to the previous year, which can be attributed to the extension of the individual income tax filing deadline to May 17.
“We expected a strong revenue performance and this surplus is even larger than initially anticipated,” said Secretary of Finance Joe Flores. “We are encouraged that for the fiscal year, payroll withholding and retail sales taxes increased by 6.4 percent, signifying that Virginia’s underlying economic foundation is strong.”
The Commonwealth will release the final figures for the fiscal year 2021 on August 18 at the Joint Money Committee meeting.
Analysis of Fiscal Year 2021 Revenues Based on Preliminary Data
• Total general fund revenue collections, excluding transfers, exceeded the official forecast (Chapter 552) by $2.6 billion (11.7 percent variance) in the fiscal year 2021.
• The 30-year average general fund revenue forecast variance is 1.6 percent.
• Payroll withholding and sales tax collections, 80 percent of total revenues, and the best indicator of current economic activity in the Commonwealth finished $560.2 million or 3.3 percent ahead of the forecast.
• Payroll withholding grew by 4.7 percent, exceeding the forecast of 2.7 percent growth.
• Sales tax collections increased 12.4 percent as compared to the annual forecast of 4.7 percent. Brick and mortar store sales increased 7.6 percent and internet sales increased 32.3 percent.
• Fourth-quarter results show that payroll withholding and sales tax grew 12.5 percent.
• Non-withholding income tax collections finished the year ahead of expectations, up 37.1 percent. This was mainly due to a 68.0 percent increase in final payments to the Department of Taxation. Estimated payments increased 19.8 percent.
• Individual income tax refunds were positive to the forecast, as the average check size did not increase. Tax refunds were $339.4 million below expectations, a positive to the bottom line.
• Corporate income tax collections increased 49.8 percent for the year, ahead of the annual forecast of 27.4 percent. A preliminary analysis of the data reveals a broad-based increase from larger corporations based on economic-related growth.
• A complete analysis of all final receipts for revenue sources, including transfers, will not be available until the Joint Money Committee meeting on August 18.