Legislative Newsletter - February 12, 2010

Number 4

Calendar for 2010 General Assembly Session

February 16     “Crossover” day of bills
February 21     House and Senate versions of the budget released

Budget News

Budget writers in the House are looking to address a more than $4 billion budget gap by cutting deeper into state agency programs, requiring state workers to pay into their retirement and using additional federal dollars, according to various media reports this past week. The VRS changes are envisioned as generating greater savings 20 to 30 years out, though some near-term cost reductions also are expected. HB 1189 is the legislative vehicle for this approved by House Appropriations. It modifies the VRS defined benefit retirement programs for new employees to, among other things, require employee contributions, reduce cost of living adjustments, reduce the average final compensation multiplier by .05 percent and change unreduced retirement to a “rule of 90” (combination of age and years of service). House members also are reported to be considering additional federal dollars to help states cover a share of Medicaid dollars. Meanwhile, the picture appears less clear in the Senate Finance Committee as to the direction its budget will take. One scenario discussed this past week calls for $720 million more in public education cuts, $480 million more in health and human services cuts, and another $150 million in cuts for higher education. Significant reductions in employee benefits also could be on the table. House and Senate versions of the budget are due to be released on Sunday, February 21.

Early this past week, Governor McDonnell indicated his support for having scheduled changes to the school funding formula move forward. The introduced budget submitted by Tim Kaine in his waning days as governor delayed the update of the local composite index (LCI) until FY 2012. If the House and Senate agree to undo the Kaine proposal, then the LCI for nearly 100 localities will increase as originally planned, including five of the six localities in our region, who will receive less state funding as follows:

Albemarle                    $5.2 million

Charlottesville             $1.25 million

Fluvanna                     $433,000

Greene                         $580,000

Nelson                         $25,000

Proceeding with the LCI update will cost the state about $29 million in 2011. Governor McDonnell recommended that part of that amount be funded by yet another transfer of balances from the Literary Fund (in this case, about $13 million of the total).

For a few days this past week, it looked as if future state budgets could be developed on a different timeline. The Senate Finance Committee approved SB 102, which provided that biennial appropriations start on July 1 of odd-numbered years, beginning with July 1, 2001. The current process results in an outgoing governor submitting a proposed two-year budget just weeks before leaving office, providing the incoming governor with limited opportunity to shape the budget in his first two years in office. However, when the bill reached the Senate floor, it was recommitted to the Finance Committee on a 21 to 19 vote and carried over for the year.

LEGISLATION

            The House Finance Committee has approved HB 613 on an 18 to 4 vote. This bill would phase-out the machinery and tools (M & T) tax by reclassifying M & T used in manufacturing, mining, water well drilling, processing or reprocessing, and television broadcasting as intangible personal property exempt from state and local taxation. Localities collected more than $200 million from these taxes in the most recent reporting year, so abolition of this important revenue source would greatly harm many localities, including several in our region that would stand to lose several hundred thousands of dollars/year.

            A final Senate vote is expected soon on SB 329, which will raise additional funds for sheriff's departments and clerks offices by increasing court fees for civil actions. Amendments to the bill reduced the proposed increases to yield $11 million, rather than $55 million.

            In the area of land use, and in somewhat of a surprise, the Senate Local Government Committee discussed and approved SB 420 this past week, which makes changes to the UDA enabling statutes. The bill looks a lot like the most recent draft that was before the Land Use Study Committee, which declined to endorse the bill when it met in early January. Following continuing negotiation with the patron of the House version (HB 1071) it was reported from committee on Friday with changes that establish two tiers, one for localities below 100,000 population (densities would remain at the current 4/0.4) and one for those above 100,000 population (8/0.8), and that in include a grandfather clause for those that have already certified compliance with the current UDA provisions.

HB 1307 that would allow a homeowner to install a temporary cottage-type building in the back yard where a family member would live while receiving health care was reported by House Counties, Cities and Towns, but only after being heavily amended to accommodate the concerns expressed by localities.

SB 640, which would have required that any cash proffer policy or guideline be adopted by ordinance has been stricken from the docket and will not be considered this year.

HB 1250 would make zoning administrator decisions in certain cases a significant affirmative governmental act for purposes of determining vested rights. The bill, submitted at the request of the Homebuilders Association of Virginia, was approved by the House. The property/owner/developer would still be subject to the same investment and pursuit requirements that apply to other vested rights determinations.

In other areas, HB 236 eliminates the ability of localities to prohibit shooting within one half mile of a subdivision. It was reported from the House Militia, Police and Public Safety Committee with only one no vote. HB 350 grants all locaities the power to prohibit and/or regulate the distribution of handbills, solicitation of contributions, and sale of merchandise and services on highways, roadways and medians within their boundaries. In the past, a handful of localities (including Albemarle and Greene Counties) had sought and received permission to regulate such activities to varying degrees. It is on the House floor for final approval.

General Assembly Contact Numbers for David Blount, TJPD Legislative Liaison

PHONE: 434-979-7310 x350
EMAIL: dblount@tjpdc.org (preferred) or dblount64@hotmail.com (alternate)