eNews Sept 1 2016
Thursday, September 01, 2016 - 03:15pm
Insurance, regulations and revenue concerns aired at Airbnb work group meeting
Public safety topic of next discussion
The short-term rental group of the state Housing Commission met Aug. 25 to hear presentations on insurance issues, regulations on bed and breakfasts and tourism in Loudoun County. While there was a lot of technical discussion regarding the insurance needs of someone operating a short-term rental, it ultimately seems that the definition of “occasional sale” controls what types of policies are needed. There is no official definition for insurance purposes, according to the industry representatives who spoke.
A representative of bed and breakfast operations focused on the regulations that her industry has to abide by, such as ABC regulations and those of the health department. During the public comment period, several additional bed and breakfast operators asked for a level playing field because they do abide by these regulations.
The work group also heard a discussion of some facts and figures gathered by Loudoun County. In comparing the inventory of sleeping rooms, there are 5,700 hotel/resort sleeping rooms, 127 bed and breakfast sleeping rooms and 919 Airbnb sleeping rooms. The Airbnb rooms account for 16% of the total hotel inventory. They estimate they are missing over $1.2 million dollars in revenue from these rooms. The Loudoun representatives said their priorities in the on-going discussion of short-term rental are: registration as businesses, taxation like hotels and local transparency regarding the identity of providers.
The working group was asked to consider public safety issues at its next meeting, but no date was set.
VML contact: Michelle Gowdy, mgowdy@vml.org
Update on training for FOIA officers
FOIA Council to complete work on FOIA rewrite by October
The Freedom of Information Advisory Council plans to make on-line training information for FOIA officers available by Oct. 18, 2016, according to the council’s website. The Council notes that details will be posted here.The council also notes that it had considered hosting webinars, but believes that the online training program will be a more convenient, effective and efficient way to provide training than a series of webinars.
The FOIA Council also continues its three-year effort to rewrite the FOIA statute, with plans to finish that task by October. The FOIA Council holds its next full meeting on Sept. 19 at 1:30 p.m.
The Council has set up several subcommittees that are tackling the proposed rewrite of various sections of FOIA. The subcommittee on public records met August 18th to discuss 2016 bills related to an economic development project in Prince William County, including HB280, HB281, HB282 and HB383). They heard from Delegate Marshall who championed these bills, as well as from Prince William County. The subcommittee also heard from the Virginia Homeland Safety and Resilience staff director Shawn Talmadge about proposed changes to the public safety exemptions. Some of the changes were to consolidate various code sections, or portions thereof, but questions arose about the scope of the exemptions. This discussion was to explain the public safety need for the exemptions.
The subcommittee on personnel exemptions holds its next meeting Sept. 7th.
VML contact: Michelle Gowdy, mgowdy@vml.org
Webinar on state-run, local option health insurance plan available
If you missed the webinar on the development of a local option health insurance plan through the Virginia Department of Human Resource Management, a recording of the webinar is now available for viewing.
As a reminder, legislation (SB 364) adopted in the 2016 session directs the state to develop a local option health insurance plan. The webinar gives background information on the development of the plan.
VML contact: Mary Jo Fields, mfields@vml.org
State revenue tumble will hurt local budgets
It would not be hard to believe that the state’s revenue woes are the product of an overactive imagination:
- FY 2016 ended with 86,200 more jobs than the previous fiscal year.
- After five straight years of job growth hovering around 1.0 percent, the labor force increased by 2.3 percent – the strongest growth rate since fiscal year 2005.
- The 3.7 percent unemployment rate is the lowest since April 2008 and the lowest in the Southeastern states.
- Wages and salaries grew 4.2 percent, higher than the official forecast of 3.9 percent.
- Total general fund revenues rose by 1.7 percent for a total of $18.0 billion.
But, the realities cannot be ignored. The loss of high-paying jobs due to federal sequestration and defense spending cuts as well as the quickening exit of the Baby Boomers from the workforce have significantly changed the employment mix.
- The FY 2016 revenue forecast called for 3.2 percent growth, missing the mark by 1.5 percent or $268.9 million.
- Transfers to the General Fund fell another $10.4 million short of the forecast, mainly as a result of lower sales tax receipts. Sales tax collections grew 2.2 percent, trailing the forecast of a 4.1 percent increase.
- Almost all of the shortfall was due to poor performance of income tax withholdings (73.0 percent) and sales tax collections (27.0 percent), resulting in a $279.3 million total loss.
- The simple fact is that low-wage jobs ($367-$940 per week) account for almost half of the job growth over the past year. High-wage jobs ($1,514-$2,087 per week) made up barely 15.0 percent of the new jobs.
Because state law requires a revenue re-estimate when the total individual income, corporate income and sales taxes collected are 1.0 percent or more below the estimates for those taxes, Gov. Terry McAuliffe convened the Joint Advisory Board of Economists and his Advisory Council on Revenue Estimates to take a fresh look.
Based on political uncertainties this year and next, the impending round of greater federal sequestrations in October, and the new job mix that is biased towards lower wages, the Governor’s advisors embraced a conservative revenue forecast. Under the interim forecast, revenue growth in FY 2017 falls from 3.2 percent to 1.7 percent, a reduction of $564.4 million. In FY 2018, total revenue growth is dialed back from 3.9 percent to 3.6 percent, a reduction of $632.7 million. That’s a total revenue reduction of just under $1.2 billion for the 2016-18 biennium.
In his August 26 speech to the General Assembly’s money committees, Gov. McAuliffe offered his views to close the budget gap this fiscal year and next.
