Va. economy sputters along; revenues hold steady, but …

While tax collections met revised forecast, fourth quarter could prove to be a rough ride

Why a housing slump matters A slumping housing market affects: Recordation tax collections Sales tax collections Income taxes from people whose livelihoods depend on building, buying and financing homes.

Secretary of Finance Jody Wagner offered the House Appropriations Committee mixed economic news last week. The state unemployment rate remained unchanged in February from January’s 3.8 percent. And, the Virginia Leading Index (comprised of growth in vehicle registrations, building permits, and initial unemployment claims) edged up 0.3 percent in February. This is the second increase in three months. The leading index rose in eight of Virginia’s 11 metro areas, dropping only in Harrisonburg, Danville and Lynchburg.

But the housing market continues to slow. Wagner said that pending home sales in Northern Virginia, Hampton Roads, and Richmond are down 27 percent from prior year levels. These three major metropolitan areas make up some 70 percent of total recordation taxes. Average sale prices are also in decline, dropping 4 percent in Northern Virginia and 17 percent in Richmond for the period of December 2006 to December 2007. The average sales price did increase by a modest 2 percent in Hampton Roads for the same period.

National economic events, however, point to a weakening economy, particularly in job market contractions, the lowest level of consumer confidence since October 1993, and the fifth consecutive monthly decline of leading indicators according to the Conference Board, which is a preeminent business research organization.

In terms of revenue collections, the revised general fund forecast, which was adopted by the General Assembly in March, calls for revenue growth of 1.2 percent in FY08. Year-to-date collections from July 2007 through March 2008 show an increase of 2.5 percent over FY07.

Collections of individual withholding and non-withholding are tracking slightly ahead of their respective forecasts, but the majority of non-withholding taxes will not be collected until the fourth quarter. Also, April is the month in which the most individual income tax refunds are issued.

Sales and recordation tax collections are trailing their annual estimates. On a year-to-date basis, sales and use taxes have increased 1 percent, trailing the revised forecast of 1.6 percent growth. Recordation taxes fell 27.5 percent in March. Recordation tax collections for the first three quarters declined 20.2 percent, compared with the revised forecast for a 15 percent annual decline.

The last three months of the fiscal year, particularly April and May, are significant collection months. Estimated and final payments from both corporations and individuals are due in April and May, and estimated payments are again due in June.

With the increased public interest in transportation revenues, the finance secretary’s March report shows that transportation revenues from all sources have increased 9.9 percent this fiscal year. The projection for the Highway Maintenance and Operating Fund and the Transportation Trust Fund, however, calls for an annual increase of 18.2 percent. More than $265 million of state transportation dollars have been transferred thus far from the Transportation Trust Fund to cover the revenue shortfall for the road maintenance budget. In FY09, the administration estimates that more than $380 million will have to be transferred from new road construction for maintenance services at the state and local levels. contents

Va. Supreme Court upholds subdivision regulation rules

The Virginia Supreme Court has upheld the right of local governing bodies to delegate subdivision ordinance decisions to professional staff and planning commissions.

The court ruled April 18 in Logan v. City of Roanoke that the city’s subdivision administrator had proper authority to negotiate and approve the details of the layout of a new neighborhood. Had the court ruled against the city, local governing bodies would have been faced with the prospect of deciding every detail of every subdivision and site plan at regular council and board meetings.

In the Logan case, a developer proposed construction of a housing project that upset the neighbors. The neighbors sued, arguing, among other things, that the city council alone had authority to make decisions about the subdivision ordinance, and could not delegate the decisions to anyone else. When the city was negotiating the terms of the project, such as curb cuts, cul-de-sac lengths, street widths, the subdivision administrator made the decisions, not the city council. This is the same basic process used in most localities.

The neighbors who filed the suit hung their hats on Va. Code § 15.2-2255, which states: “The administration and enforcement of subdivision regulations insofar as they pertain to public improvements as authorized in §§ 15.2-2241 through 15.2-2245 shall be vested in the governing body of the locality in which the improvements are or will be located. … Except as provided above, the governing body shall be responsible for administering and enforcing the provisions of the subdivision regulations through its local planning commission or otherwise.”

The neighbors argued that the words in the first sentence “shall be vested in the governing body…” restricted the decisions to the governing bodies. The court explained that the first sentence means that when a project is in two localities, the governing body where “improvements are” has responsibility for those improvements.

The Virginia Municipal League, along with the Association of Counties and the Local Government Attorneys of Virginia filed an amicus brief on the issue, arguing the public policy of allowing delegation to staff, in order to not bog down the governing bodies with every decision in every subdivsion, was valid and necessary. contents

Crime Commission sets ’08 work plan

The State Crime Commission revealed its list of studies for 2008 at a meeting on April 23.

Several of the studies, some of them in their second year, are of interest to cities, towns and counties. The topics covered in the studies include gang statutes, juvenile justice, animal control officers and the gun show loophole. In addition, the commission recommended that the Senate Finance Committee study state reimbursement for jail construction.

A complete list of the studies should be posted on the commission’s Web site soon. The commission also set its meeting schedule for the remainder of 2008. The commission will meet Sept. 9, Oct. 14 and Dec. 9. contents

Go Green forums prove success; ‘Challenge’ participation swells

More than 220 local officials from across the state participated in the Virginia Municipal League’s four Go Green Regional Forums that concluded on Tuesday in Lynchburg. The forums were also held in Virginia Beach, Fairfax County and Abingdon earlier in April.

For participants, the four daylong forums provided an outstanding opportunity to learn more about some of the most important trends in reducing energy consumption and promoting sustainability.

