House and Senate Approve Budget Proposals

October 2, 2020

The House Appropriations and Senate Finance and Appropriations Committees reported their respective budgets on Friday, September 25.  The House passed its budget on September 29, and the Senate approved its version on October 2, moving toward the appointment of a conference committee to resolve differences between the two proposals.  Both budgets applied savings strategies to enable restoration of certain spending items that had been unallotted (frozen) at the April reconvened session and subsequently proposed for elimination in the Governor’s August budget, and to fund criminal justice legislation that has been passed by each chamber.  Similarly, both budgets propose additional spending, but condition this funding on revenues meeting certain targets.  Both budgets propose to direct the spending of federal Coronavirus Relief Fund dollars that were provided to the state in the CARES Act but not yet allocated by the Administration.

While both chambers reshaped the Governor’s proposed budget, their priority spending items differ, as discussed below.  They also differ in their approach to contingent appropriations.  The House provides for approximately $20 million in contingent spending in FY 2021, provided the December revenue forecast is no more than $100 million below the August forecast.  An additional $187 million in spending would be authorized for specified items in FY 2022, provided that FY 2021 General Fund (GF) collections meet the revenue forecast.  The Senate includes a prioritized list of spending items for FY 2022 to be funded by revenue in excess of the FY 2021 forecast.

Charts provided below by the House Appropriations and Senate Finance and Appropriations Committees, respectively, outline the differing priorities for use of the remaining Coronavirus Relief Fund dollars.





Following is a comparison of the two budget proposals in areas of interest to local governments.

K-12 Education
House

  • Redirects $8.9 million in federal Governor’s Emergency Education Relief fund dollars provided through the CARES Act that had previously been designated for longer-term internet access initiatives to support technology needs and internet access for virtual learning resulting from school closures. (Item 141 #1h)
  • Provides $95.2 million in FY 2021 from taxes on “gray machines” (“games of skill” temporarily allowed to continue operations, subject to a monthly tax on each machine) to hold school divisions harmless from losses that would otherwise be incurred as a result of the sales tax reforecast. VACo supported holding school divisions harmless from these potential mid-fiscal year reductions.  (Item 145 #1h and Item 479.20 #1h)
  • Language provides flexibility to school divisions in staffing English learner and school counselor positions in the first year of the biennium. Staffing flexibility for support positions, which had been included in the Appropriations Act since 2010, had been proposed to be eliminated during the 2020 regular session.  VACo requested restoration of this flexibility, which was partially addressed in the budget enacted in March.  (Item 145 #2h)
  • Includes language delaying the implementation of restrictions on the use of the new Infrastructure and Operations Per Pupil distribution for one year. During the 2020 regular session, the General Assembly restructured the lottery per-pupil distribution to require a certain portion of funds to be used for non-recurring expenditures (30 percent of funds in FY 2021 and 40 percent of funds in FY 2022). VACo requested restoration of this flexibility earlier this year. (Item 145 #3h)
  • Authorizes school divisions to use textbook payments in FY 2021 to address costs related to school reopening or virtual learning and waives local match requirements for these funds. (Item 145 #4h)
  • Provides that semi-monthly payments to school divisions would not be reduced in January as a result of potential reductions in September average daily membership counts. This language prevents school divisions from experiencing reductions in state payments in the middle of the fiscal year and allows the issue to be revisited after average daily membership is calculated in March.  VACo strongly supported this provision.  (Item 145 #5h)
  • Directs $200 million in Coronavirus Relief Fund dollars to be distributed to school divisions on a per-pupil basis to assist with costs associated with the pandemic, such as implementing social distancing measures and supporting distance learning. (Item 479.10 #1h)

