Legislative Newsletter - December 19, 2007

Number 15

2008 General Assembly Calendar

January 9                     2008 General Assembly convenes; bill pre-filing ends

January 17                   Deadline for submission of budget amendments in House and Senate

January 18                   All bills and resolutions to be submitted

February 12                 “Crossover” day of bills

State Budget

            Governor Kaine submitted his proposed 2008-2010 state budget to the General Assembly money committees on Monday. Lawmakers now have their say in shaping the spending plan, with a compromise budget produced by House and Senate leaders due the first week in March. The Kaine proposal carries forward into the next biennium nearly all the reductions made in October to address the FY08 budget gap. His plan projects growth in state revenues to be about 3.3 percent for the remainder of FY08 and for FY09, and about 6.7 percent in FY10. About 90 percent of the new expenditures are targeted for existing services. The budget proposes a $261 million dollar withdrawal in the current (FY08) fiscal year from the state’s so-called “Rainy Day” fund to help close the budget gap, a move to which legislators have expressed strong opposition. It also proposes a $10 increase in the driver’s license renewal fee (paid once every five years); the governor also intends to propose legislation to change the vehicle inspection requirement from annually to once every two years, and increase the fee from $15 to $20.

            In the health and human services arena, nearly $159 million in additional general funds are proposed for reimbursement to localities under the Comprehensive Services Act (the top priority in the TJPD Legislative Program), for an expected annual growth of 10 percent and anticipated increases due to policy changes made this past year in the foster care area. No changes are made to the amounts or manner of funding for CSA administrative costs. Just over $275,000 is provided for purchase and maintenance of a data tool for the Office of Comprehensive Services to tract outcome data for children served through CSA. The budget also changes match rates for residential and community-based services, to increase state payment (in other words, reduce the local match rate by 50% in FY09) to localities for services provided in community settings, and decrease payment (increase local match by 24% in FY09) for services provided in residential settings.

Funding is funneled to community services boards (CSBs) as follows:

• $4.5 million is proposed over the two years for CSBs to increase the number of outpatient clinicians and therapists (one per CSB).
• $14.6 million is provided for emergency and mental health services, with a target of $50,000 per CSB for psychiatric consultation, $70,000 per CSB for emergency clinicians and the addition of 36 crisis stabilization beds.
• Nearly $9 million is targeted for increasing the number of case managers for mental health services at CSBs, while nearly $6 million is proposed for funding 40 clinicians specializing in children’s mental health.
• Budget language provides for utilization reviews and prior authorization for community-based mental services, and four positions are created to develop core standards and service improvement plans for services provided through CSBs.

            The spending proposal increases the maintenance payments made to foster families by 25% over the two years, provides additional money ($7 million) to recruit and retain foster parents, and proposes nearly $24 million to offset the loss of federal revenue to support local social services efforts on behalf of children. It increases funding by $17 million over the two years for at-risk child care subsidies and Head Start wrap-around care. The added support will address about a quarter of the current waiting list for child care subsidies and provide Head Start parents with extended-day child care.

            About $600,000 is provided for a training program to enable law enforcement to respond to crisis situations involving people with mental illness. The budget adds 75 mental retardation waiver slots each year for individuals waiting for services on the urgent waiting list.

            Under the governor’s plan, public education funding is increased by over $1 billion, the overwhelming majority ($890 million) of which is targeted for updating state education costs through the biennial rebenchmarking process. State funding for categorical and incentive programs also are increased due to cost calculation updating. The budget also anticipates an additional $34 million in lottery proceeds over the biennium and $45 million more in sales tax , part of which are shared with school divisions. State funding for teacher retirement and group life insurance decrease due to changes in rates, though the budget continues to grab Literary Fund dollars ($30 million over the two years) to help pay state costs for teacher retirement. 

            The budget proposes expanding the Virginia Preschool Initiative to serve an additional 7,000 children; the proposal increases the maximum per pupil amount, caps the local match at 50% and requires more cooperation with private providers in creating preschool slots.

            The budget provides the state share of a three percent pay raise for public school employees, with an additional one-half percent targeted for teachers and other instructional personnel, effective in the second year (July 1, 2009). This effective date would alter a long-standing practice of having state dollars for school employee pay raises made available during the middle of the fiscal (and school) year. Other amendments propose the following:

• Proposes $2 million for the Virginia Early Childhood Foundation (VECF) to provide grants for communities to develop school readiness councils to address the comprehensive needs of children from birth to school entry.
• Adds $4.6 million to implement a voluntary quality rating and improvement system (QRIS) to assess, rate, and support improvement in the quality of early childhood education programs.
• Provides second year funding of $2.1 million to fund data coordinators in the 54 high schools currently not fully accredited by the state.

            In transportation, the budget moves general fund appropriations (from the 2007 transportation initiative) of $180 million from FY07 and FY08 to FY10. The current, two-year state budget transfers $500 million (of which this $180 million is part) in general funds to transportation. The budget also designates $15 million each year for the revenue sharing program. Other recommendations:

• Transfers existing Mass Transit Trust Fund revenues, prior to formula disbursement, to provide state matching funds for the Federal Transit Administration's “New Freedom” Program, which will fund initiatives to improve the mobility for the elderly and disabled.
• Budget language would authorize 1) the Department of Rail and Public Transportation to study the use of Rail Enhancement Fund revenues for the costs of contracting with Amtrak for passenger rail services between Richmond and Washington, D.C., and 2) the Commonwealth Transportation Board to require that local funding provided to transit be maintained in FY09 and beyond, preventing localities from using state funds to offset local investments in transit.

