General Assembly reports respective budget proposals

February 29, 2016

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The House and Senate money committees reported out their respective budgets last week. The following items were amendments to the introduced budget. This document tracks HB 30 and SB 30 as introduced.

Legislative

The House provides $24,600 from the general fund each year pursuant to House Joint Resolution 112, which establishes a two-year joint subcommittee to study the need for revisions to or reorganization of state Standards of Quality. Item 1 #4h

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

The House and Senate provide language that 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 #2h

Judicial

The Senate provides $600,000 the first year and $960,000 the second year from the general fund for drug courts in Southwest Virginia, including Lee County, Scott County, Wise County (Juvenile), Tazewell County, the City of Bristol, Buchanan County, Dickenson County, Russell County, Washington County and the 30th Judicial Circuit Court. These drug courts have been approved by the Supreme Court of Virginia but have not been funded. Item 40 #3s

The Senate provides 10 positions and $3 million each year from the general fund for deputy clerks for the district courts. This compensation initiative is subject to the approval of the Committee on District Courts. Based on the approved plan, the Executive Secretary of the Supreme Court may request that the Director of the Department of Planning and Budget redistribute these 10 positions between the General District and Juvenile and Domestic Relations District Courts as necessary. Items 43 #1s and 53 #3s

Administration

The House provides a 3 percent salary increase to all state supported local employees in FY 2017 and an additional 1 percent salary increase in FY 2018. Also included is funding for a compression salary adjustment for sheriffs’ offices and regional jails. Item 475 and Item 69 #3h

The Senate authorizes a 2 percent raise for state employees, faculty and teachers, effective November 10, 2016, and for state-supported local employees December 1, 2016. The pay raise would be contingent upon sufficient revenues. Item 475#3s

The House and Senate provide $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. Items 70 #1h and 69 #1s

The House and Senate provide 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. Items 70 #2h and 70 #1s

The House and Senate offer language that directs treasurers, not being compensated on a contingency basis as of January 1, 2015, be prohibited from being compensated on a contingency basis but instead be compensated administrative cost pursuant to § 58.1-3958, Code of Virginia. Treasurers currently collecting a contingency fee shall be eligible to contract on a contingency fee basis. Effective July 1, 2016, the collection of delinquent court fines, costs, forfeitures, and penalties shall be made consistent with § 19.2-349, Code of Virginia. This amendment restores the policy adopted by the 2015 General Assembly concerning court debt collections by local treasurers. The amendment removes the June 30, 2018 sunset of localities grandfathered by the language as it exited in Chapter 665 of the 2015 General Assembly. Items 73 #2h and 73 #1s.

The House 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 #1h

Commerce and Trade

The House eliminates funding included in the introduced budget of $2.8 million from the general fund each year for the Virginia Telecommunication Initiative. Item 109 #2h

The House provides $7 million from the general fund in additional funding, increasing total funding to $27 million, for GO Virginia in FY 2018. Item 109 #3h

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

The Senate 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 #1s

The Senate also provides an additional $3 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#1s

Education

The House has language that provides additional flexibility to school divisions in implementing and satisfying local matching requirements for the 2 percent salary increase for instructional and support positions as proposed in the introduced budget. School divisions will be allowed to include salary increases provided to instructional and support positions in FY 2017 and FY 2018. In order to receive the state’s share of funding, school divisions must provide the 2 percent salary increase by January 1, 2018. Item 139#1h

The House also provides a $20.3 million in the first year in Direct Aid to Education from the Lottery Proceeds Fund carried over from FY 2016. Item 139#2h

The House provides $85.2 million the first year and $157.2 million the second year from the Lottery Proceeds Fund and distributes to school divisions on a per pupil basis. Item 139#9h

The House 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. Surrounding school divisions and the local community college will offer dual enrollment to high school students who focus on such regional industry needs as coding/games/App design, cyber security, and automotive service excellence (ASE) certified technicians. Item 139#4h

The House budget has language directing a “resident school division” to deposit the appropriate state share of Standards of Quality (SOQ), sales tax and any applicable special education funding received from the Department of Education (DOE) for a qualifying student (with a special need) into an approved Parental Choice Education Savings Account. The provisions in this budget item incorporate provisions of HB 839 (LaRock). Item#139#15h

The House has language eliminating $3.8 million the first year from the general fund in payments made to 13 school divisions that experienced a decrease in funding in FY 2016 and FY 2017 due to a reduction in Average Daily Membership (ADM) and an increase in Local Composite Index (Item 139#14h). The Senate budget has language clarifying that the “No Loss Funding” in the introduced budget will only be funded in the first year, and will not be continued in the second year. The affected school divisions are the Counties of Sussex, Northumberland, King and Queen, Fauquier, Buckingham, Brunswick, Lunenburg, Essex, and Orange; and the Cities of Stanton, Franklin, Salem, and Martinsville. Item 139#8s

The Senate adds $48.9 million the first year and $2.2 million in general funds the second year (to the $83.2 million in the introduced budget) to cover the state’s share of teacher compensation supplement. The Senate also advances the date of the 2 percent pay increase to December 1, 2016 from July 10, 2016 in the introduced budget. Item 139#1s

The Senate proposal also reverses the schedule in the introduced budget providing an incentive for school divisions to hire an additional 2,500 personnel in the second year. Funding in the first year is redirected toward advancing the effective date of the 2 percent pay increase to December 1, 2016 from July 10, 2017. Item 139#2s

The Senate provides $96.4 million in general funds in the second year in a flexible manner to suit the most pressing needs of each school division. Such funds must be used at the school level and may not support district-wide uses. In addition, no less than half of each school division’s allocation shall be used only for non-recurring expenses. No local match is required. Item 139 #3s

