Legislative Newsletter - August 26, 2009

Number 12

FY10 Budget Gap at $1.5 Billion; Governor to Announce Cuts Soon
     A continuing decline in state revenue collections is driving a gap in the current fiscal year state budget to an estimated $1.5 billion. Governor Tim Kaine delivered that somber news to members of the General Assembly money committees last week. For the remainder of the fiscal year that runs through June 30, 2010, state revenues are anticipated to decline an additional 1.6%, or about $1.2 billion. This, coupled with a $300 million FY09 shortfall that was closed with cash from the current fiscal year, produces the $1.5 billion gap.  The FY10 revenue decline would be the first time in modern records that state general fund revenues are projected to decline for two years in a row.
 The governor stated that the gap will be closed by reducing expenses, reprogramming unexpended balances, withdrawing reserve funds and using federal stimulus funds, among others. His office is reviewing reductions plans of five, 10 and 15 percent submitted by state agencies in July, and it is anticipated that the governor will announce FY10 spending reductions in early September.
     The gloomy budget outlook likely will extend into 2011 and 2012 as well and that spells bad news for state aid to localities. Though state revenue projections at this point are for modest growth of 3.8% in FY11 and 5.3% in FY12 (above the FY10 revenues), states usually lag behind the nation in recovering from economic downturns. In addition, spending pressures on the state will continue to mount, especially in the health and human services area. Most cash and revenue flexibility measures already have been used by the legislature to balance the current budget. Stimulus funding that helped offset some budget reductions this past session again will be used in the FY11 budget, but will not be available in FY12.
During the upcoming General Assembly session that begins in January, legislators will craft the state budget for 2011 and 2012.   

Alternative Sewage Systems Discussions Continuing
     Legislation approved this past General Assembly session required the Board of Health to promulgate emergency regulations to establish performance requirements and horizontal setbacks for alternative onsite sewage systems that are necessary to protect public health and the environment. The regulations also must include operation and maintenance requirements for such systems. The Department of Health has been holding stakeholder meetings to craft the regulations. It is expected that the consensus recommendations of the group, along with advice from the Sewage Handling and Disposal Advisory Committee, will form the basis of the emergency (must take effect by April 2010) regulations, which likely then will shape the final performance and operation and maintenance requirements.
     Concerning operations and maintenance, some of the key points being discussed include the need for frequent monitoring, with maintenance as needed, and having twice-a-year inspections, which also would refresh homeowner knowledge of the system. There also has been talk that there should be regulatory agency oversight combined with private inspections and that a key to successful systems is an education component for homeowners. The group also has been discussing horizontal setback distances of these systems from property lines or certain resources.
A final report is expected from the group in the coming weeks, with the report and emergency regulations then to go before the Board of Health in mid-October. The draft regulations then would be subject to a 30-day public comment period.

Land Use Workgroups Consider Density Provisions
     A pair of work groups of the Joint Subcommittee Studying Development and Land Use Tools met in late July to continue discussion of possible amendments to the current statute that requires many counties (all but Nelson in our region) to designate urban development areas (UDAs) in their comprehensive plans. The work groups heard presentations from various constituency groups on how to improve the existing law. Talks about the UDA law in previous meetings this summer have centered on the current minimum residential and commercial density requirement for UDAs (four dwelling units per gross acre for residential and 0.4 floor area ratio per gross acre for commercial). Discussion has included whether to keep or alter the current prescriptive standard or to consider a performance-based requirement, and now it appears there is not even understanding in the group on whether the standard should be changed from gross to net acres, or if the standard represents an average over the entire UDA or applying to all of the area. It is believed that very few mixed use developments presently underway in counties meet the current requirements.
     The meeting produced no solutions and many areas of disagreement. Another meeting of the Joint Subcommittee has not been scheduled at this time.

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)