Legislative Newsletter - February 20, 2006

Number 5

Calendar for 2006 General Assembly Session

February 23 - Each House to complete work on its budget bill

March 6 - Last day for committee action

March 11 - Scheduled adjournment

BUDGET ISSUES    

The House and Senate money committees on Sunday afternoon released differing versions of the amended 2006-2008 budget. As expected, the sharpest differences between the two are in the transportation funding plans being proposed. Both committees embedded their transportation funding plans (discussed in the last newsletter) into their version of the budget.

The House plan uses about $600 million in general funds for one-time projects, while the Senate uses just shy of $370 million. The House also relies more heavily on debt to provide funding and dedicates one-third of all state insurance premium tax revenues to transportation ($146.7 million a year). In all, the plan provides more than $2 billion between FY07 and FY10, and an additional $400 million annually beginning in FY09.

The Senate plan provides $4 billion from FY07 to FY10 (just over $1 billion/year). The Senate plan is driven by the recommendations of the START panel that met during the fall, and whose goal was to preserve general funds for existing core services such as education and public safety, while dedicating a continuing stream of new, reliable non-general fund revenue to transportation.

Last week, Secretary of Finance Jody Wagner told lawmakers that increased revenue through January of the current fiscal year had pushed year-to-date collections ahead of last year’s by 11.2%. Growth for the month of January alone was 10.5%. This adds another $163 million to the revenue forecast, with $124 million of that occurring in the current fiscal year and the remaining $39 million in the next biennium. This is on top of the $53 million added in January as a result of higher than expected corporate income taxes. Secretary Wagner also cautioned that the impacts of the federal budget, further housing market corrections, the energy market and federal monetary policy changes could have an impact on state revenues as we move into the next biennium.

Following is information on some of the budget amendment items of interest to local governments proposed by the money committees. More specifics will be available on Tuesday when details of all amendments are released; budget briefings for legislators will be held on Wednesday, with floor votes on the competing plans set for Thursday. Please look for more ongoing details on the two proposed budgets from VACo and VML:

HOUSE—

· Adds $50 million to maintain 70% car tax reimbursement

· Provides $2.6 million for additional sheriff’s deputies to meet the state staffing requirements (Fluvanna and Greene would be slated to receive additional personnel)

· Proposes $15.8 million to increase the retired teacher health care credit payment from $2.50/month to $4.00/month for every year of service, and removes the cap on years of service. This also would cost localities more than $20 million.

· Increases workforce services training grants by $250,000 each year

· Reduces funding for broadband feasibility and access by $3.2 million

· Reduces proposed increases in funding for court clerks, treasurers and commissioners of revenue

· Eliminates $1.1 million for additional solid waste oversight and $416,000 for groundwater programs

· Reduces by $6.6 million the early childhood grant program proposed in the introduced budget to provide grants, training, and technical assistance to communities to improve access to early childhood services and programs

· Replaces $1 million in general funds with federal funds for community action agencies

· Provides $50,000 for Charlottesville Area Dental Access; $25,000 for the Nelson County Rural Health Outreach Program; $50,000 for the Paramount Theater; $25,000 for the Louisa County Historical Society; $50,000 for the Louisa Town Hall and Art Center

SENATE—

· Endorses an additional $3 million amendment by Governor Kaine (on top of the introduced budget) for HB 599 funding, and also recommends his proposed study of HB 599 funding allocations. The introduced budget proposed increases of $11.5 million in FY07 and $22.2 million in FY08.

· Provides $750,000 each year for start-up funding to localities to create innovative, community-based CSA services

· Provides an additional $1 million over the two years for home-delivered meals to the elderly

· Increases funding for community action agencies by $600,000 each year

· Proposes $1 million each year to expand community-based programs serving those with mental illnesses who have been released or are being released from jails

· Provides $300,000 for the electronic voting machine pilot program per SB 272

· Provides $18.6 million the first year and $20.6 million the second year for the enhanced LEOS provisions contained in SB 393 (see below).

· Provides a $3 million increase in support to local libraries

· Includes $2.3 million over the two years for Purchase of Development Rights programs, $25 million for the Virginia Land Conservation Fund and $10 million for brownfield restoration

· Adds $200,000 in the first year for development of a broadband network along Rt. 29

· Reduces by $5.6 million the early childhood grant program proposed in the introduced budget

· Revises the teacher retirement contribution rate from 9.2% to 9.58%, which will cost the state and local governments more, but will improve the funded status of the system

· Increases per capita funding for PDC’s by $500,000 each year

· Provides $50,000 to the Louisa Town Hall and Art Center; $3,000 to the Scottsville Veterans Memorial; $10,000 to the Paramount Theater and $10,000 to the Town of Mineral

Both sets of amendments provide additional funding for the 3% salary increases contained in the introduced budget for FY07. The Senate proposes a 4% increase in the first year and 3% in the second year for state and state-supported local employees.  Teachers would get a 4% payraise in the first year only. The House proposes a 4% increase for state and state-supported local employees in FY07 and 3% for teachers. It also sets aside $41 million for a 2% payhike for state and state-supported local employees in FY08, with hopes to increase that amount during next year’s session. Both bills also propose to increase the state mileage reimbursement rate to the amount allowed by the Internal Revenue Service (44.5 cents). The Senate includes $500,000 for planning for replacement of the General Assembly Building, a project expected to ultimately cost $180 million.