Senate

  • Provides $95.2 million in FY 2021 from taxes on “gray machines” to hold school divisions harmless from losses that would otherwise be incurred as a result of the sales tax reforecast. Unlike the corresponding House language, which allows for monthly distributions, payments to local school divisions will not be made until the end of the FY 2021. VACo supported holding school divisions harmless from these potential mid-fiscal year reductions.  (Item 145 #1s and Item 479.10 #2s)
  • Directs $200 million from the Coronavirus Relief Fund to local school divisions to provide temporary financial assistance in responding to the pandemic (does not specify the distribution method). (Item 479.10 #1s)
  • Contingent on GF collections through June 15, 2021, exceeding the August revenue forecast, includes restoration of $35.2 million GF in FY 2022 for At-Risk Add-On funding and $48.3 million GF in FY 2022 to maximize VPI slots for three and four-year-olds in the list of priority items to be funded from the surplus revenue. (Item 479.20 #1s)

Compensation
House

  • Provides funding for a $1500 bonus for state employees and a 1.5 percent bonus for state-supported local employees, effective September 1, 2021, provided that the revenue reforecast included in the Governor’s December budget is no more than $100 million below the August 2020 revenue forecast and that GF revenue collections meet this forecast. (Item 479.30 #1h)

Senate

  • Provides $18.4 million GF in FY 2021 for a $500 bonus for sworn law enforcement personnel of state agencies, sworn constitutional officers and their staffs, and sworn officers of local police departments, effective December 1, 2020. (Item 477 #1s)
  • Contingent on GF collections through June 15, 2021, exceeding the August revenue forecast, specifies that 2 percent bonus payments for state employees, constitutional officers and their employees, state-supported local employees, and the state share of funded SOQ instructional and support positions would be included in the list of priority items to be funded from the surplus revenue; bonus payments would be provided August 1, 2021. (Item 479.20 #1s)

Judiciary/Public Safety
House

  • Provides $102,000 GF in FY 2021 and $3.4 million in FY 2022 for the Department of Behavioral Health and Developmental Services (DBHDS) to implement the “Marcus Alert” system, and a total of $224,000 GF over the biennium for costs in the Department of Criminal Justice Services (DCJS). The General Assembly is considering legislation that would create this system, which seeks to ensure that when law enforcement is called to respond to a situation in which an individual is experiencing a behavioral health crisis, that individual is provided with treatment, with the goals of reducing arrests and use of force by law enforcement and accelerating access to care for individuals in crisis. (Item 479.40 #1h)
  • Directs the Secretary of Public Safety and Homeland Security to establish an E-911 Border Response Workgroup to assess deficiencies related to the timely routing of E-911 calls to the appropriate Public Safety Answering Point across state or county borders. (Item 391 #1h)
  • Restores funding for an executive director and an investigator for the Board of Local and Regional Jails (formerly the Board of Corrections), which had been unallotted in April. (Item 482.20 #6h)
  • Contingent on the December revenue forecast being reduced by no more than $100 million below the August revenue forecast, restores $500,000 GF in FY 2021 for pre-release and post-incarceration services; if GF revenue collections meet the forecast for FY 2021, restores $1 million in FY 2022. (Item 479.30 #1h)

Senate

  • Provides approximately $59,000 GF over the biennium to fund the Commission on Civil Rights and Policing, which would be created pursuant to legislation under consideration this session. (Item 27.50 #1s)
  • Provides approximately $350,000 GF over the biennium for DBHDS costs associated with the “Marcus Alert” system and approximately $184,000 GF over the biennium for implementation costs at DCJS. (Item 320 #1s, Item 404 #1s)
  • Restores $5.7 million GF in FY 2021 and $7.6 million GF in FY 2022 for district court clerk positions that were unallotted in April. (Item 482.20 #7s)
  • Restores $3.8 million GF in FY 2021 and $5.7 million GF in FY 2022 for additional public defender positions that were unallotted in April. (Item 482.20 #8s)
  • Provides funding for a part-time jail investigator for the Board of Local and Regional Jails. (Item 402 #2s)
  • Provides $6.4 million GF in FY 2021 for grants to law enforcement agencies for one-time costs associated with purchasing, operating, and maintaining body-worn camera systems. Provides funding for a coordinator to manage the program.  Language stipulates that a local match would be required for grants.  (Item 406 #1s)
  • Restores $1.2 million GF in FY 2021 and $2.3 million GF in FY 2022 for pretrial and probation services. This funding provides for programs to be established in localities currently lacking such programs, and had been included in the budget as passed in the 2020 regular session, but was unallotted in April.  (Item 482.20 #26s)
  • Restores $500,000 GF in FY 2021 and $1 million GF in FY 2022 for pre-release and post-incarceration services. This funding had been included in the budget as passed in the 2020 regular session, but was unallotted in April.  (Item 482.20 #27s)