            In public safety, the budget proposes an additional $6 million over the two years for localities that include their sheriffs' deputies and regional jail correctional officers in the Law Enforcement Officers Retirement System (LEOS). The 2007 General Assembly approved legislation to require that deputy sheriffs become members of LEOs, effective July 1, 2008. HB 599 funding to localities with police departments is funded at the same levels for FY09 and FY10 as the (October) adjusted FY08 amount.

            The budget proposal increases jail per diem funding to localities by nearly $30 million over the two years. The adjustment reflects actual inmate population counts through the first quarter FY08 and establishes the base for the next biennium. It proposes to remove language that provides an exemption from overhead cost recovery for four jails, including the Central Virginia Regional Jail, as a result of housing federal prisoners. The language exempted jails where federal capital costs exceed the state’s capital contribution from state-funded personnel cost recovery. This action would save the state $5.6 million. It also provides an additional $400,000 in payments in lieu of taxes to localities housing state prison sites.

            The proposal also projects a four percent ($8.4 million) increase in the "$4 for Life" Fund to support the provision of training and education of EMS personnel and purchase of equipment and supplies and to support local government operations.

            The budget transfers the Emergency-911 program from the Virginia Information Technology Authority to the Department of Emergency Management, and the State Fire Marshall’s office from the Department of Housing and Community Development to the Department of Fire Programs.

            On the environment front, the budget provides an additional $20 million in general funds, WQIF reserve funds and interest earnings for matching grants for controlling nonpoint source pollution and provides $4.8 million in general and non-general funds to increase the state match funding for available federal grants to provide low-interest loans for localities undertaking wastewater treatment plant upgrades. A condition of the federal grants is that the state provide one dollar for every five dollars in federal funding. Additional budget recommendations:

• Provides $3 million each year for matching grants for local purchase of development rights programs, and proposes non-general funding of $50 million over the biennium to conserve land and meet Virginia's land conservation goals by 2010.
• Proposes $2 million in general funds for the Dam Safety, Flood Prevention, and Protection Assistance Fund for loans and grants to owners to repair and upgrade dams to meet state requirements.
• Proposes 10 new positions to be located in regional offices to conduct site inspections and reviews and provide technical assistance to implement the statewide stormwater program.
• Designates $1 million in federal funding for a new boating and fishing access point to Lake Anna in Louisa County.
• The proposal provides about $375,000 to begin an Integrated Flood Observing and Warning System (IFLOWS) equipment replacement program for the 375 locations.
• Other Items of Interest:
• The proposal provides nearly $30 million in the second year for a three percent pay hike for state-supported local employees, effective July 1, 2009. State-supported local employees include constitutional officers, local social services employees, local election board employees, local health employees, local juvenile justice workers and CSB employees.
• Removes about $8 million each year in funds for cities and counties from the distribution of
• alcoholic beverage control and wine profits; profits will be distributed to towns only.
• The budget moves $1 million designated for studying the best routes for rural broadband to provide financing to assist communities in connecting broadband infrastructure.
• Provides $1.6 million each year for an increase in reimbursements to localities for Constitutional Officer retirement, based in part on a changed state employee retirement rate.
• Funds PDCs at $85,500, continuing the five percent (October) funding reduction.

            The General Assembly money committees again will hold public hearings on the proposed spending plan, on January 3, 2008, in Fairfax, Norfolk, Rustburg and Richlands.  A final hearing occurs January 14 at 1 p.m. in the General Assembly Building in Richmond.

CSA Recommendations Endorsed by Study Committee

            The Joint Subcommittee Studying the Comprehensive Act (CSA) endorsed numerous recommendations when it met two weeks ago for the final time this year. The panel approved a group of proposals to enhance case management, including screening, assessment and plan of care development/implementation/follow-up. A recommendation to provide additional CSA administrative funding to localities was supported (TJPD priority). The $2.5 million recommendation mirrors that proposed in the December 2006 Joint Legislative Audit and Review Commission (JLARC) report on CSA, to provide funds for each locality to employ a CSA coordinator. Finally, a group of recommendations to improve data collection was endorsed. This would include child-level data, cost of services data and information on residential providers (TJPD priority).       

Volunteer Incentives Proposed

            At its final meeting of the interim, the legislative committee studying incentives for volunteer fire and rescue squad members recommended a 25 cent increase in the “$4-for-Life” program, which is a surcharge motor vehicle registration fees. The increase would generate about $1.4 million to pay for costs associated with certification and recertification training of emergency medical services personnel. The committee also agreed to support a $125,000 per year budget amendment ($250,000 for the biennium) to fund state contributions to the Volunteer Services Award Program (VOLSAPS). VOLSAPS was established in the late 1990’s, but has yet to be funded by the state beyond costs to administer the program. Local governments, individuals and the state can make contributions to the program for volunteer fire and rescue personnel. The General Assembly approved HJR 743 this past session to establish this joint subcommittee to study incentives for fire and rescue squad volunteers in an effort to recruit and retain them.

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)