Over the past several years, federal agencies announced billions of dollars in grants for local governments, businesses, nonprofits and community organizations throughout Virginia.
The money trickled down through the Biden administration’s sweeping laws aimed at boosting infrastructure and fighting climate change.
Now, revoking those funding sources is a key part of President Donald Trump’s agenda. An executive order on Trump’s first day in office told federal agencies to immediately stop disbursing all funds appropriated through the 2021 Infrastructure Investment and Jobs Act and 2022 Inflation Reduction Act.
The initial action ordered an across-the-board funding freeze, which sent major nationwide programs into chaos, including Medicaid and Head Start. The wider freeze was later rescinded, but the White House says it still applies to the infrastructure and climate laws. Advocates are fighting the intended funding freeze in court, leaving things up in the air and changing daily.
Meanwhile, officials across Virginia are scrambling to figure out what it could mean for specific projects, which range from neighborhood-level work to statewide rebates and infrastructure.
“There’s a lot of uncertainty now among those who have received these federal funds, grants or tax incentives about whether they can count on them or not,” said Sen. Tim Kaine. “And if they can’t, can they continue forward with their plans or not?”
Virginia was awarded at least $4.8 billion in funding through the IRA and infrastructure law, according to data shared with WHRO by Atlas Public Policy. That does not include loans or tax credits.
About $700 million was earmarked for projects in Hampton Roads.
The long list includes money for the High Street Innovation Corridor in Portsmouth; electric school buses in Newport News; the Norfolk Harbor Channel deepening; electric cargo handling equipment at the Port of Virginia; using drones to deliver medical supplies on the Eastern Shore; expanded research space at Jefferson Lab; reconnecting Southeast Newport News to downtown; installing a solar array at a car dealership in Williamsburg; and raising a portion of Pungo Ferry Road in Virginia Beach.
Some grant recipients were told last week that their federal funding was paused – such as a recycling education grant for the Hampton Roads Planning District Commission and energy efficiency money for the city of Hampton.
Others say federal partners have confirmed their money appears safe for now, including the city of Norfolk’s massive floodwall project in partnership with the U.S. Army Corps of Engineers, which received an initial influx of $400 million through the 2021 infrastructure law.
The Army Corps’ Norfolk District said in an email the Norfolk project has received about $27 million of that so far and does not expect any impacts to the rest, or to the harbor deepening effort, which has already contracted out work.
Lewie Lawrence, head of the Middle Peninsula Planning DIstrict Commission, said the organization receives millions in federal funding for a variety of local projects and has not heard of any changes so far.
“Everything’s in neutral right now but we are still moving ahead, because I have no rational basis for not moving ahead,” he said. “Everything that we’re receiving from our numerous state and federal partners is to stay the course.”
However, the federal funding freeze announcements drew immediate concerns from community members, he said.
“What people were responding to was, ‘Hey, I’m getting funding for a living shoreline,’ or ‘Hey, I’m getting funding for septic systems.’ Or the contractor was saying, ‘Hey, I need to be paid. Is my funding in jeopardy?’” Lawrence said. “If they’re picking up any paper and they see a headline that says ‘federal grant money frozen,’ they’re immediately going to wonder, does this impact us?’
He said the Middle Peninsula commission is trying to communicate that no one knows what’s going to happen for sure, but it will take time to figure out and the best course of action is “to call your congressional delegation and ask them.”
Federal grants received by local governments are typically reimbursable, Lawrence said. If agencies don’t get reimbursed, taxpayers could be left with the bill.
There are also hundreds of millions of dollars at risk at the state level.
The transportation department received money to help widen Interstate 64 and install a new weather and traffic monitoring system to facilitate emergency evacuations in Hampton Roads. It’s unclear whether those projects will be impacted.
Virginia’s environmental agencies would be particularly affected if the funding freeze continues.
The EPA awarded Virginia Energy $156 million through an IRA-funded program called Solar for All, which is meant to create new or expand existing solar infrastructure in disadvantaged communities, including incentivizing investment by solar businesses and broadening access to power purchase agreements.
Officials nationally and in other recipient states recently said their Solar for All grants were paused until future notice – despite having signed contracts with the federal government.
“We are still in the process of reviewing the recent executive orders to fully understand their implications for our programs,” a Virginia Energy spokesperson said in late January. “We cannot share more at this time, as our team is still monitoring and assessing the situation.”
The department did not respond to a followup request for comment late last week.
The state energy agency has also been working to launch a rebate program for Virginia homeowners and renters to electrify appliances and pay for better insulation and ventilation in order to cut energy waste and bills.
That initiative hinges on receiving nearly $97 million in federal climate funding. Virginia Energy says on its website that the state still has to apply for its allocation of the funding.
“Any delays in federal review and/or transfer of funding will cause delays in program launch,” officials wrote.