Elections
House

  • Directs the distribution of $10 million in Coronavirus Relief Funds to general registrars’ offices on the basis of population to assist with additional printing and mailing costs, drop boxes, temporary staffing, polling place cleaning, and other costs associated with assuring voter safety during the pandemic. (Item 479.10 #1h)

Senate

  • Includes language implementing the provisions of the constitutional amendment establishing the Virginia Redistricting Commission, contingent on passage of the amendment at the November general election. (Item 4-14 #3s)

Economic Development/Workforce
House

  • Directs the Department of Small Business and Supplier Diversity to examine the program eligibility criteria and maximum grant award to ensure that funds allocated to the Rebuild Virginia Grant program are deployed prior to the expiration of the federal Coronavirus Relief Funds, and directs the Department to expand the eligibility criteria to allow small business that have already received CARES Act funding from other sources to qualify. (Item 128 #1h)
  • Redirects $2 million GF in FY 2021 from a proposed increase in the Virginia Jobs Investment Program to support workforce programs offered through the Virginia Community College System and Richard Bland College in partnership with the VA Ready program. (Item 221 #1h and Item 482.20 #3h)
  • Directs $210 million from the federal Coronavirus Relief Fund in FY 2021 to provide additional support for the state’s Unemployment Insurance program, and directs the Governor to work with the Virginia Employment Commission to determine the best use of the funds. (Item 479.10 #1h)

Senate

  • Provides $350,000 GF per year for additional staff at the Virginia Employment Commission to respond to legislative and judicial inquiries. (Item 131 #1s)
  • Includes language authorizing the Governor to deposit remaining Coronavirus Relief Funds (after their use for purposes specified elsewhere) into the Unemployment Trust Fund, if permissible by law. (Item 479.10 #1s)

Broadband
House

  • Makes restoration of $16 million in FY 2022 for the Virginia Telecommunication Initiative (VATI) contingent on the FY 2021 revenue forecast being met (this funding was unallotted in April but proposed to be restored in the Governor’s August budget amendments). (Item 114 #2h, Item 479.30 #1h)
  • Includes language establishing a one-year pilot project in FY 2022 that allows DHCD to fund local government projects without a private sector partner, if they address an unserved community’s lack of access to telehealth or virtual learning platforms. VACo supports this flexible use of VATI funds to address the lack of broadband infrastructure in unserved areas. (Item 114 #1h)

Housing
House

  • Designates $25 million from the Housing Trust Fund in FY 2021 to continue the Virginia Rent and Mortgage Relief Program after the expiration of federal Coronavirus Relief Funds in December 2020; includes language providing that financial assistance may be provided with these funds for past-due rent accumulated prior to April 1, 2020, and allowing landlords and tenants to access the program. (Item 113 #1h)
  • Makes restoration of $23 million GF for the Housing Trust Fund in FY 2022 contingent on meeting the FY 2021 revenue forecast. This funding was unallotted in April but proposed to be restored in the Governor’s August budget amendments.  (Item 113 #2h, Item 479.30 #1h)
  • Sets out requirements for certain landlords to provide the opportunity for tenants affected by the state of emergency to enter into a payment plan; these provisions apply while the Centers for Disease Control and Prevention’s order preventing residential evictions is in effect. Provides that landlords are barred from terminating residential tenancies during a state of emergency due to a communicable disease of public health threat when tenants are affected by the state of emergency, except under certain circumstances.  (Item 4-14 #1h)

