A lengthy process of revising the 2022-2024 biennium budget advanced one step closer to completion on September 6 with passage of HB 6001. This legislation, which was released on September 2, contains the full text of the agreement among budget conferees that was announced August 25. The procedural resolution setting out parameters for the special session did not permit amendments to the legislation, so there was minimal debate prior to its passage, and the bill passed overwhelmingly in both chambers. The legislation now heads to the Governor for consideration.
The House Appropriations Committee staff briefing is available at this link, and the Senate Finance and Appropriations Committee staff briefing is available at this link. Estimated distributions for school divisions are posted at this link; additional detail is expected in a forthcoming Superintendent’s memo, which VACo will share when it becomes available.
An overview of key provisions of importance to local governments is provided below.
- An additional 2 percent salary increase for state employees, effective December 10, 2023 (this is in addition to the 5 percent increase that took effect June 10, 2023).
- An additional 2 percent salary increase for Constitutional officers and state-supported local employees, effective December 1, 2023 (this is in addition to the 5 percent increase that took effect July 1, 2023).
- $54.6 million for the state share of an additional 2 percent salary increase in FY 2024 for SOQ-recognized positions, effective January 1, 2024. Budget language requires school divisions (i) to have provided at least an average 2.5 percent salary increase in each year of the biennium and (ii) to certify that an equivalent increase of 2 percent will be provided to instructional and support personnel no later than January 1, 2024. School divisions that previously provided a total average increase greater than the 5 percent increases provided in the first or second year may count those increases toward the required certification for the additional 2 percent.
- $7.6 million for compression adjustments for deputy sheriffs and regional jail officers, effective December 1, 2023.
- $4 million to increase salaries for attorneys in Commonwealth’s Attorneys’ offices, effective December 1, 2023.
- $593,507 to increase salaries for positions in circuit court clerks’ offices, effective December 1, 2023.
- $18 million to increase compensation for Community Services Board staff; language states that the Department of Behavioral Health and Developmental Services may fund up to 100 percent of the costs of the compensation increase.
- $3.7 million to the Indigent Defense Commission for attorney compensation and employee salary compression adjustments, effective December 10, 2023.
- $1 million for salary increases for general district court clerks and juvenile and domestic relations court clerks, effective December 10, 2023.
- $152.3 million to recognize additional support positions in the K-12 funding formula. This additional funding will allow 24 support positions per 1000 Average Daily Membership to be recognized (an increase from the current recognition of 21 support positions per 1000 ADM). Language specifies that this ratio will be used for rebenchmarking for the next biennium (FY 2025 and FY 2026). Full elimination of the cap on recognition of support positions has been a long-standing priority for VACo and this additional funding is an important step toward this goal.
- $418.3 million in additional flexible state funding, which may be used for the implementation of the Virginia Literacy Act, learning loss recovery, and additional operating and infrastructure support. Funding will be disbursed based on the state share of $1,086.44 per pupil, based on the estimated number of federal free lunch participants, and the state share of $203.63 per pupil based on average daily membership, with each school division receiving a minimum distribution of $150,000. A local match is not required.
- Establishes a Joint Subcommittee on Elementary and Secondary Education Funding and directs the Joint Subcommittee, as part of its work, to review the Joint Legislative Audit and Review Commission’s July 2023 report on the K-12 funding formula and develop a long-range plan for implementation of its recommendations.
- $6.7 million from remaining federal Elementary and Secondary School Emergency Relief funds for implementation of the Virginia Literacy Act.
- $12 million GF and $8 million from ARPA State and Local Fiscal Recovery Funds for school safety and security grants.
- $1.7 million from Lottery proceeds in supplemental one-time support for Accomack County and Northampton County school divisions.
- Reflects an additional $86.2 million in Lottery proceeds.
- Exempts community-based providers that are recipients of Virginia Preschool Initiative grants from teacher licensure requirements, as long as the provider meets the expectations of the statewide measurement and improvement system.
- Authorizes the Superintendent of Public Instruction to provide flexibility in staff-to-child ratios and group sizes for licensed child day centers and child day centers participating in the Child Care Subsidy Program (the number of children per staff may be increased by one child for groups of children from birth to the age of public school eligibility, and by two for groups of children from the age of school eligibility to 12).
Aid to Local Public Libraries
- $3.6 million for additional state aid to local public libraries.
Administration – Elections
- $7.3 million to cover costs associated with the 2024 Presidential Primary, of which $7.1 million may be used to reimburse localities for their expenditures and $147,308 may be used to cover costs incurred directly by the Department of Elections; this funding level reflects requests made by VACo and advocacy partners to more accurately reflect the costs of administering elections, relative to the amount proposed in the December 2022 budget.
Administration – Constitutional officers and jails
- $931,301 to restore positions in offices of the Commissioners of the Revenue that are allocated through staffing standards but unfunded due to prior budget reductions.
