The House and Senate budgets have been placed in a conference committee to resolve differences between the two proposals in advance of the session’s scheduled completion of legislative business on February 27. Both proposals contain items of importance to county government; a short list of priority items is provided below. VACo encourages members to contact budget conferees and members of your delegation about the following items. Amendments labeled “h” are in the House budget; amendments labeled “s” are in the Senate budget.
House Conferees: House Appropriations Chairman Torian, Vice-Chairman Sickles, Delegate Carr, Delegate Tyler, Delegate Bulova, Delegate Knight, Delegate Austin
Senate Conferees: Senate Finance and Appropriations Chair Howell, Senator Barker, Senator Lucas, Senator Locke, Senator Deeds, Senator Norment, Senator Hanger; Advisors: Senator Saslaw, Senator Newman
Items VACo Supports
Retention of full hold-harmless funding for K-12: VACo strongly supports the introduced budget’s protection of school divisions from revenue losses associated with enrollment fluctuations during the pandemic through the provision of $299.4 million General Funds (GF) in FY 2021 and $214.2 million GF in FY 2022 in “no loss” funding.
KEY POINTS
- Full state no-loss funding would provide vital assistance to school divisions that would otherwise experience revenue losses as a result of enrollment declines that are out of their control and are likely temporary in many cases.
- This state support would allow federal dollars to be used as enhanced support for school divisions to address pandemic-related costs such as improving building air quality and addressing learning loss.
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Addressing learning loss: VACo supports amendments that would address this important element of Virginia’s recovery from the COVID-19 pandemic. Item 145 #7s would provide $30 million in Lottery proceeds in FY 2022 to support one-time programs and initiatives to address learning loss; Item 144 #4h would provide $30 million in federal Elementary and Secondary School Emergency Relief Funds for grants to address learning loss and other student support needs.
KEY POINTS
- Information provided to the Board of Education in late January indicated that significantly more kindergarten and first grade students started the current school year missing benchmarks for literacy readiness compared to last year. Similarly, the majority of school divisions reported increases in students failing two or more classes compared to last year in both middle and high school.
- Addressing these issues promptly is important to ensuring students’ future academic and career success.
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Broadband mapping: Item 114 #2h would provide $424,000 GF in FY 2022 for the Department of Housing and Community Development to develop a statewide broadband map, a key step in improving affordable and accessible coverage.
KEY POINTS
- Existing federal mapping of areas unserved by broadband is overly broad and does not accurately portray address by address data, and instead relies on census block level data in which if one location within a census block is served, the entire census block is considered to be served.
- Identifying the scope of unserved areas is vital to determining broadband solutions. This amendment would bolster existing local government efforts to provide broadband services to their communities.
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Prepaid postage for absentee ballots: Legislation moving through the General Assembly would require the provision of prepaid postage with absentee ballots. Item 86 #1h would direct the Department of Elections to continue to reimburse localities for these costs from funds remaining in the $2 million appropriation made in the special session (approximately $940,000 of these funds were used to reimburse localities for postage costs during the November 2020 election).
KEY POINTS
- VACo strongly endorses the state continuing to support this requirement with state dollars.
- By-mail absentee voting will likely continue to play an important role in Virginia elections. Legislation enacted in 2020 that takes effect July 1, 2021, allows voters to be placed on a permanent absentee voter list, through which they will receive absentee ballots by mail for every election in which they are qualified to vote.
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Full reimbursement for compensation for general registrars and electoral board members: In FY 2019, the state reimbursed 69 percent of salaries for general registrars and 82 percent of electoral board member compensation relative to the levels set in the Appropriation Act. Item 87 #1h provides full reimbursement for the compensation of general registrars and electoral board members, in addition to placing registrars’ salaries on par with those of Treasurers. Item 87 #1s provides for full reimbursement and was a request of VACo; this funding was included in the March 2020 budget but unallotted in April.
KEY POINTS
- Local governments are expending significant funds for election administration. In FY 2019 (the most recent year for which the Auditor of Public Accounts has produced comprehensive reports), localities reported spending approximately $49 million for election administration, of which the state provided approximately $6 million to localities in partial reimbursement for general registrar and electoral board member compensation.
- Additional state resources would help localities to advance the legislature’s goals of expanding voting access. Full reimbursement for this compensation would free up local dollars which currently make up the difference between the state’s contribution and the salary levels set in the Appropriation Act, and is a good starting point for building a more robust state-local partnership in election administration.
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Study of mandatory property tax exemptions: VACo requested this language amendment, which will require a study of the effects of mandatory property tax exemptions on local finances and the development of ways to mitigate their effects on the local tax base. (Item 114 #6h and Item 114 #4s)
KEY POINTS
- In 2010, a constitutional amendment providing for a real property tax exemption for disabled veterans and their surviving spouses was approved by voters after being passed by the General Assembly. A subsequent constitutional amendment provided a similar exemption for the surviving spouses of servicemembers who are killed in action. Implementation legislation is moving through the legislature this session to provide a personal property tax exemption for one motor vehicle owned by a disabled veteran after passage of another Constitutional amendment in November 2020.
- A better understanding of the effect of these exemptions at the local level is important, as participation in the current tax exemption programs has exceeded initial expectations. In FY 2019, the exemptions for disabled veterans and surviving spouses of servicemembers killed in action resulted in approximately $60 million in lost revenue for localities.