Senate

  • Sets out requirements for certain landlords to provide the opportunity for tenants affected by the state of emergency to enter into a payment plan; these provisions apply while the Centers for Disease Control and Prevention’s order preventing residential evictions is in effect. Provides that landlords are barred from terminating residential tenancies during a state of emergency due to a communicable disease of public health threat when tenants are affected by the state of emergency, except under certain circumstances (Item 4-14 #1s)

Aid to Local Public Libraries
House

  • Provides $1 million GF in FY 2021 for local libraries to provide broadband access, job search assistance, and virtual learning. (Item 247 #1h)

Child Care/Early Childhood
House

  • Provides $16.6 million in federal Coronavirus Relief Funds in FY 2021 to supplement the $16.6 million GF that was proposed in the Governor’s August budget to contract with local partners to support child care; provides that the federal funds are to be expended prior to the GF allocation. (Item 350 #1h, Item 479.10 #1h)
  • Directs $60 million in federal Coronavirus Relief Funds to be used to provide stabilization grants to licensed child care providers, with the goals of preserving the long-term capacity of the child care system during the pandemic and providing additional child care slots in the near term.  (Item 479.10 #1h)

Senate

  • Directs $20 million in federal Coronavirus Relief Funds to be used for child care stabilization grants. (Item 479.10 #1s)
  • Includes restoration of $48.4 million for pre-K for at-risk three- and four-year olds on the list of priority spending items to be restored with revenues exceeding the August forecast (Item 479.20 #1s)

Children’s Services Act
Senate

  • Restores $250,000 GF in FY 2021 for completion of the rate study for private day placements originally directed by the 2018 General Assembly (this funding was unallotted in April). (Item 482.20 #15s)
  • Includes language barring local Community Policy Management Teams from reducing rates for private day placement services during the 2020-2021 school year as long as the placement is providing a free and appropriate public education, unless agreed to by the provider. This language is problematic, as it would bar localities from reducing rates for services that are not able to be provided in accordance with local contracts, without requiring that the services provided be comparable to the stipulations of the contract.  (Item 293.10 #1s)

Behavioral Health
House

  • Provides $882,000 GF per year in partial restoration of funding for the Virginia Mental Health Access Program (which supports children’s access to mental health care); $4.2 million GF per year to move the program toward statewide implementation had been unallotted in April. (Item 321 #1h)
  • Restores $3.75 million GF per year for public-private partnerships to reduce the census in state hospitals (this action would restore half of the funding included in the budget passed in March, but unallotted in April). (Item 482.20 #5h)

Senate

  • Restores $2.1 million in FY 2021 and $4.2 million in FY 2022 for the Virginia Mental Health Access Program. (Item 482.20 #22s)
  • Restores $7.5 million GF in FY 2021 and $10 million GF in FY 2022 for discharge assistance plans to assist in providing community-based services for individuals at state hospitals who are clinically ready for discharge (the budget passed in March included $7.5 million in FY 2021 and $12.5 million in FY 2022 for this purpose, which was unallotted in April). (Item 482.20 #19s)
  • Provides $2.5 million GF in FY 2021 and $5 million GF in FY 2022 in partial restoration of funding for public-private partnerships to reduce the census in state hospitals (the budget passed in March included $7.5 million per year for this purpose, which was unallotted in April). (Item 482.20 #20s)
  • Restores $11.5 million GF in FY 2022 for crisis services as part of STEP-VA, including $6.8 million for mobile crisis and $4.7 million for crisis dispatch to assist in implementation of the Marcus alert system under consideration by the legislature. $19.1 million in FY 2021 and $30.1 million in FY 2022 for STEP-VA had been unallotted in April.  (Item 482.20 #23s)
  • Restores $3 million GF in FY 2021 and $12 million in FY 2022 for permanent supportive housing ($8.5 million in FY 2021 and $17 million in FY 2022 had been unallotted in April). (Item 482.20 #21s)
  • Contingent on GF collections through June 15, 2021, exceeding the August revenue forecast, includes the following items in the list of priorities to be funded from the surplus revenue in FY 2022: $5 million for permanent supportive housing; $18.6 million for implementation of STEP-VA; $2.5 million to increase mental health provider rates; $10.3 million to enhance behavioral health services covered by Medicaid; $7.6 million to increase Medicaid rates for psychiatric residential treatment facilities.  (Item 479.20 #1s)