- $2 million to restore positions in Treasurers’ offices that are allocated through staffing standards, but have been unfunded due to prior budget reductions.
- An increase of $1 for the local-responsible jail per diem rate (from $4 to $5).
- $41,850 for participation in career development programs, effective December 1, 2023.
Agriculture and Forestry
- $700,000 for the Dairy Producer Margin Coverage Premium Assistance Fund.
- $250,000 for the Blue Catfish Processing, Flash Freezing, and Infrastructure Grant Program created during the 2023 General Assembly session.
- $1.1 million and 15 positions for the registration and inspection of facilities selling certain hemp products.
Commerce and Trade – Broadband
- Authorizes the Department of Housing and Community Development to use federal Broadband Equity, Access, and Deployment (BEAD) program funding from the Infrastructure Investment and Jobs Act.
- $125 million GF in FY 2024 for the Virginia Business Ready Sites Program Fund (which includes $50 million in excess FY 2022 revenues previously designated for deposit to the Fund). Creates the Site Replacement Fund as a sub-fund within the Virginia Business Ready Sites Program Fund; certain sales proceeds from the sale of specified property within Henrico County are to be deposited in the sub-fund and made available to the Economic Development Authority of Henrico County.
- Language clarifies eligibility for grant payments from the Cloud Computing Cluster Infrastructure Grant Fund.
- $10 million for the development of an inland port in the Mount Rogers Planning District. Language directs the Virginia Port Authority to acquire, design, and develop the site, and directs the Port Authority and the Virginia Economic Development Partnership Authority to develop a business recruitment strategy for the inland port and the surrounding area, to include making recommendations for any additional infrastructure improvements needed to maximize the economic benefit of the inland port.
- $8.5 million to support a cruise ship port-of-call location and related visitor support and tourism on the York River (which includes $1 million for transit system improvements); language requires coordination with state and local agencies on permitting and maximization of the economic impact of the pier location.
- $6 million for an incentive payment for purchase of the Central Virginia Training Center property.
- $75 million for the Virginia Business Ready Sites Acquisition Fund, which was created in 2023 legislation.
- $1.5 million for the Community Development Financial Institutions Fund.
- $4 million for the Virginia Power Innovation Fund.
- $5 million for the New Economy Workforce Credential Grant Program.
- Language directs the Secretary of Education, Secretary of Finance, and President of Richard Bland College, among others, to evaluate the creation of a regional partnership and other strategies to improve educational attainment, alternative delivery methods, and economic and community development for the region and the state. Other regional entities, including Virginia State University, Virginia Commonwealth University, and Brightpoint Community College, may participate.
- $7.75 million to the Virginia Community College System to support workforce programs in regions with high labor demand and low supply; an employer match is required. An additional $250,000 is designated for Northern Virginia Community College for an automotive apprenticeship program and an additional $350,000 is designated for early childhood programs at Virginia Peninsula Community College.
- $500,000 to establish the Department of Workforce Development and Advancement in the Secretary of Labor’s office.
- Directs the Department of Housing and Community Development (DHCD) to use up to $18 million in balances in the Low-Income Energy Efficiency Program Fund for flood relief for certain specified disasters that occurred in July and August 2022, and sets out parameters for the program, as well as reporting requirements.
- $200,000 for the Buchanan County and Tazewell County Departments of Social Services for administrative costs associated with providing flood relief to the residents of Buchanan County and Tazewell County.
- $200,000 for DHCD’s comprehensive statewide housing assessment, as required by legislation passed in 2023.
Human Services – Aging/Adults with Disabilities
- $700,000 to hold Area Agencies on Aging harmless from changes to the distribution formula for federal Older Americans Act funding resulting from the 2020 census.
- Increases the Auxiliary Grant rate from $1609 per month to $2055 per month, effective January 1, 2024.
Human Services – Children’s Services Act
- Eliminates language that directed the implementation of rate-setting for private special education day placements funded through the Children’s Services Act. Redirects the proposed $100,000 for consultant support for rate setting to a review by the Department of Education of private day placement decisions in localities with higher-than-average use of private day placements.
Human Services – Behavioral Health
- $58 million to expand and modernize the comprehensive crisis services system, including investments in additional crisis receiving centers and crisis stabilization units and enhancements to existing sites.
- $10 million for the one-time costs of establishing additional mobile crisis services in underserved areas.
- $10 million for comprehensive psychiatric emergency programs or similar models of psychiatric care in emergency departments.
- $30 million for permanent supportive housing for individuals with serious mental illness and $4 million for supervised residential care for 100 individuals, with priority to be given to projects serving individuals who face extraordinary barriers to discharge from state hospitals.
- $4.4 million to increase funding for the first three steps of STEP-VA (same-day access, primary care screening, and outpatient services).
