Saturday, April 16, 2011

State Payments to Virginia Nonprofits Frozen

In late January, the Attorney General of Virginia, Ken Cuccinelli II, issued an opinion stating that the Virginia Constitution forbid the state from making payments to "any charitable institution not owned or controlled by the Commonwealth."  The immediate cause for the opinion letter were several requests for funding before the legislature.  See the January 28 Washington Post article here.  The larger impact of the opinion is now appearing.  See today's Washington Post article here.  After the opinion was issued the Governor's office began a review of nonprofit groups that received state funding.  Because the initial review determined that at least 100 nonprofits could be affected, the Governor's office asked agencies to work with the Attorney General's office to determine whether payments were constitutional.  The state froze payments to a number of nonprofits that had received funding from the state for years.  These nonprofits provide health care services to the needy, serve as food banks, and work to prevent child abuse, among other things.  

Yesterday, the Attorney General's office announced that after its review of the Department of Health, a number of grants were found to be unconstitutional.  These include grants to groups that provide services for some of the state's neediest residents.  The names of the groups will be released next week, after officials deliver the news.

One work-around is to have state agencies contract with providers rather than making direct grants to providers.  That approach will not work in every situation but may help in some cases.

The Attorney General's opinion is just that - an opinion - but it certainly carries a lot of weight.

sng

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