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					                                      May 7, 2012



Governor offers amendments to budget bills
General Assembly meets May 14 to consider them
         Gov. Bob McDonnell submitted his budget amendments to the General Assembly
on Friday evening. The amendments affect the two budget bills (HB 1300 and HB 1301)
passed by the legislature on April 25. The General Assembly will meet May 14 to
consider the amendments.
         Under the state constitution, the General Assembly can approve or reject the
amendments but cannot amend them. Because the budget bills originated in the House of
Delegates that chamber has first crack at them. Any amendment rejected by the House is
dropped from the package, and is not forwarded to the Senate. The budget amendments
approved by the Senate are then sent to the governor. He can sign the remaining
amendments into law or he can veto those items in the budget that the General Assembly
refused to amend. In a reconvened session, the General Assembly usually ends up
adopting most of a governor’s proposed amendments.
         In his message to the House of Delegates concerning the amendments, McDonnell
emphasized his two overarching themes of job creation and K-12 education. His
amendments also correct technical errors and clarify intent.
         VML staff reviewed the 19 amendments offered to HB 1300 and the 88
amendments submitted for HB 1301. VML’s take on the amendments are below. The
league urges its members to talk this week to their delegations about the gubernatorial
budget package. Delegates and senators need to know how these amendments affect
local taxpayers and the delivery of state-required services. VML will send a template
later this week that member local governments can use in communication with their
delegations.



HB 1300 amendments (current fiscal year budget)
Compensation Board
       Jail per diems. Adds $1.23 million to account for actual bed days used by state
responsible and local inmates in local and regional jails. (Amendment #3, Item 67.30)

Compensation, retirement & benefits
       State employee bonuses. Makes the 3 percent bonus for state employees on Dec.
1, 2012 contingent on state agency savings and requires that agency savings be at least
1.5 times the amount of the state agency savings. Performance measures for eligibility for
the bonuses are also changed. The contingencies included in the budget adopted by the
General Assembly were based on general fund revenue collections exceeding the forecast
and on unspent appropriations. (Amendment #11, Item 469)

Economic development
        Governor’s Development Opportunity Fund. Reduces from $12 million to $6
million the amount of cash to be transferred from the Opportunity Fund to the state’s
general fund. (Amendment #18, Item 3-1.01)
        Workforce Retraining Fund. Reduces by $1.0 million the amount of funds to
be transferred from the Retraining Fund to the state’s general fund. (Amendment #19,
Item 3-1.01)
        Federal Action Contingency Trust (FACT). Eliminates the $7.5 million
earmark from the fund for BRAC-related expenses. An amendment in HB 1301 provides
direct funding for these costs. (Amendment #15, Item 470)



HB 1301 amendments (FY13-FY14 budget)
Local transfer payments to the state
        Use of local ordinance fines and fees for state teacher retirement payments.
Under this amendment, the state would still immediately sweep the fines and fees of
every locality into the State Treasury and hold that local money until it is determined if
the local share of fines and fees of each locality were above the 50 percent mark
(amended from the 40 percent passed by the General Assembly). At the 50 percent level,
six localities – including the Cities of Fairfax, Falls Church, Emporia and Hopewell –
would donate a portion of their fines and fees to the State Literary Fund. The Governor’s
amendment also provides $200,000 to the Office of the State Inspector General to
contract for an independent evaluation of the entire fines and fees system in Virginia and
how it relates to the State Literary Fund. The report would be due by Dec. 1, 2012.
(Amendment #85; Item 3-6.05)

Administration
Compensation Board
        Constitutional officer career development programs. Restores $973,919 in
funding during FY13 for this program, which has been restricted to only those in the
program as of Jan. 1, 2010. (Amendment #5, Item 75)
        Local Constitutional officers salary increases. Clarifies that localities are
allowed to give constitutional officers salary increases in order to comply with SB 497
(the “5 for 5” legislation.) (Amendment #6, Item 75)

State Board of Elections
       Election costs. Adds $310,000 in FY13 to help cover the advertising and
administrative costs for the two constitutional amendments that will be on the ballot in
November (resulting from passage of HB 5, HB 1021 and SB 204) (Amendment #7, Item
87)

Compensation, retirement & benefits
        State employee bonuses. Makes the 3 percent bonus for state employees on Dec.
1, 2012 contingent on state agency savings and requires that agency savings be at least
1.5 times the amount of the state agency savings. Performance measures for eligibility for
the bonuses are also changed. The same language was submitted as an amendment to HB
1300 as well. The contingencies included in the budget adopted by the General
Assembly were based on general fund revenue collections exceeding the forecast and on
unspent appropriations. (Amendment #63, Item 468)
        5 for 5 for legislators, elected state officials. Adds language amendment to
require elected officials who are Plan 1 members of VRS to pay the 5 percent member
contribution, with a 5 percent salary increase given as an offset. The “5 for 5” will be
implemented for Plan 1 House of Delegates members on Jan. 8, 2014; for the governor,
lieutenant governor and attorney general who may be Plan 1 members on Jan. 14, 2014
and for Plan 1 Senators on Jan. 13, 2016. The implementation would be moved up for
any seats filled by special election. Members of the General Assembly who are Plan 2
members of VRS already pay the 5 percent member contribution. (Amendment #87, Item
4-6.03)

