eNews Feb. 28, 2019 – Budget Analysis EditionThursday, February 28, 2019 - 12:48pm
Budget “onion” peeled
The conferees released their 234-page budget conference report on February 23. Democratic and Republican delegates spent that Saturday arguing over a proposed change to the procedural rule to allow a floor vote on the report without first waiting 48-hours. Legislators finally decided that 24-hours would suffice for their individual reviews of the report. In the end, the House and Senate spent less than an hour in their Sunday sessions before approving the conference report and blasting out of Richmond for home!
Download our budget issues summary
We have put together a spreadsheet for the budget issues of greatest interest to local governments. Each budget amendment item on the spreadsheet is linked so that you can study the issue in greater detail. You can download a copy of the spreadsheet here.
The budget in brief: “Meh”
This is neither a good nor bad budget for localities. It’s more of a “meh” budget. The promises of the Introduced Budget Bill did not materialize and ended up bulldozed by election-year politics, conflicting spending priorities and the temporary tax relief provided to individual taxpayers resulting from the 2017 federal tax cuts.
Introduced Budget Bill
|One-Time Revenue Less Uses:||FY 2019||FY 2020||
Conferees’ Actions for Biennium
|Refundable Earned Income Tax Credit||$10.30||$206.00||$0|
|Water Quality – Storm Water Local Assistance||–||$50.00||$10.00|
|Water Quality – NRCF/Agricultural Best Management
Items of interest:
- K-12 education: Localities will appreciate state financial help for teacher salaries, but the 12-months of financial support offered by Gov. Northam was shrink-wrapped to eight months.
- Stormwater: The $250 million (cash) proposed over five-years for the Stormwater Local Assistance Fund was replaced by a one-time $10 million bond issuance.
- Local Law Enforcement: No reductions – or additions – were made to state assistance for local law enforcement (HB 599).
- Behavioral Health: The area of behavioral health saw some welcome funding additions but also more study requirements, including a plan for realignment of behavioral health services funded through Medicaid.
- Online Retail Sales Tax: And finally, the dancing tax dollars from online retail sales, first estimated by state leaders to be as much as $300 million per year, are now estimated at $155 million in FY20. The reduction is further compounded by the General Assembly’s action to steer $40 million (or 25%) of the collections to the Major Headquarters Workforce Grant Fund (i.e. Amazon).