Social Services
Senate

  • Contingent on GF collections through June 15, 2021, exceeding the August revenue forecast, includes partial restoration of $17.4 million GF for prevention services at local departments of social services in the list of priorities to be funded from the surplus revenue in FY 2022. (The budget as passed in March contained $12.5 million in FY 2021 and $17.4 million in FY 2022, which was unallotted in April.) (Item 479.20 #1s)
  • Restores approximately $580,000 GF in FY 2021 and $1.2 million GF in FY 2022 to fund a 15 percent increase in the Temporary Assistance to Needy Families cash assistance payment to two-parent families, beginning January 1, 2021 (a similar increase was provided to most TANF families beginning July 1, 2020, but the two-parent cash assistance is funded with GF dollars and the proposed funding was unallotted in April). (Item 482.20 #24s)

Natural Resources
House

  • Eliminates language included in the Governor’s budget proposing a study to develop a plan for landfill operators to pay a solid waste disposal fee. VACo had opposed this study language.  (Item 372 #1h)
  • Modifies language in the Governor’s budget establishing a workgroup to review the long-term sustainability of the water quality enhancement fee. (Item 377 #1h)
  • Limits language adopted at the reconvened session in April dealing with mitigation agreements for projects having a potential adverse impact on fish and wildlife so that the authority to require certain mitigation measures is limited to the Hampton Roads Bridge Tunnel Project. (Item 383 #1h)

Senate

  • Eliminates language included in the Governor’s budget proposing a study to develop a plan for landfill operators to pay a solid waste disposal fee. VACo had opposed this study language. (Item 372 #1s)
  • Modifies language in the Governor’s budget establishing a workgroup to review the long-term sustainability of the water quality enhancement fee. (Item 377 #1s)
  • Limits language adopted at the reconvened session in April dealing with mitigation agreements for projects having a potential adverse impact on fish and wildlife so that the authority to require certain mitigation measures is limited to the Hampton Roads Bridge Tunnel Project. (Item 383 #1s)

Transportation
House

  • Requires the Secretary of Transportation to report to the Governor and the Chairs of the “money committees” on actions taken by the Commonwealth Transportation Board to reallocate transportation funding among projects due to declining transportation revenues. (Item 430 #1h)

Reserves
House

  • Eliminates $89 million proposed deposit to the Revenue Stabilization Fund in FY 2022 (for the deposit that would be made in FY 2024), and redirects the funds to the Revenue Reserve Fund as part of a $150 million deposit in FY 2021. (Item 274 #1h and Item 275 #1h)

Other
House

  • Includes language barring utility providers, including water and wastewater providers, from disconnecting service to residential customers for nonpayment of bills or fees until a determination by the Governor that such a prohibition is not necessary or until 60 days after the end of the state of emergency. Requires utilities to offer customers a repayment plan for past-due accounts.
  • Provides an exemption from the moratorium under certain circumstances in which the utility has arrearages in its accounts receivable exceeding 1 percent of its annual operating revenues.
  • Provides $120 million in Coronavirus Relief Funds to offset debts for customers more than 30 days in arrears. (Item 4-14 #2h, Item 479.10 #1h)

Senate

  • Includes language barring utility providers, including water and wastewater providers, from disconnecting service to residential customers for nonpayment of bills or fees until a determination by the Governor that such a prohibition is not necessary or until 60 days after the end of the state of emergency. Requires utilities to offer customers a repayment plan for past-due accounts.
  • Provides an exemption from the moratorium under certain circumstances in which the utility has arrearages in its accounts receivable exceeding 1 percent of its annual operating revenues. (Item 4-14 #2s)

VACo Contact:  VACo Legislative Team

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