VACo worked with legislators to introduce a package of budget amendments that address key issues of importance to local governments. House members were required to submit their amendments earlier than usual this year due to the compressed short session; the deadline for House amendments was January 8, and the House Appropriations Committee heard budget amendment presentations from House members who do not serve on the committee on January 18. Senators were required to submit their budget amendments by January 15, and the Senate Finance and Appropriations Committee is scheduled to hold its budget amendment hearing on the afternoon of Thursday, January 21. The “money committees” are scheduled to report their respective budgets on Sunday, February 7, in advance of the expected adjournment of the 30-day regular session on February 11. Completion of the legislature’s revisions to the Governor’s budget is likely to be one of the tasks awaiting the General Assembly in the special session that is expected to be called in mid-February.
VACo is grateful to the patrons of its budget requests 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, is provided below.
Scores of amendments were filed in each chamber, including amendments that VACo supports that were introduced at the request of partner organizations. VACo will be highlighting several of these amendments in a future edition of Capitol Contact.
VACo BUDGET REQUESTS
Eligibility for Virginia Telecommunication Initiative Funding
Item 114 #10 (Hurst), introduced at VACo’s request, would broaden eligibility such that a local government or other public entity could qualify for funding from the Virginia Telecommunication Initiative without a private sector partner. An additional amendment, Item 114 #3s (Edwards), would provide similar flexibility for proposals addressing telehealth or telelearning. Several related amendments, Item 114 #6h (Tyler), Item 114 #2s (Edwards), and Item 114 #9s (Lewis), would direct the Department of Housing and Community Development to establish a one-year pilot program in FY 2022 in which public broadband authorities could apply directly for VATI funding, with a cap of 10 percent of total funding available under the pilot program.
Recordation Tax Distribution to Localities
Item 273 #1h (McQuinn), Item 273 #1s (Hanger), Item 273 #2s (Deeds), and Item 273 #4s (Vogel) would make localities whole that would otherwise be affected by the 2020 General Assembly’s action to dedicate $20 million in state recordation tax revenues to Hampton Roads Transit. The amendment would direct $20 million in additional recordation tax revenues to hold harmless those localities not served by Hampton Roads Transit that previously received distributions of these funds, which could be used for transportation or education needs.
Study of Local Fiscal Impacts of Mandatory Property Tax Exemptions
Item 114 #7h (Mugler) and Item 114 #4s (Stuart) would direct the Commission on Local Government to review the effects of mandatory property tax exemptions on local governments’ finances and recommend methods to mitigate these potential impacts. The Commission would report to the Governor, the Joint Subcommittee on Local Government Fiscal Stress, and the “money committee” Chairs by November 1, 2021.
Hold-Harmless for Local Health Department Funding Formula Change
The Governor’s budget would update the revenue capacity data in the Cooperative Health Budget funding formula, which would result in increased local match rates for some localities and decreased local matches for others. The Governor’s budget includes hold-harmless funding in FY 2022 for localities that would be required to increase their local contributions. Item 302 #2h (Hudson) and Item 302 #1s (Deeds) would phase in the increased local match such that affected localities would contribute half of their required increase in FY 2023 and the full required increase in FY 2024, thus providing some additional time to adjust to the updated contribution requirements. The amendments also require reporting to appropriate legislative committee chairs on future updates to the funding formula (in addition to the introduced budget’s requirement to report to the Governor).
Hold-harmless for localities for certain children’s psychiatric residential costs
The Governor’s budget reflects a change announced by the Department of Medical Assistance Services last fall that costs previously covered by Title IV-E for children in psychiatric residential treatment facilities may no longer be covered by Title-IV-E (which is a state-federal cost-share), and will instead be covered by Medicaid (which requires a local match in these settings). Item 292 #1h (Sickles) would exempt localities from the local match for the costs that would previously have been covered by Title IV-E.
Jail per diems
Item 69 #3h (Hope) would provide an increase for jail per diem payments to reflect the parallel increase in the Consumer Price Index since the current rates were set by the 2010 General Assembly. Jails are expected to incur significant costs to comply with new standards for behavioral health and medical care that are in the process of being adopted the Board of Local and Regional Jails at the direction of the 2019 Session of the General Assembly.
Reimbursement for general registrar and electoral board member compensation
Item 87 #3h (Tyler) and Item 87 #2s (Deeds) would restore full reimbursement for compensation for general registrars and electoral board members, which was included in the budget as passed in March 2020, but unallotted in April and not able to be restored during the 2020 Special Session. In fall 2019, the Department of Elections estimated that the state would reimburse 69 percent of registrar compensation and 81 percent of electoral board member compensation in FY 2020. Several similar amendments would restore full reimbursement for registrars’ salaries and also provide a salary increase.
Stormwater Local Assistance Fund (SLAF) and Water Quality Improvement Fund (WQIF)
Item C-70 #1s (Hanger) and Item C-70 #2h (Bulova) provide an additional $39,792,860 in bond authority for wastewater treatment plant upgrades driven by regulatory requirements from the Department of Environment Quality (DEQ) in order to meet the Chesapeake Bay Phase III Watershed Implementation Plan (WIP). This figure fills the gap between what is currently in the budget and what the DEQ’s 2020 WQIF needs assessment calls for. Item C-70 #2s (Hanger) and Item C-70 #1h (Bulova) provide an additional $50,910,884 in bond authority for the Stormwater Local Assistance Fund (SLAF) in order to meet Virginia’s Phase III WIP. This figure fills the gap between what is currently in the budget and what the DEQ’s 2020 SLAF needs assessment calls for.
VACo Contact: VACo Legislative Team