Legislative Newsletter - August 28, 2006

Number 16

Transportation Session Details Set

State legislators have agreed on parameters for late September committee meetings and sessions to address the transportation funding issue that is the subject of the legislature’s ongoing special session. Legislators are expected to be in Richmond much of the week of September 25 to take up transportation bills. Committees are expected to meet the first two days of that week, with both chambers scheduled to have floor sessions on Wednesday, September 27. Work would continue for several more days, with adjournment slated for Saturday, September 30.

Governor Tim Kaine spent much of his address to a joint meeting of the General Assembly money committees today emphasizing the work that needs to be done on transportation. He called the transportation issue an “urgent problem,” and reiterated his five basic components of a transportation solution—VDOT reform and privatization efforts; integrating transportation and land use planning; allowing regions some flexibility to address needs; strategic use of the $339 million in state general funds set aside for transportation; and new and sustainable transportation revenues.

Northern Virginia lawmakers in particular are looking at possible remedies to address transportation needs in their area. One delegate has submitted bills to steer more recordation tax and sales tax dollars to the Transportation Trust Fund, as well as to revise the distribution formulas for construction dollars. Another delegate from that area plans to submit legislation to allow a series of fee and tax increases that would be retained and spent in Northern Virginia. Several Senate-approved bills that provide the framework for its transportation plan, have been tabled in the House Finance Committee.

State Budget and Revenue Issues

The governor has briefed the General Assembly money committees on the official end-of-the-fiscal-year (FY06) revenue picture. For the year, revenue growth was 8.4% ahead of last year, fueled by large increases in individual and corporate income tax collections, which grew 22% and 41% respectively in FY06. The governor also highlighted that deposits into the state’s “Rainy Day” fund have reached $1.1 billion. Administration officials noted that revenue growth in taxes targeted for transportation (e.g. motor fuel and motor vehicle sales) was half that of general fund revenue growth in FY06. They also projected costs of materials for transportation projects will increase nearly 8% in FY07, with transportation revenues likely to jump just over 2%.

Also today, the Senate approved, but the House did not, amendments proposed by the governor to the FY07/FY08 state spending plan to correct sales tax revenue estimates in both years of the budget and to provide a supplemental payment of nearly $60 million to local school divisions in the current fiscal year to hold each locality harmless from the loss of revenue due to the adjustment. In other words, under this plan, local school divisions would receive the same amount of state funding they would have received if the original sales tax estimates had been correct. In mid-July, it was discovered that the budget overstated the estimate of sales tax allocated to public education by more than $130 million for FY07. The overstatement resulted from the state’s failure to account for the effect of changing the sales tax rate on food. This supplemental payment, if ultimately approved by the House, will count as a credit toward the local share of SOQ costs for the purposes of calculating required local effort (RLE) for education spending.

The House deferred action until next month, preferring first for its Appropriations Committee to hear a Joint Legislative Audit and Review (JLARC) report on the origin of the tax mistake. Today, committee members grilled JLARC staff and administration officials about the mistake, who was to blame and details of the proposed fix.

Legislature Approves Kaine’s Land Tax Credit Amendments

Also today, the General Assembly overwhelmingly approved amendments proposed by Governor Kaine to a pair of bills that alter current land preservation tax credit provisions. Under HB 5019 and SB 5019, approved by the legislature in June, the credit value is reduced from 50% of easement value to 40%, and the statewide amount of credits is capped at $50 million for CY2007 and $75 million per year thereafter. The Kaine amendments changed the total annual cap on credits to $100 million, adjustable annually for inflation (a provision that some legislators took exception to). The tax credit legislation was a crucial part of final negotiations that resulted in agreement on a new state budget for FY07 and FY08.  The vote to approve the amendments was unanimous in the House and 31-2 in the Senate. The budget, as well as these bills, capped the tax credits to help pay for the costs of eliminating the estate tax for deaths occurring after July 1, 2007. The Kaine administration has set a goal of protecting 400,000 acres of open land in Virginia by 2010. Last week, it released a poll that showed just under 80% of respondents agreeing that the state should spend public funds to prevent the loss of natural areas to development.

Changes to the state’s “Sunshine Law” are being considered

The state panel charged with overseeing compliance with the Freedom of Information Act (FOIA) is discussing several changes in the law’s provisions governing open meetings. The Electronic Meetings subcommittee of the Virginia Freedom of Information Advisory Council met twice recently to consider alterations to the law that last saw a major revision in 1999 (though other changes have been made since that time). Of interest to local governments is a possible change in the definition of a public body to allow certain regional entities to hold electronic meetings. Currently, only state public bodies may hold meetings where public business is discussed or transacted through electronic communication means. Increasingly, some regional entities are finding that the ability to have good attendance by members is hindered by travel times and distances. The subcommittee agreed that making some allowance for these bodies to utilize available technology to conduct business can be done while still protecting the public’s “right to know.”