- $5.1 million in one-time funding for the Department of Criminal Justice Services (DCJS) to contract with local law enforcement agencies for off-duty officers or officers working overtime to provide transportation services or to assume custody of an individual under an emergency custody order or a temporary detention order who is awaiting admission to a facility or for whom a bed has not been identified. DCJS is directed to coordinate with the Department of Behavioral Health and Developmental Services (DBHDS) to set criteria for awarding contracts and to ensure DCJS contracts are not duplicative of contracts under DBHDS’s Off Duty Officer Program.
- $1.5 million for the Virginia Behavioral Health Loan Repayment Program.
- $7.5 million for DBHDS and partners to provide technical assistance to school divisions seeking guidance on integrating mental health services and grants to school divisions to contract with public or private providers for community-based mental health services.
- $500,000 for DBHDS to evaluate public-private partnership arrangements for the Catawba Hospital transformation plan or other potential alternatives for the provision of behavioral health or substance use disorder services. Language directs DBHDS to assess how the surrounding localities may share efforts in transporting and taking custody of individuals under ECOs or TDOs who would otherwise be transported to Catawba Hospital; additional language directs DBHDS to consult with the Opioid Abatement Authority to assess whether surrounding localities may pool their opioid settlement funds to assist with the transformation plan.
- $4 million for DBHDS to contract with the Virginia Mental Health Access Program to develop integrated mental health services for children.
- $1.4 million in opioid settlement funding for purchase and distribution of naloxone.
- $4.2 million for child psychiatry and children’s crisis response services for children with mental health and behavioral disorders.
Human Services – Health
- Extends the Joint Subcommittee to Examine the Commonwealth’s Pandemic Response and requires it to provide an interim status report by the first day of 2024 session and a final report by September 1, 2024. The Joint Subcommittee was originally scheduled to submit its final report by September 1, 2023.
- Designates $5.8 million from the $143.25 million appropriated for affordable access to higher education to address nursing shortages, with priority to be given to increased compensation for full and part-time faculty to remain competitive with nursing salaries.
- $3 million for the Nursing Preceptor Incentive Program to increase the maximum incentive payment from $1000 to $5000 and expand eligibility to licensed practical nurses and registered nurses.
- $943,856 GF/$698,322 NGF for rent costs for local health departments.
- $3.4 million GF in FY 2024 in state matching funds for federal Drinking Water State Revolving Fund awards from the Infrastructure Investment and Jobs Act.
- $5 million in State and Local Fiscal Recovery Funds to establish the Earn to Learn Nursing Education Acceleration Program, which will award grants for the formation of collaborative clinical training arrangements between high schools, colleges and universities, hospitals, and health providers.
Human Services – Medicaid
- Funds 500 additional Developmental Disabilities waiver slots, effective January 1, 2024.
- Provides a 12.5 percent rate increase for Early Intervention services, excluding case management, for all children under age three enrolled through Medicaid, effective January 1, 2024.
- Authorizes the reprocurement of the state’s managed care service delivery system, with implementation no earlier than July 1, 2024; directs the Department of Medical Assistance Services to exclude dental services, developmental disability waiver services, and other services currently excluded from managed care from the development of a managed care contract.
Human Services – Social Services
- $2.3 million GF in foster care and adoption cost of living adjustments.
Courts and Public Safety
- An additional $2.1 million for assistance to localities with police departments (“HB 599” funding), which is designated as one-time funding.
- Provides $250,000 to establish the Office of the Department of Corrections Ombudsman within the Office of the State Inspector General. The Ombudsman is to provide information to interested parties regarding the rights of inmates and employees; monitor conditions of confinement; assess compliance with existing policies and best practices; and make recommendations to support the safety and well-being of inmates and employees, among other responsibilities. Establishes the Corrections Oversight Committee to advise the Ombudsman and sets out requirements for membership.
- Directs the Secretary of Public Safety and Homeland Security, in collaboration with the Secretary of Education and the Secretary of Health and Human Resources, with the assistance of VACo and VML, to submit a report by October 15, 2024, on juvenile detention center cost savings strategies, which is required to include a proposal to reduce state assistance in order to incentivize consolidation of juvenile detention centers in the Commonwealth and recommendations for consolidation of five to eight juvenile detention centers.
- Directs the Department of Juvenile Justice to provide a report on the impact of revisions to the guidelines for determining length of stay for juveniles who are indeterminately committed to the Department, to include an analysis of the impact of the guidelines on staffing ratios and bed space, as well as options for meeting the Department’s anticipated capital and operating needs. The report is due December 1, 2023.
- Reduces Cannabis Control Authority funding by $5.9 million; authorizes the Department of Planning and Budget to transfer up to $2.5 million in balances from funding provided in 2021 for start-up costs for the Authority to cover the one-time costs of a seed-to-sale tracking system.
