Legislative Newsletter - April 21, 2008

Number 9

General Assembly to Act in Reconvened Session on Wednesday

            The General Assembly will meet Wednesday for its annual reconvened session to consider amendments and vetoes recommended last week by Governor Kaine.

            The governor recommended 41 changes to the two-year state budget, though most are technical in nature. One amendment would provide an additional $1 million to the Virginia Outdoors Foundation to respond to requests for assistance from landowners wishing to put land under conservation easement. Another proposes language to encourage the Virginia Department of Transportation (VDOT) to promote that counties undertake primary and secondary road improvements.

            Amendments to several bills of interest were proposed. Several amendments to the payday lending bills do not change the real substance of the measure that was approved in the session’s final hours. Language is proposed to be added to SB 464 establishing an Energy and Environment Commission, to call for a voluntary greenhouse gas reporting system. SB 596 is proposed to be amended to add language as contained in the Virginia Energy Plan to have a goal of reducing the projected increase in energy use over the next 15 years by 40%.

            Amendments proposed by the governor are agreed to or rejected by a simple majority of the House and Senate. If amendments are rejected, the bill goes back to the governor, who has an additional 30 days to sign or veto the bill. However, if amendments are rejected and the bill in its enrolled (as passed by the General Assembly) form is agreed to by a 2/3 vote of both chambers, then the bill becomes law.

Details Emerge on Reductions in State Aid to Localities

            The state biennial budget for FY09 and FY10 approved by the General Assembly last month includes a $50 million reduction in aid to localities in each of the next two years. The adopted provisions called for the Department of Planning and Budget (DPB), within 30 days, to provide each locality with an estimate of the general fund payments expected to be received from the state. Information from DPB sent to localities earlier this month include a draft listing (expect a final list in early summer) of both the estimated base and the theoretical reduction for selected aid to locality programs to produce the required $50 million savings to the state. Localities then would choose, by August 30, whether to achieve their reductions from a single program, a proportional or percentage reduction across multiple state aid programs, or reimburse the state and forego any reductions. This listing assumes a 3.94% reduction against the base in FY09. For our localities, the range of reductions for the next fiscal year is from just over $91,000 to just under $512,000. Under the theoretical cuts listed, law enforcement and Comprehensive Services Act payments take the biggest hits.

State Budget and Revenues

            Through the first nine months of the current fiscal year, state revenues have grown 2.5% over the same period last year, ahead of the revised 1.2% growth projected for FY08. Though March is not typically a significant month for revenue collections, total revenue for the month grew 3.2% compared to the same month last year, thanks in part to increased income tax collections and fewer tax refunds. Sales taxes are up slightly for the year, but recordation tax collections are stilling declining due to the ongoing downturn in the real estate market. The last three months of the fiscal year, especially April and May, are big collection months. Estimated and final payments from corporations and individuals are due in April and May, while estimated payments are again due in June.

Transportation News

            State lawmakers continue to talk informally about possible transportation remedies that could be the subject of a special legislative session later this spring or summer. They are grappling with how to address a February Virginia Supreme Court decision that voided the revenue-raising powers of non-elected transportation authorities in Northern Virginia and Hampton Roads, as well as declining transportation revenues over the past year. At this point, lawmakers appear far apart on reaching common ground. This past session, the legislature also repealed the so-called abusive driver fees adopted last year, which had been expected to generate $60 million/year for road maintenance. VDOT also will transfer more than $280 million in state construction dollars, plus additional federal funding, to support maintenance activities in the current year, for a total transfer of about $400 million.

            Additionally, Governor Tim Kaine is working on a proposed plan that could be presented to legislators in the coming weeks. It has been reported that his plan would focus on revising the plans for those two regions, replacing the “patchwork” of fines and fees approved last year, and addressing the drain on the transportation trust fund by the ever-increasing maintenance budget.

            Meanwhile, the Commonwealth Transportation Board has begun hearings on a scaled-down six-year transportation program. As previously reported, projected transportation revenues over that period are down over $1 billion dollars, resulting in a 44% reduction in state funding for primary, secondary and urban road construction, as well as a 10% cut for transit. The closest, remaining hearings to our area (both at 6 p.m.) are at the VDOT office in Richmond this coming Wednesday (April 23), and next Wednesday (April 30) at the Rockingham County Administration Center.

Local Governments to Discuss Proffer Bill Follow-up

            Local government representatives are gathering this week during the reconvened session to discuss the next steps in discussions about SB 768, the impact fee/cash proffer bill that was carried over for the year during the recent General Assembly. The meeting will include discussion of tentative plans to establish a local government technical advisory committee to assist and advise the coming talks between a team of local government representatives and the development community, as well as to collect data needed to aid in those discussions. After the House Rules Committee carried the bill over, Speaker of the House William Howell agreed to write a letter to the interested stakeholders asking that they continue their discussions over the particulars of the bill and that localities not amend their cash proffer guidelines during that time. 

Impact Fee Guidebook Available

            A draft “Virginia Impact Fee Guidebook,” produced under contract between the state and Virginia Tech’s Chris Nelson, has been released for review by localities. The 80-page draft guidebook addresses applicability, administration and calculation of road impact fees as authorized during the 2007 General Assembly session. It also includes a sample ordinance to serve as guidance (rather than a model) on how a local impact fee ordinance might be tailored. The guidebook is still under review and likely will be sent out to localities and stakeholder organizations for more comment in the near future.  The guidebook is posted on the website of the Virginia Association of Counties at Impact Fee Guidebook. Questions or comments about the guidebook can be directed to Assistant Secretary of Transportation Nick Donohue at Nick.Donahue@governor.virginia.gov.

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)