The Senate provides one-time funding of $24.2 million in general funds as flexible, additional support for classroom needs of school divisions. These funds may not be used for central office purposes. Instead, these funds must be used for non-recurring expenses, and no local match is required. Item 139#4s

The Senate provides $15.9 million the first year and $16.4 million the second year in general funds for partial assistance on the Cost of Competing Adjustment (COCA) for K-12 support positions for the 18 affected school divisions. This amendment reflects changes from the introduced budget, which included $0 the first year and $40.6 million the second year. Item 139#5s

Finance

The House and Senate authorize the RSW (Rappahannock, Shenandoah and Warren) Regional Jail the option of electing to provide 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. Items 269 #1h and 269 #1s

Health and Human Resources

The House 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. Item 285 #1h

The House restores $511,678 the first year and $1.5 million the second year from the general fund to CSA which had been reduced in the introduced budget, based on a plan to expand foster care and adoption subsidies to children ages 19 to 21. A companion amendment, Item 346, eliminates this new initiative. Item 285 #2h

The House and Senate restore $12.1 million the first year and $29.1 million the second year from the general fund for services provided through Community Service Boards that was reduced in the introduced budget as part of the proposal to expand Medicaid pursuant to the Affordable Care Act contained in the introduced budget. Items 315 #1h and 315 #1s

The House adds language requiring the Department of Social Services to develop an administrative funding formula for local DSS that better reflects workload and local needs to ensure better performance of core responsibilities. This is a recommendation of the Joint Legislative Audit and Review Commission report on “Eligibility Determination in Virginia’s Medicaid Program.” Item 343 #7h

The House provides $3 million per year in Temporary Assistance for Needy Families (TANF) funding for Community Action Agencies. This additional funding will assist the agencies in meeting the needs of low-income individuals and families and allow them to use Community Services Block Grant funding to comply with new federal organizational standards. These standards include critical financial and administrative requirements related to modernizing the agencies to provide higher quality programs and services to low-income individuals. Item 348 #2h

The House increases funding for Children’s Advocacy Centers of Virginia by $250,000 each year from the general fund. This funding is necessary to handle the increase in caseloads and coverage areas. Item 348 #3h

The Senate adds language that requires the State Executive Council to convene a work group to make recommendations to the Governor and the General Assembly regarding strategies to increase the use by local Children’s Services Act (CSA) programs of funding allocated for non-mandated populations of children. Item 285 #1s

The House and Senate provide $1.5 million each year in federal Temporary Assistance for Needy Families (TANF) block grant funds for Community Action Agencies. Due to new federal requirements related to organizational standards for community action agencies, additional funding is needed for compliance. These standards include critical financial and administrative requirements related to modernizing the agencies to provider higher quality programs and services to low-income individuals. Items 348 # 2h and 348 #4s

Natural Resources

From the general fund, the House increases by $375,000 in both fiscal years for distribution to Soil and Water Conservation Districts (SWCDs) for small dam repairs. The Department of Conservation and Recreation identified a backlog of approximately $1.3 million in small dam repairs based upon annual inspections. Item 364#2h

The Senate provides an additional $350,000 each year in general funds for the same purpose. Item 364#3s

The House and Senate provide $633,100 in the first year from the general fund to rehabilitate the Upper North River Watershed Dam Number 77 on Hearthstone Lake in Augusta County to meet applicable performance standards. Items 364#4h and 364#2s

The House has language removing a requirement for each locality that has adopted a stormwater utility fee to file a report with the Department of Environmental Quality (DEQ) by October 1 of each year. Instead, localities are required to submit the same report to the Auditor of Public Accounts (APA).  Under these procedures, localities are required to provide information on expected nutrient and sediment reductions achieved through the stormwater utility fee. Item 370#1h

The Senate provides $2.9 million in the first year from the general fund to match federal and local funding for rehabilitation of Lake Pelham and Mountain Run dams in Culpeper County. Item 364#6s

The Senate proposal has language stating that any privately owned Railroad Heritage Trail of approximately 15.7 miles in length and located in King George County shall not be purchased, accepted for a donation, or otherwise transferred to the Commonwealth of Virginia for operation with, any State Park or Natural Heritage Preserve. Item 365#4s

The Senate has language that expands the use of the Stormwater Local Assistance Fund to include the acquisition of nonpoint nutrient credits. Item 370#1s

The Senate proposal provides $20 million in proceeds from Virginia Public Building Authority (VPBA) bonds to be deposited in the Stormwater Local Assistance Fund (SLAF). Moneys from SLAF are to be distributed to localities on a competitive basis for the upgrade of urban stormwater systems. Item C-475#1s

Transportation

The Senate provides level funding to the Revenue Sharing Program of $189 million in both years. This amount is consistent with the FY 2016 allocation to this program. Item 453 #3s

Miscellaneous

The Senate provides $20 million in bond proceeds in the first year for the Stormwater Local Assistance Fund, a program administered by the Department of Environmental Quality. Item C-47.5 #1s

The Senate requires that any legislation passed by the 2016 Session of the General Assembly that creates a new Chapter 13.4 of Title 55 of the Code of Virginia relating to the collection of taxes and the preemption of local authority regarding limited residential lodging shall not become effective until it is reenacted by the 2017 Session of the General Assembly and the Virginia Housing Commission completes a study and reports its work to the chairmen of the Senate and House Finance Committees. Item 3-5.14 #3s

The Senate eliminates outdated language concerning deposits of fines and fees. The eliminated language allowed the state to take approximately 50 percent of locally collected fines and forfeitures. Item 3-6.05 #1s

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

 

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