The pay raises of $125.1 million for state employees and state-supported local employees will be re-directed to plugging this year’s budget gap. He also identified as an option $378.2 million that could be withdrawn from the Revenue Stabilization Fund to address the imbalance in fiscal year 2017. Using “rainy day” money, however, will require the General Assembly’s approval.
In the meantime, McAuliffe instructed state agencies to prepare budget reduction plans of 5.0 percent based on agencies’ legislative appropriations for FY 2017. The plans are to be approved by the appropriate cabinet secretary before submitted by September 20 to the Virginia Department of Planning and Budget (DPB). The Governor’s intent is to begin implementation of the reduction plans sometime in October, meaning state agencies will have roughly nine months to carry out the FY17 cuts. As for FY 2018, state agencies will be given additional instructions in the Fall. FY 2018 budget cuts will be incorporated into the budget bill McAuliffe will submit to the General Assembly in December.
Based on the instructions issued by DPB, the 5.0 percent reduction plans are to exempt aid to localities as well as mandated and/or formula driven programs. But before you break out your party hats, be aware that local aid will remain subject to the Governor’s discretion for reductions for inclusion in December’s amended budget bill. This means cuts to local aid in FY17 will have to be executed in roughly two or three months. That would not be easy.
In putting together the budget amendments for FY 2018, the Governor may also consider ways to increase revenues. His speech to General Assembly members mentioned the Marketplace Fairness Act, which is languishing in the U.S. House of Representatives. Although any revenues from Marketplace legislation would be dedicated to transportation, it would be useful. The Governor also put in a plug for Medicaid expansion under “Obamacare.” General Fund savings for the state are estimated at $71.0 million for the biennium. Depending on how the expansion would be structured in Virginia, another $211.0 million could be forthcoming from non-General Fund sources to match the federal Medicaid dollars.
Over the next few weeks, we should learn more about how the state will manage its revenue problem. It’s quite possible that the additional dollars appropriated for local social services departments, K-12 education and police departments will end up on the chopping block. Stay tuned.
VML draft 2017 policy statements posted
The draft 2017 VML policy statements are now available for review on VML’s website.
In late July, the six VML policy committees met to discuss new and continuing issues, make revisions to their respective policy statements for the coming year, and develop recommendations for potential legislative program items. Now that VML’s six policy committee have met and completed the revisions to their policy statements, the 2017 draft statements are now available for review on the VML website. These statements will be discussed and adopted at the VML business meeting to be held on Tuesday, Oct. 11, during the VML Annual Conference in Virginia Beach.
The policy statements may be seen here:
Community & Economic Development
At the Oct. 11 annual business meeting, each policy committee chair will report on their respective draft statement. After questions and discussion, each policy statement will be adopted.
If you have any questions about VML’s policy process, please call or email Janet Areson at VML, 804/523-8522; jareson@vml.org.
VML addresses local behavioral health funding for legislative workgroup
Local governments funding for behavioral health services goes far beyond the performance contract with Community Services Board (CSBs) and includes funding to both mandated programs as well as nonprofit organizations. That was part of the message of a presentation to the structure and financing workgroup of the Mental Health in the Twenty-First Century Joint Subcommittee.
The Children’s Services Act (CSA) and mental health services and medications in local and regional jails and juvenile detention centers are some of the major programs which cities and counties fund mostly outside of the CSB performance contract.
For example, in fiscal year 2016, local governments paid $110.72 million for services in the CSA program. Behavioral health services constitute a significant part of this program. For jails, localities paid at least $9.69 million for mental health treatment in fiscal year 2015, according to the State Compensation Board. While CSBs provide services in some jails, private contractors provide the most significant portion of mental health treatment in jails, according to the Comp Board.
Other local costs come from police calls and transports, emergency services response, the Part C Early Intervention Program, drug courts, and funding to nonprofit groups such as Healthy Families and CHIP.
Charlottesville Assistant City Manager Mike Murphy and Roanoke County Assistant County Administrator Dan O’Donnell each presented information about the range and type of programs their local governments fund that offer either direct behavioral health services or otherwise serve residents with potential behavioral health needs.
Jim Regimbal of Fiscal Analytics, Ltd., presented the workgroup with information about the fiscal realities for Virginia local governments, including the fact that local resources have not kept pace with inflation/population growth since 2009; and that the 46 local governments in 11 CSBs that have performance contract waivers (i.e., they do not pay the full 10 percent match), have seen negative growth in state funding and lower overall revenue growth than other localities.
The joint subcommittee, created by the 2014 General Assembly, is conducting a four-year study of Virginia’s publicly-funded mental health system. This year the subcommittee has created four workgroups: structure and funding, crisis and emergency services, criminal justice diversion, and housing.
VML contact: Janet Areson (jareson@vml.org)
NLC seeks committee and council nominees
The National League of Cities is now taking applications to serve on its seven policy and advocacy committees, its seven member councils, and its board of directors.
Serving on a policy committee or council offers a great opportunity to learn about more specific issues, meet colleagues with similar interests from across the country, and help shape the direction of NLC’s work on behalf of local governments.
The policy and advocacy committees consist of the Community and Economic Committee; the Energy, Environment, and Natural Resources Committee; the Finance, Administration, and Intergovernmental Relations Committee; the Human Development Committee; the Information Technology and Communications Committee; the Public Safety and Crime Prevention Committee; and the Transportation and Infrastructure Services Committee.
The member councils include the First Tier Suburbs Council, the Large Cities Council, the Military Communities Council, the Small Cities Council, the University Communities Council, and the Council on Youth, Education, and Families.
The application deadline for leadership positions on the policy and membership committees and the board of directors is Oct. 14. The application deadline for federal advocacy committee membership is Nov. 23. More information about committees and their work may be found on the NLC website.
