The 2018 Finance Forum, an event co-sponsored by VACo and VML, was held on January 3 and featured presentations from state and local experts on a variety of topics of importance to local budgets in advance of the January 10 start of the 2018 General Assembly session. Among the key topics of discussion at the Forum were the Governor’s introduced budget and its implications for localities (including the status of the Virginia Retirement System’s teacher and political subdivision plans); methods of identifying and alleviating local fiscal stress; and the results of a survey of local fiscal conditions.
Sarah Herzog, Interim Deputy Director for the Senate Finance Committee, provided an overview of the key elements of the Governor’s introduced budget, including the major proposed spending and savings items. She noted that there are a number of potential challenges to be resolved during the 2018 session, including how the savings assumed in the budget related to the proposed expansion of Medicaid would be addressed if the General Assembly did not approve the proposal. She also presented information on the Standards of Quality rebenchmarking funding that is included in the introduced budget, and discussed current efforts and possible future strategies to address the recruitment and retention of qualified teachers in Virginia.
Jim Regimbal, Principal, Fiscal Analytics, discussed items of interest to localities in the introduced budget and highlighted some of the major pressures on state finances, including Medicaid and debt service, and their implications for state assistance to local governments. He offered several suggestions for ways to alleviate some stresses on the state budget and strengthen the state-local funding partnership, including addressing infrastructure needs, modernizing the state’s tax system, enhancing local taxing authority and providing additional economic development tools to localities.
Patricia Phillips, Director of Finance for the City of Virginia Beach, discussed the process for identifying financially-stressed localities that was recently developed by the Auditor of Public Accounts at the direction of the General Assembly, and offered advice on how local financial health can be gauged in both short-term and long-term contexts. VRS Director Patricia Bishop provided an update on the 2017 valuations of the state’s retirement plans, which resulted in lower employer contribution rates for the teacher plan and for a majority of local political subdivision plans for the 2018-2020 biennium. VRS Chief Financial Officer Barry Faison discussed the implementation of the Governmental Accounting Standards Board’s Statements 74 and 75, dealing with financial reporting of post-employment benefits other than pensions.
Jeff Schapiro of the Richmond Times-Dispatch offered his analysis of the 2017 election and the implications of a closely-divided legislature for the policy debates expected to take place during the 2018 session. VML-VACo Finance Managing Director Robert Lauterberg concluded the meeting by presenting the results of a recent survey of county administrators and city and town managers on their localities’ current fiscal condition as well as their expectations for the future.
PRESENTATIONS FROM THE FINANCE FORUM
STATE BUDGET AND REVENUE OUTLOOK | Sarah Herzog | Legislative Fiscal Analyst | Senate Finance Committee
2018-2020 STATE GENERAL FUND BUDGET: WHERE DOES LOCAL GOVERNMENT GO FROM HERE? | Jim Regimbal | Principal | Fiscal Analytics
LOCAL RETIREMENT AND TEACHER RETIREMENT SYSTEMS: WHAT’S BEHIND THE NEW RATES AND WHAT IS THE FUTURE LIKELY TO BRING? | Patricia Bishop | Director | Virginia Retirement System
FISCAL STEWARDSHIP: WHAT YOU NEED TO KNOW AND WHAT YOU NEED TO DO AS AN ELECTED OFFICIAL | Patti Phillips | Director of Finance | City of Virginia Beach
VIRGINIA LOCAL FISCAL CONDITIONS: SURVEY RESULTS | Robert W. Lauterberg | Managing Director | VML/VACo Finance
VACo Contact: Katie Boyle