Please Support VACo Priority Budget Amendments

Based on discussions with members while developing VACo’s legislative program, VACo worked with legislators and partner organizations again this session to introduce a package of budget amendments that support local government priorities.  Budget proposals are being considered by the House Appropriations and Senate Finance and Appropriations Committees, and both Committees are scheduled to report their respective budgets on Sunday, February 5.

VACo is grateful to the patrons of these budget amendments for their efforts to ensure that county priorities are under consideration as the budget process moves forward.  A list of VACo’s requested amendments, many of which are joint efforts with the Virginia Municipal League, Virginia First Cities, and other partner organizations, is provided below.

VACo thanks members for their advocacy for these requests.  Your efforts are appreciated!  If you have not already done so, please thank the patrons of these amendments and encourage your legislators to support these proposals, particularly if your General Assembly members serve on the House Appropriations Committee or the Senate Finance and Appropriations Committee.

Elimination of cap on recognition of K-12 support positions
Item 137 #8h (Davis), Item 137 #31h (Bourne), Item 137 #34h (Avoli), and Item 137 #5s (McClellan) provide additional funding for K-12 support positions. Since 2009, the state has arbitrarily capped its support for these positions at a ratio that does not reflect local prevailing practice.  Though significant progress has recently been made in restoring funding to pre-2009 levels, approximately $270 million is still needed to make localities whole.  These amendments provide additional funding or fully eliminate the cap.

KEY POINTS

• Support positions are currently arbitrarily capped at a ratio that does not reflect the need for these positions or the local prevailing practice.
• Support staff (such as school psychologists, school social workers, and licensed health and behavioral positions, cafeteria workers, IT professionals, administrative personnel, custodial staff, etc.) have decreased since 2009, even as the number of students has risen statewide. This means less support for more students.
• Many of these positions are geared to support mental health and student wellness and allow for students to have the support needed to achieve successful educational outcomes. The number of economically disadvantaged students, English Learners, and students with certain disabilities has increased disproportionately to general student population, and so have their needs.
• Furthermore, adjusted for inflation, state direct aid for public schools has fallen by 3.4 percent since 2009. Local governments have taken on this share of the funding burden, investing more than $4.2 billion beyond what they are required to do so to support K-12 education, yet many localities struggle to raise sufficient revenue to meet the growing needs of students and communities.

Instructional aides
Item 137 #27h (McQuinn)/Item 137 #30h (Maldonado)/Item 137 #10s (Norment)/Item 137 # 11s (McClellan) provide $38.6 million GF in FY 2024 for the state’s share of funding for instructional aides. Currently, instructional aides are only funded for kindergarten and special education.  These amendments are intended to provide additional state support for positions that are currently funded only with local dollars.

KEY POINTS

• These amendments reflect increased state basic aid for school divisions employing instructional aides to reflect local prevailing practice.
• The SOQs fund only a portion of the actual prevailing costs of K-12 education in Virginia.
• These amendments are meant to provide additional state support for school divisions for positions that they are currently funding on their own without state support.
• Teacher Aides are vital positions that work with a teacher in the classroom to provide extra help and attention to students. They help enforce classroom rules and help supervise children during free time like recess and lunch.  They may work with students one-on-one or in groups to help reinforce lessons the teacher discussed.  Teacher aides often help teachers track assignments and attendance, prepare lesson materials and equipment and more.  Some teacher aides may work in specific areas of a school, such as a computer lab.

Flexibility in teacher compensation increase and bonus payments
Item 137 #2h (Watts)/Item 137 #9s (Ebbin)/Item 137 #26s (Marsden) remove the requirement for school divisions to provide at least an average 2.5 percent salary increase in each year of the biennium in order to access the state share of the 5 percent compensation supplement that is proposed for each year of the biennium, and clarify that the proposed retention bonus for instructional and support staff would be provided at local option.

