General Assembly Conference Budget Report

March 15, 2016

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The House and Senate agreed on a biennial budget on March 11. The following items of interest to localities are included in the General Assembly’s conference budget. This document tracks HB 30, which does the following:

Legislative

The Conference Report provides $24,000 each year from the general fund pursuant to House Joint Resolution 112 of the 2016 General Assembly, which establishes a two-year joint subcommittee to study the need for revisions to, or reorganization of, state Standards of Quality for public education. Item 1 #5c

Directs the Auditor of Public Accounts to receive reports on local stormwater charges. A companion amendment moves this requirement from the Department of Environmental Quality. This is intended to reduce redundancies as the local governments already report finances and charges to the APA on an annual basis. Item 2 #1c

Expands the scope of the previously authorized JLARC study of water resource planning and management to include the identification of water systems and other water dependent facilities that would be affected by changes to the state’s water protection regulations. Item 33 #2c

Judicial

This amendment provides $100,000 each year from the general fund for two pilot drug court programs, City of Norfolk and Henrico County, using non-narcotic, non-addictive prescription drug treatment regimens. Item 40 #4c

Provides $300,000 the first year and $960,000 the second year from the general fund for drug courts in jurisdictions with high drug caseloads, to be allocated by the State Drug Treatment Court Advisory Committee to existing drug courts which have been approved by the Supreme Court of Virginia but have not previously received state funding. Item 40 #5cs

Administration

Provides $100,000 from the general fund each year to be reimbursed to Nottoway County. The County currently bears the costs of confining in Piedmont Regional Jail those residents arrested for new offenses and confined in the jail facility. Item 70 #1c

Provides for the total estimated cost to the general fund of per diem payments to local and regional jails for the FY 2016 fourth quarter payments to localities. General funding provided in HB 29 is $11.3 million. Item 70 #2c

Provides $57,400 each year from the general fund for an additional five deputy Commissioner of the Revenue positions to support a portion of the staffing standards in the offices of the Commissioners of the Revenue. A companion amendment to Item 76 adds the positions to the position table. Item 72 #2c.

Restores the policy that was included in the 2015 Appropriations Act for collection of delinquent accounts by local treasurers, and modifies the language to permit treasurers currently collecting on a contingency fee basis to continue to do so. Item 73 #1c

Directs the State Compensation Board to convene a group of stakeholders to examine costs and liabilities to constitutional officers covered by VARisk. The Board shall examine alternative coverage arrangements associated with the Virginia Association of Counties Risk Pool and report their findings to the Chairmen of the House Appropriations Committee and Senate Finance Committee. Item 76 #1c

Provides five positions in the count table for additional Deputy Commissioners of the Revenue in FY 2017 and FY 2018 to support a portion of the staffing standards needs. A companion amendment to Item 72 provides funding to support the addition of these positions. Item 76 #2c

Commerce and Trade

Reduces $1.5 million from the general fund each year for the Virginia Telecommunication Initiative. Item 109 #2c

Provides $10 million from the general fund in additional funding, increasing total grant funding to $30 million for GO Virginia in FY 2018. Item 109 #3c

The House and Senate eliminate funding of $5 million from the general fund each year, which was to be used to create a new “Healthy Food Financing Program.” The program would have provided grants to grocery stores locating in underserved areas. Items 109 #4h and 109 #4s

Provides an additional $1 million in each year from the general fund for the Enterprise Zone Program in order to avoid pro-ration of benefits and provide certainty to businesses and developers of their cost/benefit analysis in bringing their business to underserved areas of the Commonwealth. Item 110 #1c

Provides an additional $1.5 million each year from the general fund to the Brownfields Restoration and Economic Development Assistance Fund to include remediation of Brownfield sites as well as assessment. Item 125#2c

Education

Provides language directing the Department of Education to establish a workgroup to assess the barriers to serving students with disabilities in their local public schools. Item 132 #2c

Provides $275,000 the second year from the general fund for a one-time start-up payment for the Virginia Virtual School. The $275,000 would cover the cost of the four full-time employees employed by the Virginia Virtual School and Virginia Virtual Board members’ costs during the first year start-up. Staff should be hired by January 1, 2018, in order to be ready for the opening of the School for the 2018-19 school year. Once students have enrolled in the Virginia Virtual School in the fall of 2018, the costs of the administration of the School will be provided for by the multi-division online providers that contract to provide full-time virtual programs with the School. This funding is contingent on the passage and enactment of House Bill 8. Item 137 #4c