Specifically, the subcommittee is recommending that regional public bodies which include four or more cities and/or counties or whose territory covers 100 miles in length be allowed to hold electronic meetings in a manner now allowed for state public bodies. Current provisions applicable to state public bodies stipulate that a quorum of the body must be physically assembled at one location, with additional members allowed to participate from a remote site. The panel also suggests decreasing the required notice of any electronic meeting held from seven to three working days in advance of the scheduled meeting date. Another recommendation would allow electronic participation in a meeting by a member of any public body on an emergency basis (limited to a few times/year), without providing remote access to the public, if the public body is properly assembly and agrees to such participation.

Following final review of the specific language of the recommended changes, the subcommittee will forward its suggestions to the full Advisory Council.

Land Conservation Panel Begins Work

The joint subcommittee studying long-term funding for the purchase of development rights to preserve open-space and farmlands held its first meeting last week. The panel was created by HJR 133 and SJR 94 approved by the 2006 General Assembly, and is charged with examining future need for open-space land, the cost of such needs and long-term funding sources to pay the costs.

The subcommittee heard a series of presentations at its initial meeting, including a review of existing state and federal open space programs, state efforts to develop a model PDR program (recall that the current state budget includes just over $300,000 for the Office of Farmland Preservation to assist localities in implementing local PDR programs) and existing state and local tax preferences for preserving open space lands. It was noted that the Virginia Outdoors Foundation has been successful over its 40 year history in placing 1,900 properties under easement. Meanwhile, the Virginia Land Conservation Foundation’s competitive matching grant program for state agencies, local governments and nonprofit agencies, received its highest state appropriation in FY06 at $12.5 million, but only $2.5 million per year in the current state budget (other states, including Maryland, set aside much greater amounts). The subcommittee will hold a worksession on the Eastern Shore in October to continue its deliberations.

Comment Wanted on Traffic Analysis Regulations

A group of local government and environmental stakeholders has been assisting the Virginia Department of Transportation (VDOT) with defining standards for traffic impacts of new development as required by HB 1513 and SB 699, as approved by the 2006 General Assembly’s regular session. The bills, which take effect next July 1, require new regulations as part of an effort to better coordinate state and local transportation planning. Comprehensive plan amendments, rezonings and site plans/subdivision plats must be submitted to VDOT if they substantially affect transportation on state highways.

The proposed regulations, which are expected to be published in the State Register of Regulations on September 18, will require VDOT review of a proposed comprehensive plan amendment if it will generate 2,000 or more additional vehicle trips per day. For rezonings (as well as site plans and plats), the proposed standard is 100 vehicle trips during peak hour or more than 200 per day. For cities and towns that maintain their own streets, if a proposal will generate more than 1,000 vehicle trips daily and is within 3,000 feet of a state highway, VDOT review is required.

VDOT plans to post the proposal on its website and begin accepting comments this Wednesday. VDOT also will hold a public hearing on the draft regulations at its Richmond offices the evening of September 25. TJPDC Executive Director Harrison Rue was part of the VDOT workgroup, and a number (though not all) of his recommendations were accepted.

CSA Study Moves Forward

The Joint Legislative Audit and Review Commission (JLARC) is well into its study of cost issues surrounding the Comprehensive Services Act (CSA), as directed by HJR 60 from this past legislative session. Staff members are conducting a series of 17 site visits to localities across the state where there are differing demographics and caseloads. Surveys of CSA coordinators, caseworkers, residential providers and Community Policy and Management Teams (CPMT) are being conducted as well. Commission staff plans to report on its finding and recommendations in December. A joint subcommittee established by the General Assembly to work in tandem with this study has yet to schedule a meeting.

Board of Education to Hold SOQ Hearings

The Virginia Board of Education (BOE) will hold 10 public hearings in September to receive input on potential changes to the Standards of Quality (SOQ). The Board particularly will be looking at items that require additional state dollars, including the several initiatives it proposed in 2003 that have not been funded.

One of the hearings will be held Monday, September 25 at Monticello High School in Charlottesville. Another is scheduled for Wednesday, September 27 at the Dunbar School of Innovation in Lynchburg. Both hearings begin at 7 p.m. State law requires the BOE to review the SOQ in even number years.

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)