KEY POINTS

• Local governments recognize the difficult work done by teachers and school staff and make considerable local contributions toward compensation, in addition to funding additional positions in excess of what is recognized by the Standards of Quality.
• By virtue of this large number of locally-funded positions, localities fund an estimated 56 percent of salary increases so as to provide the local match for the SOQ-recognized positions as well as the local funding required to provide equivalent salary increases for locally-funded positions in order to treat the school workforce equitably.
• This amendment would provide flexibility in implementing the compensation actions in the introduced budget in recognition of the significant number of positions that would not be covered by the state funding for the salary increase and retention bonus.

School capital (language)
Item 137 #32h (Morefield)/Item 137 #7s (McClellan) provide additional guidance on the eligibility of School Construction Assistance Program applicants by allowing a multi-year review of local composite index and fiscal stress, and allowing projects where construction began on July 1, 2022, to be eligible, as well as allowing the principal portion of future debt service payments on projects not yet began as an eligible expense.  These were recommendations from the Board of Education and the Commission on School Construction and Modernization.  Item 137 #33h (Durant)/Item 137 #15s (Reeves) allows the most favorable year among three years of fiscal stress index data to be used to determine the School Construction Grant award amounts.

School capital funding
Item 137 #6s (McClellan) provides $2.5 billion GF in FY 2024 to increase funding of School Construction Grants Program by $500 million GF in FY 2024 and increase funding of the School Construction Assistance Program by $2 billion GF in FY 2024. These programs, created in 2022, represent the first time since the Great Recession that the State has made significant investments in helping local governments with school capital costs. These amendments provide additional funding. This is a recommendation of the Commission on School Construction and Modernization.

KEY POINTS

• According to the Commission on School Construction and Modernization, more than half of K-12 school buildings in Virginia are more than 50 years old. The amount of funding needed to replace these buildings is estimated at $25 billion.
• The condition of the facilities in which children are educated has a direct impact on their ability to learn. Issues like inadequate climate control, lack of modern electric circuitry and internet capacity, and leaking roofs can negatively affect student assessment performance and staff morale.
• Many localities face significant challenges in raising sufficient funds to undertake these projects.
• This funding represents a significant investment to help address this issue. The language amendments provide important flexibility in the use of previously-appropriated funds.

Jail per diems
Item 73 #1h (Krizek)/Item 73 #1s (Reeves) would restore the local-responsible per diem rate from $4 to its pre-FY 2011 level of $8.

KEY POINTS

• The local-responsible per diem rate was cut in half in FY 2011, from $8 to $4. “Local-responsible” inmates are individuals who are incarcerated in a local correctional facility while awaiting trial, individuals convicted of misdemeanor offenses, or individuals convicted of felony offenses with a sentence of one year or less.
• The 2022 General Assembly increased the state-responsible per diem rate from $12 to $15. This funding increase is much appreciated and is a critical step in the right direction toward increasing state support for jails.  Revisiting the local-responsible rate will provide important assistance to local and regional jails, as there are more local-responsible offenders in local and regional jails and the population of state-responsible inmates in local and regional jails declined significantly over the last year.
• Virginia localities make a substantial contribution to the housing and care of inmates in local and regional jails. According to the Compensation Board, in FY 2021, localities contributed $601.4 million in operating and capital costs for jails and jail farms and an additional $16.4 million to house inmates in other jurisdictions; the state contributed $361.3 million through the Compensation Board.

Deputy sheriffs’ staffing
Item 72 #6h (LaRock)/Item 72 #7h (Wyatt)/Item 72 #2s (Boysko) would provide $13.4 million GF in FY 2024 for 302 additional law-enforcement deputy positions in FY 2024.

KEY POINTS

• State Code requires the Compensation Board to fund one law-enforcement deputy for each 1,500 people in a jurisdiction in which the sheriff bears primary law enforcement responsibilities. This staffing ratio has not been fully funded since FY 2008, leaving localities to fund positions necessary to support the operations of sheriffs’ offices. The Compensation Board calculates that 302 deputy positions are required to meet the 1:1,500 statutory ratio.
• Local law enforcement agencies have been stressed with recruitment and retention challenges. Localities make significant local contributions toward public safety, including providing salary supplements and locally-funded positions in Sheriffs’ offices, in addition to positions funded by the Compensation Board, but the continued partnership of the state in support of this critical function of government is essential.