Provides funds of $2.1 million the second year, which is approximately 2.5 percent of the annual allocation for the 2 percent salary increase, to initiate and support efforts to attract, train and retain quality teachers in hard-to-staff schools. The funding will provide competitive multi-year grants to help initiate change to more dynamic teacher compensation systems designed to increase teacher quality, effectiveness, and satisfaction and generate higher student achievement. High-need schools will be defined, in part, as schools not achieving full accreditation and schools with high numbers of at-risk students needing qualified teachers in hard-to-staff subjects. The funding may encourage school divisions to re-think how they combine their support with their salary structure to move away from the typical step increases based on tenure, to a system based on teacher performance and student progress. Item 138#2c

Adds $48.9 million from the general fund the first year and $2.1 million from the general fund the second year, to the $83.2 million the second year in the budget as introduced, for the state’s share of a teacher and support staff compensation supplement. This amendment advances the effective date of the 2 percent compensation increase from July 10, 2017 to December 1, 2016. Item 139#1c

Provides $10 million the second year from the general fund to support the reinstatement of the policy that allocates a portion of Lottery Proceeds revenues to distribute to school divisions on a per pupil amount basis. Item#139#3c

Directs the Department of Education to transfer the average state share of Standards of Quality per pupil funding and the state’s sales tax per pupil amount of funding to the Virginia Virtual School for each student that is enrolled in the Virginia Virtual School and who was previously enrolled in public school. Funds shall be transferred based on the number of actual students enrolled in the Virginia Virtual School with a limit of 5,000 students per school year. Item 139 #13c

Provides a one-time allocation of $100,000 in the first year from the general fund to develop a regional Career and Technical Governor’s School Center in the Roanoke Valley area. The surrounding school divisions and local community college will offer dual enrollment to high school students that focus on regional industry needs such as coding/games/App design, cyber security and automotive service excellence (ASE) certified technicians Item 139#20c

Provides $17 million in the first year and $17.4 million in the second year to partially fund the cost of competing adjustment for K-12 support positions for the 18 school divisions affected, based on a support COCA rate of 10.6 percent in each year of the biennium. This reflects a change from the introduced budget, which had included $0 in the first year and $40.6 million in the second year, based on a Cost of Competing Adjustment rate of 24.61 percent of SOQ funded salaries for funded support positions in the second year. Item 139 #22c

Clarifies that only an elementary school that has more than 45 percent of its students eligible for free or reduced lunch meals is eligible to request and potentially receive state reimbursement funding of $0.05 cents per breakfast meal served through an After-the-Bell breakfast model to its students. In addition, the language directs the Department of Education to ensure that only eligible elementary schools receive such reimbursement funding for participating in the After-the-Bell breakfast model. All schools that offer additional traditional breakfast meals may request state reimbursement funding of $0.05 cents per additional breakfast meal served under this initiative. Item 139#24c

Provides $1.4 million each year to update the per pupil amount for the Virginia Preschool Initiative to the first year of the biennium based on half the percentage that Basic Aid increased in the first year due to re-benchmarking in the budget, as introduced. This action increases the per pupil amount from $6,000 to $6,125, an increase of 2.1 percent. Item 139#26c

Provides $16.3 million the first year and $147.2 million the second year from the general fund to support reinstating the Lottery Proceeds Fund per pupil amount allocation going to schools divisions. There are other amendments in this item that provide additional revenues toward this initiative that collectively total up to $36.6 million in the first year and $157.2 million the second year in funding from Lottery revenues. Item 139 #27c

Provides additional funding of $500,000 in the first year for aid to local libraries to support construction of a new Eastern Shore Public Library. The funds are matched by $2 million from local government and $2.5 million from donors. Item 241 #1c

Increases state aid to public libraries by $500,000 each year. This additional funding is to be used to purchase summer reading program materials and STEM instructional materials in support of reducing students’ summer learning loss. Item 241 #2c

Provides an additional $20,000 each year for aid to local libraries for operating costs at the Saltville branch of the Smyth-Bland Regional Library. Item 241 #3c

Finance

Authorizes the RSW (Rappahannock, Shenandoah and Warren) Regional Jail the option of providing Line of Duty benefits to their employees outside of the state run plan as it was not in existence when the original opt-out period took place. Item 269 #1c

