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Legislative Newsletter - March 28, 2012

Number 8


            A little time away from Richmond appears to have done some good for state lawmakers trying to reach agreements on a revised budget for the remainder of FY12 and new spending plan for FY13 and FY14. Senate Finance Committee (SFC) members, having had some private huddles last week, approved revised spending plans last Thursday afternoon, which was followed by overwhelming Senate approval of HB 1300 and HB 1301 this past Monday. Senate Democrats, who had held up passage of the budget bills during the final weeks of the General Assembly’s regular session, separated their call for more parity in committee assignments from the budget process, laying the groundwork for approval of the revised spending plans. On Tuesday, the House rejected the Senate plan, setting the stage for senior lawmakers on the House and Senate money committees to negotiate a compromise budget (work that started informally prior to the end of the regular session). Though no timetable is set for this work to be completed, lawmakers are hopeful an accord can be reached in the near future. Members of this budget conference committee appointed yesterday are Senators Stosch (Henrico), Norment (James City), Hanger (Augusta), Watkins (Powhatan) Colgan (Prince William) and Howell (Fairfax), and Delegates Putney (Bedford), Cox (Chesterfield), Sherwood (Frederick), Landes (Augusta), Jones (Suffolk) and Joannou (Portsmouth). Budget conferees are being sent the attached “Budget Conferees” document that highlights important budget items for our region.

            Following are significant changes of interest to the Senate-approved budget from the version previously-endorsed by the SFC:

→From a $65.9 million payment to the state as part of the mortgage service settlement agreement (to help offset losses due to the mortgage lending crisis), the approved plan appropriates $30.5 million in FY13 and $25.4 million in FY14 to provide one-time funding (recognizing adverse impacts of the mortgage crisis on local property tax revenue) to assist with education inflation costs and the Virginia Preschool Initiative. The remaining $10 million from this amount would capitalize a Housing Trust Fund, with 80% of the funds being for a revolving loan fund and 20% for grants for homeless assistance programs.

→It appropriates $22.5 million (state share) each year to assist school divisions with the payment of the increased teacher retirement rates as contained in the introduced budget. Previously, the SFC provided $45 million in FY13 only.

→The governor proposed funding to bring the Aid to Localities reduction down to $50 million in FY13 and $45 million in FY14 (a total of a $25 off the current $120 million). The budget adopted by the SFC last month would have eliminated the local payment for next year; it now proposes to only accept the governor’s proposal. The House proposed an additional $22.5 million each year, to bring the local payments to the state down to $27.5 million in FY13 and $22.5 million in FY14.

→It addresses the approved transportation bills by including language amendments to 1) provide an exemption for those cities, counties and towns that construct and maintain their own streets and roads from the Virginia Department of Transportation (VDOT) review of local comprehensive plans as required by the bills (HB 1248 and SB 639 ) (see more information below); and 2) reestablish the definition of “nonrecurring expenditures” to ensure that only 67% of undesignated, year-end general fund balances (current law) can be assigned to transportation.

→It eliminates $3 million each year for the Machinery and Tools Grant Fund, as SB 549 , which established this mechanism to allow manufacturers to apply for a grant against the amount of local taxes paid, failed to pass in the House.

→It eliminates the introduced budget position establishing an 8% investment return rate, meaning the 7% return rate used by the Virginia Retirement System (VRS) board of trustees would be used to set retirement rates.

→It restores $1.2 million each year for at-risk child daycare services (Department of Social Services budget), which had been reduced nearly $27 million in the introduced budget.


            Governor McDonnell has until Monday, April 9, to act on legislation presented to him by the legislature. His options for addressing legislation are as follows: 1) he can sign the bill; 2) he can veto the bill (return it to the legislature without his signature); and 3) he can propose amendments to the bill. The General Assembly will gather for a one-day reconvened session on Wednesday, April 18, during which it will consider the governor’s actions. Lawmakers can accept or reject proposed amendments by simple majority votes. They can override a gubernatorial veto with a two-thirds vote of the members of both the House and Senate.


