eNews April 13 2016

Wednesday, April 13, 2016 - 03:15am

State budget update: General Assembly not likely to embrace McAuliffe amendments

Gov. Terry McAuliffe’s amendment package to adjust HB 30 for fiscal years 2017 and 2018 was publicly released Monday morning. Of the 30 amendments, 10 of them change spending amounts, 18 make language-only changes, and two seek to increase available resources. Because McAuliffe signed HB 29 into law, further amendments are not necessary for the remainder of FY 2016.

Republican legislators angered over the Governor’s vetoes targeting a number of their education and firearms initiatives will consider rejecting certain budget amendments to express their displeasure. McAuliffe’s amendments to, among other actions, limit the prohibition on Medicaid expansion to just fiscal year 2017 will certainly be in store for rough treatment by legislators.

McAuliffe’s amendments would bump up general fund spending by $12.6 million. The two resource amendments add $14.1 million, capturing $3.0 million from debt service savings in FY 2016 and recognizing $11.1 million in proceeds related to the sale this fiscal year of an ABC building in Alexandria. If the legislature accepts all of the Governor’s amendments, the unappropriated balance in HB 30 will increase from $9.9 million to $11.4 million.

VML asks members to review the Governor’s budget message. There are several amendments that affect the “bottom lines” of local government budgets in the upcoming year. It is important that your delegates and senators hear from you before the General Assembly reconvenes on April 20 to consider the amendments and vetoes McAuliffe issued after the General Assembly adjourned sine die on March 11.

Here are the highlights:

Amendment 3: JLARC’s evaluation role in economic development (Item 33)
The General Assembly gave JLARC the authority to review FOIA-exempt documents at VEDP as well as relevant local documents currently protected under the FOIA statute. The General Assembly also gave JLARC the responsibility to conduct special studies and reports. This legislature is interested in incentive grants and tax preferences, specifically reviewing economic benefits to the Commonwealth and value to taxpayers. Budget language granted JLARC access to information, records, facilities and employees of all public bodies (including local governments) involved in economic development initiatives and policies, authorizing JLARC staff to attend meetings of all public bodies and to access the information and records of private entities, where private entities are obligated to provide such information by law or contract to public bodies. Budget language also directed the Tax Commissioner to provide JLARC such tax information as may be needed to conduct oversight studies.

The Governor’s amendment scales back the power and authority the General Assembly provided JLARC for this effort, particularly as it affects the private sector and, to a lesser extent, local governments.

Amendment 7: Language restricting the use of broadband funding (Item 109)
The enrolled budget bill includes language that limits the ability to leverage appropriations for the Virginia Telecommunications Initiative with other state and federal dollars. This prohibition could hurt local economic development efforts. The Governor’s amendment deletes the restrictive language.

Amendment 11: Reversion of Chamberlin Hotel property to the Commonwealth (Item 124)
The budget bill as passed by the General Assembly includes language to override previous Acts of the Assembly governing the conveyance of the property to the state. The Governor’s amendment strikes the language, thereby continuing negotiations between the U.S. Army and the representatives of the Chamberlin Hotel.

Amendment 12: Modify match requirements for grants through the Virginia Brownfields Restoration and Economic Redevelopment Assistance Fund (Item 125)
State law requires a one-to-one match rate between the state and a grant recipient. The Governor’s amendment overrides the state statute (§ 10.1-1237) to direct the Virginia Economic Development Partnership to develop a guideline to require a 25.0 percent match by a grant recipient. The amendment is to help smaller localities that may not be able to provide a 100.0 percent match.

Amendment 13: Remove funding for Virginia Virtual School (Item 137)
The General Assembly appropriated $275,000 and 4.00 positions to implement legislation (HB 8). Because Gov. McAuliffe vetoed the bill, his amendment removes the funding and positions. If the General Assembly overturns the veto of HB 8, it is likely to reject the budget amendment.

Amendment 23: Allow development or preparation of the Clean Power Plan (Item 369)
The budget as passed by the General Assembly prohibits the Department of Environmental Quality to prepare or submit to the Environmental Protection Agency (EPA) a state implementation plan, with respect to EPA’s “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” unless the stay issued by the U.S. Supreme Court is released pending disposition of the applicants’ petitions for review in the U.S. Court of Appeals for the District of Columbia Circuit and disposition of the applicants’ petition for a writ of certiorari, if such writ is sought.

The Governor’s amendment would permit the state to proceed with the development of regulations, but would retain the restriction on submitting the plan to EPA until the stay issued by the Supreme Court is released.

Amendment 25: Resolve conflicting Rail and Public Transportation study language (Item 448)
The General Assembly enacted HB 1359 to establish the Transit Capital Project Revenue Advisory Board (the Advisory Board) within the Department of Rail and Public Transportation to examine the effects of the loss of state transit capital funds and identify additional sources of revenue. The Advisory Board, which expires on July 1, 2018, is required to provide both an interim and a final report on its work and findings.