Health and Human Resources

Requires the State Executive Council for Children’s Services to continue its review and development of a robust set of options for (i) increasing the reintegration of children receiving special education private day treatment service in their home school districts, based on outcome data to assist in making decisions on the appropriate utilization of these services, and (ii) funding the educational costs for students admitted to Medicaid-funded state or private psychiatric or residential treatment facilities for non-educational reasons. Options and recommendations are to be provided to the Governor and the Chairmen of the House Appropriations and Senate Finance Committees by November 1, 2016. Item 285 #1c

Provides $500,000 each year from the general fund for local administrative costs of providing oversight, accountability and administration for the Children’s Services Act (CSA). Local administrative duties include implementing the mandatory assessment tool and process, developing service plans for children, managing expenditures, collecting input and outcome data by child, negotiating rates and contracts with vendors, and maximizing the use of federal funds. It is the intent that the Office of Children’s Services shall develop a methodology to distribute this additional funding to local governments in an equitable manner.) Item 285 #2c

Requires the Virginia Department of Health to collaborate with the Virginia Health Care Foundation, the Department of Behavioral Health and Developmental Services, the state’s teaching hospitals and other relevant stakeholders to develop a plan to increase the number of behavioral health practitioners practicing in state and local behavioral health agencies, and health safety net organizations through the use of a student loan repayment program. Language sets out provisions that the program design is to include a preference for applicants to practice in underserved areas for at least two years. The plan shall be reported to the Governor and the Chairmen of the House Appropriations and Senate Finance Committees and the Chairman of the Joint Subcommittee to Study Mental Health Services in the Twenty-First Century by November 1, 2016. Items 288 #2c

Allocates $840,000 each year from the Virginia Rescue Squad Assistance Fund (RSAF) for the purchase of federally required ambulance cot retention systems. Language allows only nonprofit Emergency Medical Services agencies to receive the funds. The costs to meet the new federal standard is $40,000 per unit. Item 289 #1c

Provides $1 million each year from the Temporary Assistance to Needy Families (TANF) block grant to support the Resource Mothers program. The purpose of the program is to reduce infant mortality and reduce the incidents of low birth weight babies. The program focuses on first-time teenage mothers and provides a mentor for the teen and her family. The mentoring occurs from the prenatal period through the infant’s first birthday. The resource mother provides health education, infant care tips, model daily living skills, encourages good decision making and planning, and connects the teen to community resources. The funding for the program was eliminated through budget reductions and is in the process of phasing down. This funding would continue the program. Item 294 #3c

Adds $100,000 from the general fund the second year for the Virginia Dental Health Foundation’s Mission of Mercy (MOM) dental project. The introduced budget provided $100,000 from the general fund the first year, but did not provide the second year amount for the project. The MOM dental project provides no cost services in underserved areas of the Commonwealth through the use of volunteer dentists and hygienists. The project has treated more than 59,000 patients with dental care valued at $38.3 million since 2000. Item 296 #2

Adds language requiring the Department of Medical Assistance Services to provide information and conduct outreach activities with the Department of Corrections and local and regional jails on the GAP program to provide Medicaid primary care, outpatient services, medications and mental health services to low-income individuals with serious mental illness who are released from custody. Item 306 #6c

Eliminates $1.9 million each year from the general fund with a corresponding reduction in federal funds for 100 reserve waiver slots. A companion amendment in this item provides funding for 40 emergency reserve waiver slots. Item 306 #23c

Restores $12.1 million the first year and $29.1 million the second year from the general fund for services provided through Community Services Boards that was reduced in the introduced budget as part of the proposal to expand Medicaid pursuant to the Patient Protection and Affordable Care Act. A companion amendment in Item 306 eliminates Medicaid expansion. Item 315 #1c

Provides $2 million from the general fund each year to fund two additional Programs for Assertive Community Treatment (PACT). These programs focus on individuals with serious mental illness at-risk of being frequent utilizers of hospitals, homeless shelters and jails. PACT teams are self-contained interdisciplinary teams of clinical staff that provide intensive treatment in the community to promote stability for individuals that typically do not access the mental health system. Item 315 #4c

Adds $4.8 million the second year from the Temporary Assistance to Needy Families (TANF) block grant and language to require the Department of Social Services to provide TANF recipients with two or more children a monthly TANF supplemental payment equal to any child support payments received on their behalf up to $200. This amount would not be counted in determining eligibility for Medicaid. Item 342 #1c

Increases the cash benefit for the Temporary Assistance to Needy Families (TANF) program by 2.5 percent on July 1, 2016. The current monthly TANF benefit averages $259 per month for a family. Since 1995 when TANF was created, there have only been two increases in the benefit, the most recent was 2.5 percent on January 1, 2016. The funding is from the federal TANF block grant. Item 342 #2c