In addition, twenty-six VML member local governments of all sizes have now registered to participate in the Green Government Challenge, another part of VML’s Go Green Virginia initiative. The challenge is a friendly competition that encourages local governments to implement environmental policies and practical actions that reduce carbon emissions. Many of these actions will save local governments money.

Signing up for the Challenge is fast, easy and free. Cities, towns and counties that participate in it can become a VML-certified “Green Government.” They’ll also be eligible to compete for cash prizes. Moseley Architects, a VML sustaining member, will award $18,000 in prize money to the highest scorers in each of three population categories.

The inaugural “Moseley Architects Go Green Virginia Awards” will be presented at the 2008 VML Annual Conference in Norfolk, Oct. 19-21. Use the award money to help create a sustainable future in your community. Local governments will have until Sept. 30 to complete the Challenge and to submit it. If your city, town or county has not signed up yet to participate, do so now!

To learn more about the Green Government Challenge and the Go Green Virginia initiative, log-on to www.GoGreenVa.org.

Green Government Challenge participants as of April 30

• Abingdon
• Alexandria
• Arlington County
• Blacksburg
• Charlottesville
• Chesapeake
• Crewe
• Dumfries
• Fredericksburg
• Front Royal
• Town of Halifax
• Hampton
• Haymarket
• James City County
• Kilmarnock
• Loudoun County
• Middleburg
• Radford
• City of Roanoke
• Roanoke County
• Salem
• Stephens City
• Strasburg
• Williamsburg
• Winchester
• York County contents
  
  

Town Section meetings to be held in May

VML will hold four Town Section meetings across the state in May.

VML staff will brief town officials on how the actions of the 2008 General Assembly will affect their communities. In addition, staff will brief Town Section members on: the new role for towns pertaining to land use law; the Go Green Virginia environmental initiative; a refresher on laws pertaining to FOIA and conflicts of interest; the VML Model Personnel Manual; and an overview of existing VML service programs benefiting towns.

The meetings will be held on Thursday, May 8, at the Farmville Train Station; Friday, May 9, at Lowery’s Seafood Restaurant in Tappahannock; Thursday, May 22, at the Town Hall in Bridgewater; and Thursday, May 29, at the new Wytheville Meeting Center.

Each meeting will begin at 11 a.m. and will include lunch. A registration form was mailed to all town council members and managers. contents

Action urged on collective bargaining legislation

There is no substitute for a local elected official calling the office of a congressmen or a senator to influence the outcome of federal legislation. That was the message delivered by National League of Cities Chief Lobbyist Carolyn Coleman on April 26 at a meeting of the Southern Municipal Conference in Wilmington, N.C.

Coleman urged local officials representing 13 southern municipal leagues to contact their legislators in opposition to the collective bargaining legislation (SR 2123) that is before the U.S. Senate. Comparable legislation (HR 980) has already passed the House.

SR 2123 would:

• establish the right of every public safety officer to form and join a labor union;
• force states and local governments to recognize the employee’s labor union;
• grant public safety officers the right to bargain over hours, wages, and the terms and conditions of employment, including pensions and health benefits;
• provide for an impasse resolution process such as arbitration;
• grant the Federal Labor Relations Authority (FLRA) the sole power to determine if a state is in compliance with the act and its regulations; and
• direct state courts to enforce these rights.

Additional information on the legislation, including a model letter and a briefing paper, can be found on NLC’s Legislative Action Center page.

Coleman said the bill clearly undermines the sovereignty of state and local governments. NLC is working with national associations of counties, chiefs of police and sheriffs in opposition to the bill, but unfortunately some of the national governmental organizations, including the governors, state legislatures and mayors, have not taken a position. President George W. Bush has not taken a public position as well.

Coleman said the bill was a good example of the mood in Washington, in which policy considerations take a back seat to political considerations. The legislation also shows what happens when groups are not successful in getting their agenda adopted: they push their agenda at the national level. These points are interesting in that the same happens at the state level.

In addition to Coleman’s presentation, VML President and Arlington Board Member Jay Fisette presented information on VML’s Go Green Virginia initiative. contents

Intended Regulatory Action

Virginia Stormwater Management Permit (VSMP) Regulations. The Virginia Soil and Water Conservation Board has proposed action to consider amendments to the applicable portions of the VSMP regulations in order to develop a new general permit for stormwater discharges from construction activities. Regulations developed under the federal Clean Water Act and the Code of Virginia require that VSMP permits be effective for a fixed term not to exceed five years. The existing five-year general permit was issued on July 1, 2004, thus necessitating the promulgation of a new general permit by June 20, 2009, expiration date. A public hearing will be held. Contact David Dowling, Department of Conservation and Recreation, at 804/786-2291 or e-mail him at david.dowling@dcr.virginia.gov for additional information.

Proposed Regulations

Water Quality Standards. The State Water Control Board has proposed regulations because State and Federal mandates in the Clean Water Act of the Code of Virginia require that water quality standards be adopted, modified or cancelled every three years. The most important potential changes to the water quality standards are a narrative criterion to recognize that certain waters in the Commonwealth are naturally low in dissolved oxygen and pH (swamp waters), and updates to the toxics and bacteria criteria and special standards to reflect site-specific conditions. There are changes to many other sections of the regulation during this review. These include the updates to the Chesapeake Bay nutrient related criteria, updates to stream classifications in the river basin section tables, deletions to sections that are unused or no longer needed, and miscellaneous updates and clarifications. Public hearings will be held. For more information, contact Jean Gregory, Department of Environmental Quality, at 804/698-4113 or e-mail her at jwgregory@deq.virginia.gov. contents

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