Budget Amendments Introduced at VACo’s Request

January 22, 2019

VACo worked with patrons in the House and Senate to introduce a package of budget amendments to address major priorities of local governments.  All member amendments were due to the House Appropriations Committee and the Senate Finance Committee on Friday, January 11, so that staff could review them for any necessary technical corrections and prepare amendments for committee consideration.  Member amendments were posted online on Wednesday, January 16, and began to be considered by the House Appropriations Committee and the Senate Finance Committee on Thursday, January 17.  Deliberations on budget requests will continue throughout the coming weeks in advance of the “money committees” reporting their budgets on Sunday, February 3.

VACo is grateful to members for ensuring that important issues to county governments are part of the budget discussions. VACo encourages members to contact their legislators in support of these amendments.  It is particularly helpful to contact members of the House Appropriations Committee and the Senate Finance Committee.

Below is a summary of the amendments introduced at VACo’s request, many of which are joint requests with the Virginia Municipal League:

K-12 support position cap
Item 127 #1h (Sickles) and Item 127 #1s (Howell) direct the Secretary of Education and the Secretary of Finance, in consultation with the Chairs of the appropriate General Assembly Committees, to develop a plan to eliminate the current cap on recognition of support positions in the Standards of Quality and instead recognize support positions in accordance with prevailing local practice, which had been the case before the recession.  The plan is due prior to the 2020 General Assembly session and must include a schedule to eliminate the cap by FY 2024.  VACo has a longstanding position in favor of eliminating this cap, which artificially limits the number of support positions for which the state will share costs.

Adjust state and local shares for Standards of Quality Funding
Item 136 #22h (Krizek) and Item 136 #4s (Dance) provide a one-time adjustment to the Direct Aid to Public Education funding formula by increasing the state’s share of the Standards of Quality from 55 percent to 57 percent.  This adjustment, although temporary, would provide relief to all localities, who are struggling with the long-lasting effects of the reduction in state K-12 support during the recession.

Bolster VRS teacher plan funded status
Item 266 #1h (James) and Item 266 #1s (Lucas) direct that interest earned on $300 million of the Revenue Reserve Fund be transferred to VRS and deposited to the teacher retirement plan, where it could be invested in order to improve the funded status of the plan, which could ultimately help to reduce employer contribution rates.  The Revenue Reserve Fund was created during the 2018 General Assembly as an additional way to improve the state’s cash reserves to guard against future economic shocks; the Governor’s budget proposes to deposit $235 million GF in the Fund in FY 2019, as required by the 2018 Appropriations Act, and provides an additional $504 million GF in FY 2019 and $50 million GF in FY 2020.

Sheriffs’ deputies with law enforcement responsibility
Item 66 #1h and companion Item 73 #1h (Ware), Item 66 #3h and companion Item 73 #2h (LaRock), and Item 66 #7s and companion Item 73 #1s (Black) all provide funding for 241 law enforcement deputies in FY 2020 to meet the statutory requirement for the Compensation Board to fund at least one law enforcement deputy per 1,500 persons served by each sheriff’s office with law enforcement responsibility.  The 1:1,500 ratio has not been funded since FY 2008, leaving localities to step in to fund positions that are needed to ensure public safety.

Aid to localities with police departments
Item 397 #2h (Ingram)/Item 397 #1s (Deeds) provide additional funding to the “HB 599” program, which provides aid to localities with police departments.  Virginia Code provides that HB 599 funding is to increase at the same rate as growth in state General Fund revenue collections.  These amendments provide $7.9 million per year to “catch up” HB 599 funding with the state General Fund growth assumed in the introduced budget.

Effects of Medicaid expansion on Community Services Boards (CSBs)
The biennium budget passed in 2018 assumes that, as a result of Medicaid expansion, CSBs will be able to bill Medicaid for services for previously-uninsured individuals whose care had been funded by state General Funds. The 2018 budget also reduces state General Funds to CSBs accordingly in FY 2019 and in FY 2020.  CSBs have expressed concern that Medicaid billings will fully replace the reduced state General Fund support, particularly in the current fiscal year.  The Governor’s budget would allow the Department of Behavioral Health and Developmental Services to provide funding from special fund balances at the end of the fiscal year to Community Services Boards in circumstances where a Community Services Board’s additional FY 2019 Medicaid reimbursements do not reach at least 90 percent of the general fund reductions assumed in the 2018 Appropriations Act for FY 2019.  Item 310 #4h (Sickles) and Item 310 3s (Barker) would allow that assistance to be provided prior to the end of the fiscal year so that the provision of critical services is not disrupted.  The amendment also requires the Department of Behavioral Health and Developmental Services to report on how the expected GF savings compared to actual Medicaid payments for FY 2019, so that the expected GF savings in FY 2020 may be adjusted in amendments to the biennium budget during the 2020 General Assembly if necessary.

Protecting the Communications Sales and Use Tax Trust Fund
The budget passed in 2018 directed that $2 million per year be diverted from the Communications Sales and Use Tax Trust Fund into the state General Fund.  Localities strongly objected to this move, as the Trust Fund represents revenues held in trust for localities; the funding represented savings from the telecommunications relay contract (which is paid for “off the top” of the Trust Fund) that should have been left in the Trust Fund rather than being swept for general state purposes.  VACo, VML, and Virginia First Cities requested that the Governor eliminate this transfer in his budget and are grateful to the Governor for eliminating the transfer in FY 2020 in the introduced budget.  Item 3-1.01 #2h (Ingram) and Item 3-1.01 #1s (Wagner) and Item 3-1.01 #3s (Ebbin) would eliminate the transfer in FY 2019, thereby fully preserving the integrity of the Trust Fund, a particularly important consideration given the decline in revenues generated by the Communications Sales and Use Tax.

Study of election administration costs
Item 1 #2h (Cole) and Item 1 #3s (Ebbin) would set up a stakeholder workgroup to examine how elections are funded in Virginia, to include current state support and expected future needs of the system.  The workgroup would provide a venue for sharing information on potential cost-sharing efficiencies as well as an opportunity for discussions of expected challenges in the future and recommendations for how those challenges can be met.

Payments for service charges in lieu of taxes for state correctional facilities
Amendments carried by Delegate Kilgore and Senator Peake (House item to be assigned; Item 391 #2s) provide $1.3 million per year to pay for service charges levied in lieu of property taxes on state correctional facilities and eliminate budget language that overrides the existing statutory mandate for the Department of Corrections to pay these service charges.

VACo Contact: Katie Boyle

- Related Blog Posts -

VACo County Pulse Podcast | 2019 General Assembly Edition | Part 1

January 17, 2019

View Blog Post

Coronavirus Relief Fund Dollars to be Distributed to Cities and Counties; Certification Letters Due May 22

May 20, 2020

View Blog Post

Rural stormwater bill advances to full Senate

January 25, 2019

View Blog Post