As part of the budget, the General Assembly included similar study language. The Governor’s amendment replaces the language in the budget with a new narrative to ensure there is no conflict with HB 1359.

Amendment 28: Increase maintenance reserve funding for Department of Juvenile Justice (Item C-44)
The General Assembly modified the timeline the Governor proposed to construct two new residential facilities. The two projects were part of the administration’s scheme to change the purpose and programming of the state agency. As a result of the legislature’s actions, the department will need additional funding to maintain existing facilities until such time as the new projects become operational. The Governor’s amendment provides $3.0 million in bond proceeds to address the department’s current capital needs.

Amendment 29: State taking of local fines and forfeitures (Item 3-6.05)
Since the 2012 legislative session, the state has mandated the transfer of local fines from certain localities. Budget language directs the local dollars to the state’s Literary Fund. Language adopted by the General Assembly in the 2016 session continues the practice, but exempted the Cities of Fairfax and Falls Church from having to remit any portion of collected fines.

The Governor’s amendment strikes the language authorizing the program, effectively eliminating the program beginning in FY 2017.

VML urges members to contact your delegates and senators to support the amendment.

Call your legislators to support amendment to eliminate state seizure of local fines and forfeitures

Local governments have one last chance this year to get the language taken out of the state budget that allows the state to take for itself an increasing portion of local fines and forfeitures. Calls to legislators are needed before the General Assembly reconvenes on Wednesday, April 20.

One of VML’s top legislative priorities this year was to eliminate budget language authorizing the state to seize an increasing portion of local fines and forfeitures. These local dollars result from enforcement of traffic-related ordinances on local, secondary, and primary roads, as well as Interstates. Despite sustained efforts during the General Assembly session to persuade legislators to purge the language (Item 3-6.05) from the budget, the budget conference report kept the seizure of local fines intact for 31 of the 33 affected localities (the Cities of Fairfax and Falls Church received an exemption). VML urged localities to ask Gov. McAuliffe to veto the offensive budget language.

Earlier this week, we were informed that Governor Terry McAuliffe amended Item 3-6.05 in HB 30 by striking the language in this item. This would eliminate the taking of local fines beginning in the new biennium, which starts July 1.

To sustain this amendment, we need your help. We ask that you talk to your delegates and senators and get them to vote to sustain (i.e., agree to) the Governor’s budget amendment #29 that strikes the language in Item 3-6.05.

Since this is an amendment, not a veto, the threshold for success is higher: we need a majority of each chamber to vote in favor of the amendment, as opposed to a veto, where only a third plus one is necessary to sustain it.

Even if your community is not currently affected by this seizure of local fines and forfeitures, please be aware that the General Assembly last year increased the number of localities affected, and could do so again with the stroke of a budget-writing pen. That is why it is urgent that all local governments call their House and Senate members to get them support the Governor’s amendment to this item.

Here are a few talking points:

Traffic enforcement creates safer communities and saves lives. Whether it is patrolling locally-maintained streets or highways running through a community, the state should not carry out disincentives for local law enforcement to keep the traveling public safe. The current budget language creates such a disincentive.
Local police and sheriffs’ deputies do not just enforce state and local traffic laws and ordinances, but also provide disabled motorist assistance on roads and highways. This prevents more serious accidents as well as traffic tie-ups affecting travelers and commuters.
Amending this item conforms the budget to legislation passed this year by the General Assembly (HB 537 – Minchew) which states that local fines stay local.
The language in Item 3-6.05 was amended by the General Assembly last year to include an escalator that increases the amount of money diverted from local fines to the state each year. This means that affected localities will see greater amounts of local fines go to the state each year for no stated purpose.
Local fines are deposited into a locality’s general fund. Education is the greatest general fund expense for Virginia’s cities, counties, and two towns.
In order to provide adequate education funding, localities contribute $3.6 billion above the state match requirement for K-12 public education. Taking money from the local general fund affects local education funding efforts.
Both a State Inspector General report and State Attorney General Opinion affirmed that local fines and forfeitures are local, not state revenues.

Please get in touch with your legislators about this important budget item. If you have any questions, please email or call Janet Areson (jareson@vml.org; 804-523-8522) or Neal Menkes (nmenkes@vml.org; 804-523-8523) at VML.

Reminder: Make calls in support of veto of party ID bill

Please call or email your delegates and senators and ask them to sustain Gov. Terry McAuliffe’s veto of SB 767 (Suetterlein), the bill that would require political party identification on local ballots for candidates nominated by a political party.

