2007 session grinds to a close

The 2007 session of the General Assembly adjourned as scheduled on Saturday evening. VML’s legislative staff will provide an analysis of the most important bills that passed, including the budget, later this week. A detailed Legislative Report on all of the legislation of interest to local governments will be completed in about three weeks.

Budget conference report approved

The House and Senate approved changes to the two-year state budget that were worked out by a conference committee. VML will provide a detailed summary of the conference report later this week.

Highlights include:

• Additional funding to the HB 599 program to be used as a “hold harmless” for those local governments that otherwise would lose funding under the existing statutory formula. This additional $1.1 million was added to the $1.2 million in the introduced budget. The proposed 60/40 distribution in the proposed budget, where 40 percent of the new funding would have been distributed on the basis of violent crime data, was eliminated.
  
• No changes in ABC or liter tax distributions.
  
• 4 percent salary increase, effective Dec. 1, for state-supported local employees
  
• 3 percent salary increase, effective Dec. 1, for teachers
  
• An additional $11.9 million to pay the state share of the increase in teacher retiree health care credit. (The increase will cost local governments an additional $18.6 million and will be reflected in FY08 retirement contribution rates.)
  
• An additional $2.6 million to expand pre-school education for at-risk students not presently served.
  

Eminent domain bill severely restricts redevelopment projects

The Senate and House voted overwhelmingly in favor of eminent domain legislation that rewrites the rules for all entities that with the power to condemn land.

The conference version of the three bills -- HB 2954 (Bell, Albemarle), SB 781 (Cuccinelli, Fairfax) and SB 1296 (Norment, James City) restricts condemnation authority over blighted property to require the structure be beyond repair or unfit for habitation or use. For blight condemnation of unimproved land, it must be vacant and must constitute a public nuisance. This definition is much stricter than existing law in Title 36, the authority for housing and redevelopment authorities. The new law does exempt from the definition any property in a redevelopment or conservation plan that was filed prior to Jan. 1, 2007, so long as the property is acquired by July 1, 2010, thus giving a three-year window to acquire properties as a part of an existing plan. The new law also adds gas, electric, water, sewer or telephone operations of cities, towns and other public agencies to a list of purposes for which land may be condemned. This is a technical amendment to assist city-operated gas and electric systems.

Due to the lopsided vote, it will be difficult for the governor to achieve any useful amendments to the bills to enable redevelopment authorities to carry out their jobs. Therefore, local governments will be critically limited in their ability to clear blight in declining neighborhoods.

Enhanced retirement benefits for deputies enacted

Both houses approved legislation that will require about 40 cities and counties to grant enhanced retirement benefits to sheriffs’ deputies under the Law Enforcement Officers Retirement System beginning July 1, 2008. The costs of the enhanced benefits in SB 1166 (Stolle, Virginia Beach) will be phased in over five years beginning in 2008, under a schedule to be developed by the Virginia Retirement System. While the cities and counties that already extend sheriffs’ deputies enhanced retirement benefits under LEOS are not affected by this new mandate, all localities are affected by another section of the bill, which gives localities the option of the retirement multiplier for its public safety officers to 1.85 percent (from the current 1.70 percent). The bill also sets that higher rate for state police. Public safety officers undoubtedly will lobby their councils and boards to adopt this higher retirement multiplier. Unlike the original version of this bill, as well as budget amendments proposed by Gov. Tim Kaine and in the Senate version of the budget, there is no additional state funding to pay a portion of the costs of participating in LEOS. Instead, the cost for these benefits will be borne by localities and will be reimbursed to some extent by the Compensation Board, according to the same process in place for reimbursement of some of the retirement costs for constitutional officers and their employees. Currently, the Compensation Board bases its payments on the lower of either the local retirement contribution rate, or the state retirement contribution rate.

Health insurance credit for teachers approved

The General Assembly waited until Saturday to approve legislation raising the health care credit for retired teachers. HB 2370 (Tata, Virginia Beach) and SB 1218 raise the credit for retired teachers from the current $2.50 a month for each year of service to $4 a month. In addition, the bills remove the cap (currently $75) on the maximum size of the monthly credit and instead limit the credit to the $4 for each year of service multiplied by the smaller of (i) twice the amount of creditable service or (ii) the amount of creditable service. This increased credit will cost local governments $18.6 million in FY08, with the cost being reflected in 0.46 percent higher teacher retiree contribution rate.

Touch screen voting equipment issue finalized

Localities will be prohibited from purchasing direct electronic recording (DRE) voting machines after July 1, 2007 under HB 2707 (Hugo, Fairfax) and SB 840 (Devolites Davis, Fairfax). DREs are the touch screen voting machines in use in most localities in the state. The bills also authorize the State Board of Elections to determine the allocation to cities and counties of any federal or state funds made available to implement the act. The General Assembly removed language in HB 2707 that would have required an automatic retabulation of optical scan voting machines in elections in which the undercount in a particular race was large enough to affect the outcome of the election.

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