Legislative Newsletter - June 24, 2009

Number 10

State Revenues Continue to Sag

    In May, total state general fund revenues fell 15.6% compared to May, 2008. Most of the decline was due to a drop in collections of most major sources, along with a continuing surge in individual tax refunds. On a year-to-date basis, revenues are off 9.3%, trailing the revised annual forecast of a 7.3% decline. The 9.3% drop in revenue collections through May represents the largest drop on record in the state. Total revenues would have to increase over 10% in June to reach the annual estimate. Secretary of Finance Richard Brown recently told state budget writers to expect a $300 million shortfall in state revenues by the time FY09 wraps up next week. Governor Tim Kaine will present a reforecast of general fund revenues at an August 19th meeting of the joint money committees.
The FY09 shortfall and further slowing of revenue collections means not only FY10 budget cuts, but also makes state budgeting for the FY11 and FY12 fiscal years (to be done in the 2010 legislative session) even more difficult. Some analysts already are predicting that the lower revenue base for FY11 and FY12, coupled with the loss of federal stimulus funding in the next two-year state budget, and Medicaid, education rebenchmarking and other cost pressures, could push the gap between state revenues and expenditures to more than $2 billion in the next biennium. Shared state/local programs, such as public education and other local aid programs, are likely to be reduced.

Stormwater Regulations Released for Comment

    Proposed stormwater management regulations were released this week for a two-month public comment period. The Virginia Soil and Water Conservation Board is proposing a comprehensive revision of regulations regarding the control and treatment of stormwater runoff from land development activities. Activity subject to the regulation includes land disturbances of an acre or more outside Chesapeake Bay Preservation Act areas. The regulations propose to 1) amend the technical criteria applicable to discharges from  construction activities; 2) establish minimum criteria for locally-administered stormwater management programs; and 3) establish a statewide fee schedule for stormwater management. The proposed technical criteria are based on estimates of nutrient reductions needed to achieve levels called for in the Chesapeake Bay tributary strategies; the standards also have the potential to greatly increase land development costs. Localities that fall under the requirements of the Chesapeake Bay Preservation Act and localities with Municipal Separate Storm Sewer System (MS4) permits will be required to adopt stormwater programs. It preliminarily is estimated that state and local government costs to administer stormwater programs under this proposal would increase by $13 to $17 million, with permit fees to generate much of that amount.
Five public hearings on the proposed regulations have been scheduled. They include a July 1 hearing at the Augusta County Government Center in Verona, and a July 14 hearing at the General Assembly Building in Richmond. Both begin at 7 p.m. Public comment to the Department of Conservation and Recreation will be accepted through August 21. You are encouraged to make your sentiments known. Pursuant to legislation approved by the General Assembly this past session, the regulations cannot take effect prior to July 1, 2010.

Land Use Study Committee Tackles Proposed Impact Fee, UDA Bills

    The joint subcommittee studying development and land use tools held its first meeting since the General Assembly last week, and discussed drafts of two bills prepared by legislative staff. One would replace cash proffers with impact fees for roads, schools and public safety facilities. The draft did not place a statutory cap on impact fees, as advocated by the development community, but instead required the Commission on Local Government to develop a model impact fee ordinance using a formula approach. After discussion in a workgroup and the full study committee, it was felt that the impact fee bill draft should be rejected and that new legislation be drafted from scratch. At the suggestion of local planners at the meeting, it was agreed that consultants who have worked with local governments and developers elsewhere to draft impact fee legislation will meet with the study committee at its next meeting, which tentatively is scheduled for August 19.

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)