Talking points:

SB 767 will increase partisanship in municipal elections. Political parties will be inclined to be even more active in city and town elections if the party label will appear on the ballot.
Most cities and towns will be affected by this bill. Only 15 of 38 cities and 5 of 190 towns have charter provisions that require either a non-partisan ballot or nomination by petition.
There is not a Republican or Democratic way of responding to house fires or burglar alarms or enforcing the building code or raising local revenues to pay for services that the state requires the municipality to offer.
If local candidates are identified by party on the ballot, federal employees and members of the military would be prohibited from running for local office.

VML contact: Mary Jo Fields (mfields@vml.org)

GO Virginia momentum stalls out

How does an initiative that was supported by Gov. Terry McAuliffe and a majority of Republican and Democratic legislators grind to a halt? That’s a question business leaders and the public are pondering.

Gubernatorial support for the GO Virginia legislation vanished after McAuliffe received an opinion from Attorney General Mark Herring that the $35.0 million program probably violates the Virginia Constitution. It may come across as “inside baseball” to people who work and live outside the seat of state government in Richmond, but to those who labor within its boundaries the stakes are real, personal and significant.

As passed by the General Assembly, HB 834 establishes a 22-member Virginia Growth and Opportunity Board. Between the number of legislators serving on the Board and the number of citizen board members to be appointed by the Speaker of the House of Delegates and the Senate Rules Committee, the Governor found himself and his appointees in the minority. To McAuliffe, the arrangement upended the balance of power between the executive and legislative departments.

In response, the Governor’s substitute amendment proposes to increase board membership to twenty-four and to give him the authority to exercise effective appointment control over 13 of the board members.

The stakes of this struggle also affect local governments. HB 846, a companion measure to HB 834, creates the Virginia Collaborative Economic Development Performance Grant Fund. Localities with an approved collaborative economic development plan and making agreed-upon investments for particular projects can apply for state grants of up to 50.0 percent of the total investment or contributions made by the participating localities. This Fund would be capitalized by up to 45.0 percent of the total annual amount of personal income taxes paid to the state by the project’s new employees.

Gov. McAuliffe also submitted an amendment to HB 846, tying the fate of the Virginia Collaborative Economic Development Act to final passage of HB 834 (or its Senate counterpart SB 449). In other words, if the General Assembly fails to approve the Governor’s changes to HB 834, then HB 846 will not become law.

The conflict between the Governor and the legislature over these bills is real and simultaneously surreal. Just two weeks ago, Gov. McAuliffe told hundreds of Hampton Roads business executives and government officials at a Hampton Roads Chamber of Commerce luncheon that it is time for local mayors to start working as one unit to expand southeastern Virginia’s economy and quality of life. The Governor commented that he would like to see more regionalism.

And, that’s exactly what HB 834 and HB 846 are designed to do.

Voucher, virtual school bills vetoed

Gov. Terry McAuliffe on April 5 vetoed bills that would have created a voucher system for students with disabilities and a statewide on-line virtual school.

The General Assembly will consider the vetoes in the April 20 reconvened session. A two-thirds vote of members present would have to vote in opposition to the veto for the bills to be approved.

HB 359 (LaRock) would allow parents of students with disabilities to apply to their resident school division for a Parental Choice Education Savings Account. If the school board approved the application, the state then would have begun transferring to the account an amount equal to 90 percent of state special education and Standards of Quality funding associated with that student and school division.

The parents could have used the funds to pay for a variety of items, including tuition at non-sectarian or sectarian schools, higher education, transportation and “other goods and services” necessary for education.

School boards would have been assigned some fairly knotty administrative tasks under the bill, including receiving, accepting or rejecting the applications within defined timelines and performing audits of expenses from the account. The vote in the House on the final version of the bill was 52-47; in the Senate it was 20-19.

HB 8 (Bell, Richard) created a full-time virtual school that would have operated under the direction of a new statewide board. The state would have transferred the statewide average share of state Standards of Quality per pupil funding to the virtual school for each student enrolled. Enrollment in the virtual school would be capped at 5,000 students statewide. The final vote in the House on the bill was 60-36; in the Senate the final vote was 23-17.

The session on April 20 promises to be a lengthy and controversial one, as a number of gubernatorial vetoes and amendments will be considered. Other bills that have been vetoed by McAuliffe that pertain to local governments or school divisions include:

HB 264 (Davis), which would prohibit localities from requiring contractors to pay living wages.
HB 481 (Marshall) and SB 270 (Black), which dealt with the release of incarcerated aliens and which would have applied to the director of the Department of Corrections and local sheriff and regional jail administrators.
HB 516 (Landes), which would require schools to identify materials as “sexually explicit” and notify parents if teachers plan to provide instructional material containing such content.
HB 587 (Poindexter), which would prevent local governments from removing monuments. The bill was introduced in reaction to a judicial ruling that the current statute covering removal of monuments allows localities to only remove monuments that were raised after 1998.
HB 1234 (Lingamfelter), which would permit school security officers to carry firearms under certain conditions.

VML contact: Mary Jo Fields (mfields@vml.org)