LEGISLATION        

Last week on the floor of the House, delegates approved HB 704 on a 69-31 vote. This bill prohibits ordinances governing discharge of firearms from being more restrictive than local hunting laws. As written, the bill would require that signs be erected designating the boundaries of areas where hunting and firearms discharge is prohibited. The bill was assigned to the Senate Local Government Committee, were it could be heard on Tuesday; localities are working to defeat the bill or to have it carried over for the year. HB 1537, assigned to Senate Courts of Justice, provides that upon condemnation of a sport shooting range, the condemnor shall provide another location within a reasonable distance and provide for the total replacement of land and facilities.

The Senate has approved SB 393 which would extend Law Enforcement Officers retirement benefits (LEOs) to deputy sheriffs where coverage is not currently extended by the locality. The bill also raises the retirement multiplier from 1.7% to 2.2% of average final compensation to determine retirement benefits for sheriffs, and would allow localities that already extend LEOs coverage to deputies and other police and firefighters to make that adjustment for those employees, at their own expense. The bill increases fines for various driving offenses to raise money for the state costs of this initiative. However, the state would only cover costs for Compensation Board positions and not for those employed at local expense. The House proposes to use the same “abusive driver” fees for its transportation package. The Senate bill will be in the House Appropriations Committee.

Senate Local Government also was assigned HB 1435, which would allow on farm wineries, without being subject to local land use regulation, activities that promote Virginia wine, even if the activity is inconsistent with an agricultural zone. Proponents of the measure are heavily lobbying senators to support the bill, while localities argue the bill strips away authority needed to effectively monitor and review such events.

The House and Senate have different versions of bills dealing with recreational programs operated by local governments. The Senate version, SB 257, would exempt such programs from licensure, but they would have to adhere to local safety and supervisory standards. HB 32 as passed by the House would have exempted local government and private programs, with local standards to also apply to the private programs. That bill was conformed to the Senate version in Senate committee on Friday.

Other action on legislation of interest includes the following:

HB 92 As approved by the House, this bill changes the name of the Virginia Housing Partnership Trust Fund to the Virginia Housing Trust Fund, and provides that half of the annual recordation taxes collected by the state be transferred to the fund. The bill authorizes grants for innovative housing projects and stipulates that some of the proceeds be used to provide matching funds to localities that have established and provided dollars to a local housing fund. A companion Senate bill was defeated earlier in the session.

HB 94 The eminent domain bill endorsed by the Housing Commission and crafted by interested stakeholders, was drastically changed on the House floor last week to severely restrict condemnation authority for state and local governments. The amendment goes far beyond the perceived problems arising from the Kelo decision. The Senate version of the bill, SB 394, contains the language that had been endorsed by local governments, developers and many property rights advocates.

HB 1150 The bill requires development a clean-up plan for the Chesapeake Bay and other impaired waters, to include a plan for disbursing funds for point and nonpoint pollution projects and an analysis of alternative funding mechanisms. The bill is in Senate Agriculture.

SB 262 This bill establishes a statewide energy policy, provisions of which stipulate that decisions about the siting of wind farms is made without sufficient coordination with local land use plans. The bill does require the State Corporation Commission to consider the facility’s fit with the comprehensive plan. A corresponding House version died last week.

The House and Senate have staked out different territory on the existing land preservation tax credit program. The House unanimously approved HB 450, which removes the $100,000 annual credit limit for qualified donations of conservation easements. The Senate approved SB 93 on a 23-14 vote, which provides an aggregate limit of $600,000, or half of the fair market value in tax credit for each parcel of land so donated.

The major transportation/land use planning bills approved by each chamber have been assigned to either House Counties, Cities and Towns or Senate Local Government. Those House bills assigned to the Senate committee will not be taken up when it meets Tuesday afternoon. The Senate bills are on the docket for a Counties, Cities and Towns subcommittee on Wednesday morning.

General Assembly Contact Numbers for David Blount, TJPDC Legislative Liaison

804-644-3702 (phone)

804-783-8226 (fax)

979-7310 x350 (Charlottesville voicemail)

(Richmond email)