Legislative Newsletter No. 1 — January 16, 2004

2004 General Assembly Calendar

• January 22 — Deadline for legislators to request budget amendments
  
• January 23 — Final deadline for bill introduction
  
• February 17 — "Crossover" day
  
• February 22 — House and Senate budgets released

All Eyes Are On The Budget And Taxes

Once again, budget discussions will dominate the General Assembly session, as legislators will be challenged by increased costs of services and pressures to generate additional revenues. In his State of the Commonwealth address Wednesday night, Governor Warner targeted most of his remarks at the budget dilemma and addressing it through tax restructuring. Specifically, he highlighted public education, citing the additional 100,000 additional students expected to enroll in our public schools over the next six years, and saying that if the state does not adequately fund its share of public education costs, "it simply passes those costs onto local governments - and that means higher property taxes." In speaking to tax reform, he stated that "doing nothing means the state will continue to pass the buck to local governments who will have to raise property taxes - and that just isn't fair." Finally, the governor said he would not accept a budget that used inflated revenue estimates, endangers the state retirement system or that fails to meet the state's commitment to education.

Meanwhile, House and Senate members have until this coming Thursday to submit their proposed amendments to the introduced spending plan; those proposals then will be available the following week. The House and Senate money committees will have roughly three to four weeks to craft their respective versions of the spending plan by February 22.

Several competing tax restructuring packages are on the table. In addition to the governor's plan (previously highlighted), Delegate Allen Louderback's HB 108 proposes to change the income tax brackets while applying the sales tax to services (and reducing the rate from 4.5% to 4%). Senator Emmett Hanger's SB 530 would increase the sales tax to 5% and apply it to food (with a refundable tax credit of $40/person), increase the cigarette tax to 30 cents/pack statewide while eliminating local tobacco taxes, increase the gas tax by five cents/gallon, eliminate the car tax and increase income tax deductions and revise the tax brackets. Senator John Chichester says his package, unveiled this week but not yet in bill form, would funnel additional funding to the Rainy Day fund, public and higher education, transportation, mental health, water quality and land conservation (from the state recordation tax). His plan would increase the sales tax to 5.5%, revise tax brackets, reduce the age deduction for seniors, hike the gas tax by three cents/gallon, increase the cigarette tax to 35 cents/pack and cap local tobacco taxes at 55 cents/pack. The car tax (first $20,000) would be eliminated, with 1.5 cents of the sales tax dedicated to reimbursing localities under this program.

Legislators have filed nearly 2,200 bills and resolutions so far, with the final filing deadline set for next Friday. Following are just some of the many bills of interest to local governments that have been submitted; more will be highlighted in the next newsletter:

HB 19 and SB 92 are bills to authorize all localities to use photo-redlight monitoring systems, while HB 370 eliminates the current 2005 sunset date on the law.

HB 87, HB 155, HB 366 and HB 895 would prohibit motorist use of mobile infrared transmitters that can change traffic signals.

HB 245, HB 457, HB 504 and SB 214 broaden the use of the $5 courthouse and courtroom security fee to funding all courthouse security, not just security personnel.

HB 278 would allow local ordinances regulating the use of firearms.

HB 293 authorizes tax assessment or collection officials to settle assessment or collection disputes under certain conditions.

HB 298 prohibits localities from denying a permit or license because a person has failed to pay taxes or penalties, if they are under appeal or review.

HB 303 would increase from $100 to $500 the fee localities may seek from a person convicted of certain traffic offenses to reimburse the locality for providing an emergency response.

HB 335 authorizes land use decisions based on current water supply.

HB 385 and SB 140 would cap the rate of real property tax increases.

HB 399 would allow a law-enforcement officer access to records of any inquiry or complaint relating to him that has been closed.

HB 412 would require a referendum for cities and towns to increase the meals tax and limits increases in the lodging tax.

HB 417 requires the local "conditional zoning index" to provide access to all proffered cash payments and expenditures disclosure reports prepared by a locality for the Commission on Local Government.

HB 435 expands current overtime compensation provisions for fire protection employees to law-enforcement employees.

HB 461 revises BPOL tax provisions.

HB 464 allows taxpayers aggrieved by the assessment of any local tax to appeal such assessment to the Tax Commissioner.

HB 473 clarifies language relating to grandfathering of exemptions adopted in 2003 that transfered tax exemption authority to local governments.

HB 483 and HB 530 eliminate pre-1987 ordinances that regulate the use of firearms.

HB 579, HB 588 and HB 589 revise provisions related to transportation of persons under a temporary detention order.

HB 620 limits increases in local CSA costs to 25% over the preceding year's expenditures.

HB 673 provides that only a sheriff can be eligible to be chairman of a regional jail board.

HB 679 allows localities to remove abandoned, nonconforming signs if the property owner cannot be located or if the sign has not been removed within 30 days of notification of nonconformance.

HB 693 creates the Virginia Natural and Historic Resources Fund.

HB 730 requires localities to impose the flat license fees now authorized by current law on all businesses or no businesses, and if such fees are imposed then, in calculating any license tax that is imposed on gross receipts, the locality must deduct from such gross receipts the threshold amount of gross receipts on which it imposes the tax.

HJR 86 establishes a joint subcommittee to study the cost effectiveness of CSA.

SB 110 delays implementation of water supply plan regulations until July 2005.

SB 147 caps real property taxes if a locality levies or increases taxes on cigarettes, admissions, meals or lodging.

SB 228 requires disclosure in certain land use proceedings.

SB 290 prohibits "living wage" ordinances.

SB 301 requires that condemned property not put to public use within 10 years, be first offered for sale to the person who owned it at the time of condemnation.

Of special note are the following bills:

Five bills call for impact fees associated with various governmental services. These bills were introduced so as to have them considered by committees other than the House Counties, Cities and Towns committee, where impact fee bills have routinely been defeated. The bills and the services they address are HB 68 (parks), HB 306 (transportation), HB 307 (education), HB 746 (police/fire/rescue) and HB 747 (water/sewer). HB 729 and HB 748 are adequate public facility ordinance (APFO) and impact fee bills. HB 482 allows localities to assess impact fees for residential development, while HB 752 allows impact fees for road and school facility improvements.

A handful of bills, HB 539, HB 552, SB 101 and SB 252, address various pedestrian and bicycling issues that have been discussed in our region and in other parts of the state. SB 267 authorizes establishment of the Rivanna River Basin Commission.

Also in the mix are bills requested by several of our PDC localities, including the following:

HB 154-tax-exempt provisions for the elderly and disabled (Charlottesville)

SB 152-Nelson County industrial/economic development authority (Nelson)

SB 247-real estate tax credit for permanent easements (Charlottesville)

SB 248-revisions to disability provisions for disabled veterans (Charlottesville)

SB 373-state industrial access road funds (Nelson)

SB 374-admissions tax authorization for all classes of events (Nelson)