March 14, 2008

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At a glance: VML offers preliminary budget analysis

Here is VML legislative staff's quick read of the budget adopted March 13 by the House of Delegates and Senate. League staff will prepare a detailed analysis to be sent out next week. In the meantime, here are some highlights:

• Despite media reports on cuts to law enforcement funding, HB 599 funding was not diverted to pay for other programs.
  
• Excess court fees were not diverted to the state General Fund.
  
• In terms of rebenchmarking of education costs, the budget puts in place a cap on inflation, but did not change the methodology regarding recognition of local salary increases, and did not increase the deduction of federal revenues.
  
• The budget includes funding for a 2 percent salary increase in FY09 for state-supported local employees (Comp Board, social services, registrar, etc.), effective Dec. 1. There is no state funding for a teacher salary increase in FY09. There is state funding for a 2 percent salary increase for teachers and other SOQ-funded positions for FY10, effective July 1, 2009.
  
• The budget cuts $50 million a year in aid to local governments. This amounts to a 4.2 percent cut. The budget language directs the Department of Planning and Budget to provide within 30 days the manager in each city and county "a list of certain state aid to local government programs along with an estimate of the general fund amount for each program that each county and city could expect to receive from the state during each year of the biennium. The total amount listed for these programs will serve as the basis for calculating the savings apportioned to each city and county for this item. The savings apportionment will be equal to the percentage of the aggregate general fund amount for all of these state aid programs in each city and county totaling $50 million in each year." (Item 475.1 #2c) Each city and county "shall have flexibility in determining how it will implement the savings apportioned to it."
  
• The distribution of ABC profits/wine liter tax to towns was eliminated, for a savings to the state of $533,000 a year, but towns do not appear to be subject to the 4.2 percent cuts.
  

The conference report for HB 30 is available on the Internet. There also is a conference report for HB 29 (the current year budget).

The Senate Finance Committee has prepared an overview of the budget conference report.

House Appropriations has prepared an overview, but the link is not working right now. It may be activated later, and would be available on the House Appropriations Committee Web page, Highlights of the Conference Committee Report.

As a reminder, the Department of Education will be producing its superintendent's memorandum outlining the changes to direct aid to education, including locality-specific information on required state and local shares for the various education programs. DOE has requested contact information for managers, and evidently plans to send that information directly to localities. VML also will be watching the DOE Web site for the posting of this information.

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