- The study would be a step toward developing a way for the state to aid veterans in a way that is sustainable and does not hamper localities’ ability to provide critical local services.
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Reinstatement of distribution of recordation tax revenues to localities: Passage of transportation funding legislation in 2020 resulted in the dedication of $20 million in recordation taxes to the Hampton Roads Regional Transit Program that would otherwise be distributed to localities outside of Northern Virginia for transportation or education purposes. Given the continued strong growth in recordation tax revenue, VACo is advocating that a portion of this growth be dedicated to making affected localities whole.
KEY POINTS
- Prior to the 2020 General Assembly session, a portion of recordation tax revenues had been distributed to localities since 1993; funding was distributed quarterly and could be used by counties and cities for either transportation or K-12 purposes.
- Restoration of these funds will help localities respond to the transportation and education needs of their communities, which as a result of COVID-19 are greater than ever.
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Aid to local public libraries: Item 247 #1h and Item 247 #1s would restore $1 million GF in aid to local public libraries in FY 2022 that had been unallotted last spring.
KEY POINTS
- The state formula for aid to public libraries was last fully funded in FY 2001.
- Libraries have served as an especially valuable resource for many communities during the pandemic, in many communities providing internet access and offering virtual programming to supplement online learning.
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Implementation of updated Cooperative Health Budget funding formula: VACo supports proposals to hold localities harmless that would otherwise be required to contribute an increased local match for the upcoming fiscal year. VACo had proposed language in companion member amendments to allow those localities to contribute half of their increased match in FY 2023 and the full increased match in FY 2024, and would encourage consideration of such an approach.
KEY POINTS
- Hold-harmless funding in FY 2022 would allow affected localities time to plan and budget for their increased local contributions. Further phasing in the increases in local contributions over the upcoming biennium will allow these localities more time to adjust to the updated match rates.
- The match rates have not been fully updated in decades, so a limited transitional period for localities that will experience an increase in their local contributions would be a modest accommodation. The Virginia Department of Health expects to update match rates on a more routine basis moving forward, so the changes in local contributions will likely be more moderate in future years.
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Stormwater Local Assistance Fund: This funding provides vital assistance to local governments in meeting water quality requirements. (Item 379 #1h)
KEY POINTS
- Local governments must be equipped with the tools and funding necessary to achieve their water quality goals and help the Commonwealth meet its WIP III requirements. The Stormwater Local Assistance Fund (SLAF) is one of the most effective and efficient tools available to local governments and must be adequately funded.
- The Department of Environmental Quality’s (DEQ) SLAF needs assessment makes it clear that there is a nearly $50 million gap between the funding currently available through SLAF and the projects local governments have already planned for. This budget amendment provides critical funds that help close this gap.
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Enhanced Nutrient Removal Certainty Program: Item C-70.50 #1h would provide $150 million in bond proceeds for this purpose, which will assist Virginia in meeting the requirements of the Phase III Watershed Implementation Plan.
KEY POINTS
- This provides funding pursuant to the Enhanced Nutrient Removal Certainty Program (ENRC Program), as established by HB 2129 (Lopez) and SB 1354 (Hanger).
- This budget item, in conjunction with the provisions of the ENRC Program, will provide funding for certain design and installation costs for implementing nutrient upgrades at local wastewater treatment plants.
- This funding is a critical component of the largest, most important Chesapeake Bay cleanup initiative in the wastewater sector in 16 years.
- Virginia will not meet its WIP III goals without the continued nutrient reductions achieved by the wastewater sector, reductions that are directly linked to this funding.
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Tree conservation workgroup: VACo has been part of the group of stakeholders advocating for this initiative. This workgroup would be charged with developing policy recommendations to encourage the conservation of mature trees and tree cover on sites being developed, increase tree canopy cover in communities, and encourage the planting of trees. (Item 107 #1h)
KEY POINTS
- Tree replacement and conservation is an increasingly important tool for local governments, in regard to water quality projects, flood mitigation and prevention, and more.
- This workgroup will examine the existence and efficacy of current tree replacement and conservation policies as well as examine potential new policies that will further empower localities to preserve, plant and replace trees during the land development process.
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Flexibility in provision of utility assistance: VACo supports revisions to the language governing use of Coronavirus Relief Funds to provide utility assistance in order to allow these funds to be applied to a customer’s account more than once. (Item 479.10 #1h and Item 479.10 #1s)
KEY POINTS
- Due to the ongoing economic hardship experienced by many Virginians, utility assistance is still an important aspect of pandemic recovery.
- Flexibility to provide additional assistance is particularly helpful given recent action by Congress to extend the time allowed to expend Coronavirus Relief Fund dollars.
Item VACo Opposes
Deletion of language regarding local rate negotiation for private day placement services: Item 292 #2s would eliminate language that was added to the budget during the special session to make clear that local Children’s Services Act programs must continue to fund services associated with a child’s placement in a private school pursuant to an individualized education plan, but may adjust rates paid to account for virtual or distance learning such that rates reflect the level of service being provided.
KEY POINTS
- This language struck an appropriate balance by ensuring that children would continue to receive services while also addressing situations in which localities were asked to pay previously-contracted rates for services that were not able to be provided in accordance with the stipulations of local contracts.
- Retaining the language in the budget would make explicitly clear localities’ ability to negotiate rates when services are not able to be provided at a comparable level to what was specified in a contract.
VACo Contacts: VACo Legislative Team