Aid to localities with police departments (“HB 599”)
Item 410 #1h (McQuinn)/Item 410 #2h (Brewer)/Item 410 #3h (Hayes)/Item 410 #2s (Edwards) provide $20.8 million in FY 2024 in aid to localities with police departments to align funding for this program with the percentage change in total general fund revenue collections, in accordance with statutory requirements.

KEY POINTS

• The Operation Bold Blue Line proposal in the introduced budget will provide important recruitment and retention resources for state and local law enforcement in the near term; HB 599 funding is a complementary program providing ongoing state support for local police departments.
• Localities that receive HB 599 funding contribute significant local funds to their local police departments. In FY 2023, localities that receive HB 599 funds have been allocated $210.8 million from this funding source and reported budgeting $2.4 billion in local funds for this purpose.

Reimbursement to localities for 2024 Presidential primary expenses
Item 485 #1h (Sickles)/Item 485 #1s (Deeds) provide an additional $1.4 million to increase the reimbursement amount included in the introduced budget for the 2024 Presidential primary.

KEY POINTS

• Virginia Code requires the costs of the Presidential primary to be paid by the Commonwealth.
• The introduced budget includes an appropriation of approximately $5.8 million to reimburse localities for costs associated with the 2024 primary. This amount is the same as what was appropriated in 2020; localities reported costs of approximately $5.7 million to administer that primary.
• In order to account for growth in the number of registered voters and inflation in the intervening years, as well as the increasing complexity of election administration, the budget amendments request an additional $1.4 million for 2024 primary expenses.

Recordation tax distribution to localities
Item 266 #1s (Stuart) provides $20 million from the general fund in FY 2024 to be distributed among localities, as was done prior to 2020.  This funding can be directed toward transportation or public education purposes.

KEY POINT

• Prior to the 2020 General Assembly session, a portion of recordation tax revenues had been distributed to counties and cities since 1993. Funding was distributed quarterly and could be used for transportation or public education purposes. This amendment would restore this distribution.

Stormwater Local Assistance Fund (SLAF)
Item C-80 #1h (Bulova)/Item C-80 #1s (Hanger) increase SLAF funding by $9.9 million. Item 378 #2h (Lopez) would increase funding by $55 million in FY 2023 and $80 million in FY 2024.  SLAF is a grant-based funding program for localities managed by the Department of Environmental Quality. Grants can be used by localities to make stormwater improvements, including capital improvements that reduce pollutants and improve water quality and implement stormwater best management practices.

KEY POINTS

• Stormwater improvements are capital-intensive and essential for improving water quality across the commonwealth.
• SLAF provides matching grants to localities for planning, design, and implementation of stormwater best management practices that are cost effective and improve water quality.
• SLAF grants are essential for helping localities fund capital stormwater projects by implementing best management practices. Funding can be used for capital improvement projects such as stream restoration, wetland restoration and pond restoration projects.

Helpful budget amendments introduced

In addition to the amendments requested by VACo and its partner organizations, hundreds of other proposals are under consideration.  Following is a preliminary list of additional budget amendments that address priority issues for local governments.  VACo encourages support for these proposals.

Constitutional officer staffing

• Item 75 #1h (Bulova) provides $1.7 million in FY 2024 to fully fund the remaining unfunded positions in local offices of the Commissioners of the Revenue.
• Item 77 #1h (Morefield) provides $680,030 in FY 2024 to fully fund the remaining unfunded positions in Circuit Court Clerks’ offices. Item 77 #3s (Norment) provides $637,920 in FY 2023 and $695,912 in FY 2024 for unfunded Circuit Court Clerk positions.
• Item 78 #1h (Williams) provides $505,459 in FY 2024 to address unfunded and underfunded positions in Treasurers’ offices; Item 78 #2h (Kilgore) and Item 78 #1s (Lucas) provides $3 million in FY 2024 for unfunded deputy Treasurer positions.