Provides $1 million each year from the general fund and $3.3 million each year from nongeneral funds for local departments of social services administrative operations for Medicaid application and renewal processing. Local departments have experienced an increased volume of applications for Medicaid as a result of open enrollment on the federal exchange and a subsequent increase in Medicaid applications. Consequently, local departments are struggling to complete Medicaid renewal applications. Item 343 #c

Provides additional authority to implement the Fostering Futures program that allows individuals, if eligible, to continue receive foster care service until the age of 21. The introduced budget provided funding and limited language to implement the program. Item 346 #3c

Reduces $2 million each year from the Temporary Assistance for Needy Families (TANF) block grant for Healthy Families. The introduced budget increased TANF funding for Healthy Families from $4.3 million to $11 million. Item 348 #4c

Provides $2 million each year in nongeneral funds from the Temporary Assistance for Needy Families (TANF) block grant to provide job training at Virginia community colleges for TANF recipients. Currently, three community colleges offer this service. This funding would allow the services to be offered at five additional community colleges. Item 348 #5c

Natural Resources

Removes the requirement that each locality with a stormwater service charge file a report with DEQ as to the programs funded by these fees and the expected nutrient and sediment reductions for each of these programs and instead requires that this report be filed by October 1 of each year with the Auditor of Public Accounts. Upon request, the DEQ would continue to offer assistance to the APA in their review of the reports. The requirement to ensure compliance with the Code of Virginia shall remain in place. Item 370#1c

Expands the use of the Stormwater Local Assistance Fund to include the acquisition of nonpoint nutrient credits. Item 370#2c

Public Safety

Removes new funding and positions included in the introduced budget to establish six pilot re-entry programs in six local and regional jails for state-responsible inmates held and directly-released from those facilities. Item 393 #3c

Adds language establishing an interagency task force chaired by the Secretary of Public Safety and Homeland Security, and including the Departments of Juvenile Justice, Corrections, and Behavioral Health and Developmental Services, and the Office of Children’s Services to consider the future capital and operational requirements of Virginia’s juvenile correctional centers. Item 415 #1c

Directs the Department of Juvenile Justice to work cooperatively with localities that may be affected by the potential closure of a state juvenile correctional center, and to assist those state employees that may be affected by the closure. Item 415 #2c

Transportation

Directs the Commonwealth Transportation Board’s rail subcommittee to review the long range strategic and financial plans as well as service impacts of the Virginia Railway Express. Item 436 #2c

Adds language directing the Secretary of Transportation to report to the money committees on the outcome of negotiations under the request for proposals for the Transform 66 Outside the Beltway project by October 31, 2016, to enable consideration of proceeding with public financing of such project if the public-private proposal does not meet the terms outlined in the RFP. Item 436 #3c

Adds language authorizing dedicated funding for a pilot project for rural rustic roads in context sensitive areas from existing unpaved secondary highway funds. Item 453 #2c

Appropriates additional transportation funding available for construction based on the December 2015 revisions to revenue forecast and from the increased federal funding available from the passage of the Fixing America’s Surface Transportation (FAST) Act. It stipulates that these amounts will be distributed following the new construction formula adopted pursuant to House Bill 1887, 2015 Session of the General Assembly and set out in § 33.2-358, Code of Virginia, providing 4 percent of the funds to the State of Good Repair Program, and 27.5 percent each to the High Priority Projects and District Grant Programs.

It further requires that as a condition on expenditures of the amounts allocated for highway construction, the Commonwealth Transportation Board must include adequate funding in the fiscal year 2017-2022 Six Year Improvement Program to add a third eastbound travel lane on Interstate 66 from the Dulles Connector Road to the Glebe Road/Fairfax Drive exit, and begin environmental work on such project by July 15, 2016, and complete a minimum of 30 percent of the design work by November 1, 2017. Item 453 #3c

Miscellaneous

Eliminates outdated language concerning deposits of local fines and fees. The eliminated language allowed the state to take approximately 50 percent of the local collected fines and forfeitures. However, the conference report does not eliminate language allowing the state to act as the fiscal agent of all fines and fees collected which affects 31 counties and cities statewide (cities of Falls Church and Fairfax City are exempt). Item 3-6.05 #1c

VACo Contacts: Beau Blevins, Dean Lynch, CAE and Larry Land, CAE

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