- $1.3 million GF for probation and parole positions to offset declining special fund revenue.
- $1.3 million for the Crime Victim-Witness Fund.
- $5 million for the Firearm Violence Intervention and Prevention Fund to support implementation of evidence-informed gun violence intervention and prevention efforts.
- $15 million for the Operation Ceasefire Grant Fund, which is used to implement violent crime reduction strategies, provide equipment for law enforcement agencies, and award grants to organizations that are involved in group violence intervention efforts.
- $10 million for the Safer Communities Program to support holistic, community-based strategies that address the root causes and conditions of community violence.
- $95,000 to contract with Impact Living Services for the Impact First Responders program to provide education and training related to trauma, resiliency, and critical incident stress management, as well as peer and mental health support to first responders.
- $1 million for a witness protection program; the Department of Criminal Justice Services is directed to work with law enforcement and other stakeholders to develop an application process to award grants, which will be used to provide assistance of up to 90 days to witnesses to defray their costs for lodging, medical, transportation, food, and other expenses.
- $103,800 to the Department of Fire Programs for electric vehicle firefighter training.
- $452,682 for the Virginia State Police to provide expanded impaired driving training for state and local law enforcement.
- $10 million for victims of mass violence; directs DCJS to convene a workgroup to assess gaps in available services for victims of crimes, especially mass violence events, and identify specific options to ensure that individuals affected by violence are able to cover health and mental health expenses that are not covered by insurance.
- Directs $644.5 million in mandatory deposits to the Water Quality Improvement Fund from FY 2022 and FY 2023 to the following uses: $338.4 million to the Natural Resources Commitment Fund; $100 million to the Resilient Virginia Revolving Loan Fund; $25 million for dam safety improvements; $151 million towards the Enhanced Nutrient Removal Certainty program; and $30 million to the Stormwater Local Assistance Fund (of which $1 million is to be directed to York County and $9 million to the City of Falls Church for specific projects).
- $71 million in ARPA State and Local Fiscal Recovery Funds in FY 2024 for the Enhanced Nutrient Removal Certainty Program.
- Directs the Department of Rail and Public Transportation, with assistance from the Virginia Economic Development Partnership, to evaluate rail-centric economic development opportunities in the Bedford, Campbell, and Lynchburg region of central Virginia.
- Allocates funding previously appropriated to the State Trails Office to specific trails.
- Appropriates $150 million in excess FY 2022 revenues to Interstate 64 improvements, as authorized by the 2022 Appropriation Act.
- Transfers $75 million in uncommitted balances from the Virginia Transportation Infrastructure Bank to the Transportation Partnership Opportunity Fund to support major economic development initiatives.
- Deposits $289.6 million from excess FY 2023 revenues to the Revenue Reserve Fund.
- Provides an individual income tax rebate of $200 for individuals and $400 for married filers, up to the amount of the filer’s tax liability after the application of deductions, subtractions, or credits.
- Increases the standard deduction to $8500 single/$17,000 married, beginning in tax year 2024, contingent on withholding collections meeting the forecast for July-December 2023.
- Removes the age limit for the military retirement benefit income tax subtraction, beginning with tax year 2024.
- Increases the business interest deduction from 30 to 50 percent, beginning with tax year 2024.
- Reinstates the sales tax holiday for energy/water efficient products, school supplies, and hurricane preparedness equipment through July 1, 2025; for 2023, the holiday is October 20-23.
- Language clarifies that fixtures in a data center, when classified as real estate, are to be valued by a locality based on the cost approach, as required by legislation enacted in 2022.
- Authorizes the Department of General Services (DGS) to construct a water supply line (the “Commonwealth Line”), which will be owned and operated by Prince Edward County, to be located in Nottoway and Prince Edward Counties, and towns located within the boundaries of Nottoway and Prince Edward Counties, to serve the needs of the Piedmont Geriatric Hospital, Virginia Center for Behavioral Rehabilitation (Phases 1 and 2) and Nottoway Correctional Center. The language also (1) authorizes DGS “…to acquire by purchase, gift or power of eminent domain such lands, structures, rights-of-way, franchises, easements and other interests in lands of any person, association, partnership, corporation, railroad, public service, public utility, municipality or political subdivision to construct, provide and operate the Commonwealth Line in the Localities, all without obtaining the consent or permission of any locality or public body …”; (2) declares that the “… ownership, construction and operation of the Commonwealth Line by DGS shall not be subject to any state or local permitting requirements or similar ordinances or regulations.”; and (3) authorizes DGS to transfer ownership and/or authorization of the line to Prince Edward County without “… the consent or permission of any locality or public body.”
- $250,000 for the Secretary of Finance to evaluate potential economic incentives to attract sports teams to the state.
VACo Contacts: VACo Legislative Team