Elections

• Item 90 #1s (Ebbin) provides $1 million in FY 2024 for the Department of Elections to support local registrars in processing same day voter registrations. Funding may be used for additional staff, technology and compensation to existing employees to cover the cost of increased workload.

Agriculture and forestry

• Item 108 #4h (Bloxom)/Item 108 #1s (Ruff) provide $72 million in FY 2024 for the Forest Sustainability Fund, which was created in 2022 to assist localities that have adopted a use value assessment and taxation program for real estate devoted to forest use by replacing a portion of the revenue forgone as a result of the use value program.

K-12 education

• Item 137 #20s (Marsden) provides $18.9 million in FY 2024 to increase the Cost of Competing Adjustment (COCA) for support position funding for divisions in Planning District Eight and other adjacent divisions specified in the Appropriations Act. For Planning District Eight, this increases the adjustment from 18.0 percent to its historic rate of 24.61. For other adjacent divisions, this increases the adjustment from 4.5 percent to 6.15 percent.)
• Item 137 #3s (Hanger) allows school divisions to use School Construction Grant Funds for regional programs and joint regional schools and allows school divisions to apply jointly for School Construction Assistance grants for construction of regional programs and joint regional centers.

Aid to local libraries

• Item 240 #1h (Carr)/Item 240 #2h (Morefield)/Item 240 #1s (Locke)/Item 240 #2s (Norment) provide $2.5 million GF in FY 2024 as the second installment of a four-year plan to fully fund the state library aid formula by FY 2026.

Finance – State assistance with mandated property tax exemptions

• Item 266 #3s (McPike) provides $34.5 million in FY 2024 to provide half of the tax revenue forgone by localities as a result of the property tax exemptions for disabled veterans and surviving spouses of members of the armed forces killed in action.
• Item 266 #5s (Stuart) provides $12.6 million in FY 2024 to fund legislation that would require the state to subsidize the state-mandated local real estate tax relief for disabled veterans and surviving spouses of members of the armed forces killed in action when more than one percent of a locality’s real estate tax base is lost due to such programs.

Health and human services

• Item 313 #7h (Sickles)/Item 313 #5s (Boysko) provides $8.7 million in FY 2024 to address inflation costs for same day access, primary care screening, and outpatient services at community services boards (CSBs), which are the first three steps of STEP-VA.
• Item 313 #9h (Fariss) provides $162.6 million in FY 2024 for recruitment and retention bonuses of $4000 for direct care staff at CSBs. Item 313 #10h (Fariss)/Item 313 #2s (Deeds) are similar but do not specify the bonus amounts.
• Item 408 #6h (Coyner) provides $5 million in FY 2024 for the Virginia Opioid User Reduction and Jail-Based Substance Use Disorder Treatment and Transition Fund, which would be created via legislation under consideration this session. The Fund would support the planning and implementation of locally administered jail-based addiction recovery and substance use disorder treatment and transition programs in local and regional jails. Item 408 #2s (Favola) would provide $2 million in FY 2023 and $5 million in FY 2024 for the Fund.
• Item 345 #1h (Coyner)/Item 345 #1s (Favola)/Item 345 #3s (Mason) would provide $180,000 GF and $60,000 in federal funds to expand Virginia’s Title IV-E Child Welfare Stipend Program. Under this program, students receive a stipend in exchange for working at a local department of social services for one year for each year of stipend funding.

Public safety

• Item 404 #1h (Wachsmann) removes language that exempts the Department of Corrections from making payments for service charges levied in lieu of taxes and provides $2 million in FY 2024 as a preliminary estimate of the service charges the Department would be required to pay localities should the exemption from payment in lieu of taxes be eliminated.

VACo Contact: Katie Boyle