            Yesterday, the TJPDC sent a letter to Governor McDonnell outlining locality concerns with SB 497 , which requires local government and school division employees to pay the 5% employee contribution to the VRS, and that localities and school boards offset the increased contributions to be paid by their employees with a corresponding pay increase. The letter requests that the governor propose an amendment to the bill to provide an option for localities to require their employees to pay the 5% member contribution; or in the absence of this first option, to propose an amendment to allow localities the option of delaying the bill’s requirements for a year. The letter notes that a local option provision would allow localities to analyze the budget implications that exist in their locality, and then make a determination that best suits local needs and desires. It also highlighted the difficulties of accommodating this mandate in the midst of tight local and school division budgets being crafted. A copy of the letter is attached.


            The Charlottesville-Albemarle Metropolitan Planning Organization later today will discuss a draft letter to Governor concerning HB 1248 and SB 639 ). The letter outlines concerns with several provisions of the approved bills that would have a negative impact on local governments with the shifting of additional authority to the state. Specifically, these various provisions require VDOT review of local transportation plans for consistency with state plans, and to allow funds to be reallocated if the local plans are not supportive of or consistent with state projects. Other statewide groups, including the Virginia Association of Counties, the Virginia Municipal League and environmental groups also are weighing in with concerns on these same issues.


            The Commission on Local Government is continuing its review of selected state and federal mandates for the current fiscal year. Analysis of the following will get underway April 1:

  1. Appoint Local Emergency Management Director--Each county and city must appoint a director of emergency management and a coordinator of emergency management. All incorporated towns must also appoint a coordinator of emergency management (last assessed in early 2005).
  2. Subdivision Street Development Control--Localities must adopt a subdivision ordinance requiring subdivision streets to meet VDOT standards as prerequisite to the State accepting those streets into the secondary system for maintenance and improvement. The Secondary Street Acceptance Requirements (SSAR) regulations establish requirements that newly constructed streets will need to meet in order to be accepted into the secondary system (last assessed in 2003).
  3. Traffic Signs, Signals, and Markings --Traffic signs, signals and markings placed or erected by local governments or placed by others under authority of the local government, to include placement on private roads open to public traffic, must conform in size, design and color to those erected for the same purpose by VDOT as guided or required by the "Manual on Uniform Traffic Control Devices (MUTCD)." In addition, local governments may elect to place traffic signs, signals and markings in accordance with the provisions of the Virginia supplement to the MUTCD to further improve on uniformity and consistency with state laws (last assessed in 2005).

            Local governments may offer comments on the mandates to the Commission through the Commission’s website here . Comments are requested to be submitted with the first 30 days of the assessment period; state agencies responsible for administering the mandates will have access to all documents provided by local governments and will consider them when preparing their mandate assessments.

            The Virginia Code requires state agencies to conduct an assessment of all mandates imposed on local governments administered by the agency to determine which mandates, if any, may be altered or eliminated. Sixteen mandates are being reviewed during the FY12 assessment period.


            The Virginia Department of Conservation and Recreation (DCR) will be seeking comments from interested parties on the draft Phase II Watershed Implementation Plan (WIP) for the Chesapeake Bay Total Maximum Daily Loads (TMDLs) to address water quality impairments in tidal waters of the Chesapeake Bay. You will recall that the Phase I WIP was approved the Environmental Protection Agency in December, 2010. Phase II addresses local and regional plans that identify local and federal partners, how the State will work with partners to raise awareness about the level of effort necessary to address the Bay TMDL, and what role the partners can play in reducing pollutants at the jurisdictional level. The overall purpose is to initiate a set of actions at the local, state and federal levels that will accomplish the allocation goals identified in the Chesapeake Bay TMDL. Stakeholders in our region that have been discussing the TMDL for the better part of two years will meet in mid-May with state officials to discuss the ramifications of the Phase II WIP and its implementation.

       A copy of the draft Phase II WIP is available here . The public comment period begins April 1 and ends May 31. Comments or questions on the draft can be sent to , and should include the name, address and telephone number of the person submitting such comments.




PHONE: 434-979-7310 x350

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