Economic Development
        Motion Picture Opportunity Fund. Adds $1 million each year for the
Governor’s Motion Picture Opportunity Fund, boosting the Fund’s annual appropriation
to $3 million. (Amendment #12, Item 105)
        Port of Virginia Economic and Infrastructure Development Grant.
Authorizes a grant program for an economic development zone comprising 15 cities and
21 counties. Based on the number of new jobs created, qualified companies can receive
one-time grants of up to $3,000 per new, permanent full-time position. The maximum
amount of a grant allowable to a qualified company in any given fiscal year is capped at
$500,000. The maximum amount of grants allowable among all qualified companies in
any given fiscal year is $5 million. The grants are not subject to proration. If funds are
insufficient in a given year, then the amount owed is paid in the next fiscal year in which
funds are available. (Amendment #88, Item 4-15.00)

Education
        Direct aid to education. A number of the amendments restore funding for
projects or items that the governor had included in the introduced budget, but that had
been rejected by the budget conferees. The debate on May 14 could be interesting.
        Early Reading Intervention Program. Adds $2.1 million in FY13 to fully fund
the program. Also adds language requiring school divisions to work with parents of
students who have reading deficiencies to develop a plan for remediation and retesting,
and to results of reading diagnostic tests and remediation with the student and the
student's parent prior to the student being promoted to grade four. A final language
amendment allows funds for the SOQ Prevention, Intervention, and Remediation,
Remedial Summer School, or At-Risk Add-On programs to be used for early reading
intervention. (Amendment #26, Item 139)
        Cost of competing. Adds language making the release of cost-of-competing
adjustments for support positions contingent on an evaluation by JLARC on the
methodology used in determining the COCA, including whether the adjustments are at
the appropriate level. (Amendment #28, Item 139) In addition, another amendment
requires a state agency study (Secretary of Education, Department of Education,
Department of Human Resource Management) of whether the cost-of-competing
adjustment for support personnel is needed to attract and attain employees in Northern
Virginia, and if so, in which school divisions. (Amendment #30, Item 139) The
governor’s introduced budget had eliminated the cost-of-competing funds for support
positions.
        Inflation factor. In yet another move to deny the existence of inflation for
payments for items such as utilities, gasoline and insurance, the governor offers an
amendment to specify that the rebenchmarking of education costs for these items and
other non-personal support costs for the 2016-2018 biennium will be based on 2014
costs. (Amendment #30, Item 139)
        Lottery programs. Uses an additional $7.0 million in lottery proceeds to pay for
textbooks, thereby freeing up state general funds for use for other purposes. (Amendment
#27 Item 139 and Item 3-1.01)
        Project Discovery. Reduces funding for Project Discovery by $175,000 each year
and allocates that funding to the Communities in Schools program. The governor had
eliminated funding for Project Discovery in the introduced budget. (Amendment #22,
Item 138)
        Math/science teacher recruitment. Adds $300,000 in FY13 and $400,000 in
FY14 to establish pilot programs to encourage students to major in math and science.
This initiative was included in the introduced budget but funding was removed by the
General Assembly. (Amendment # 23, Item 138)
        College Readiness Center pilot program. Removes funding of $175,000 for the
center. (Amendment #24, Item 138)
        Youth development academies. Adds $135,794 in FY13 to fund an additional
academy. These academies were an initiative included in the introduced budget.
(Amendment #25, Item 138)
        DOE Central Office. Adds $185,000 in FY13 to DOE’s budget to allow for
departmental administration of the tax credit program enacted during the General
Assembly. The tax credits will be given to businesses, etc., for scholarships for low-
income or disabled students to attend non-public schools. This amendment makes it clear
that these tax credit programs will have an effect on the general fund, which ultimately
means less funding for public education. (Amendment #21, Item 137)

Health and Human Resources
Comprehensive Services Act for At-Risk Youth and Families (CSA)
       Comprehensive program audit. Reinserts $120,000 that the General Assembly
took out for funding an audit of the program in FY13. (Amendment #35, Item 283)
        Wrap-around services for youth in special education. Retains the $2.2 million
each year that the General Assembly restored for this program; stipulates that the funding
be used in accordance with CSA policy, which allows for wrap-around services at home
or in the community (not in school) for this category of youth who are at risk of higher-
cost placements. This amendment also requires the Secretary of HHR to do an
assessment of the effectiveness of such services in placing or maintaining children in the
least restrictive settings. The report is due Jan. 1, 2013. (Amendment #36, Item 283)

Department for the Aging
        Hold-harmless funding – removes the $1 million in FY13 and $1.5 million in
FY14 that the General Assembly approved to hold Area Agencies on Aging (AAAs)
harmless from the impact of changes in federal allocations resulting from the decennial
census. (Amendment #37, Item 284)
        Pharmacy Connect. Restores $107,750 in FY 13 and $215,500 in FY14 for the
Pharmacy Connect program in Southwest Virginia that is administered by Mountain
Empire Older Citizens, Inc. The Governor’s introduced budget had cut funding by 50
percent in FY13 and eliminated it in FY14; obviously there has been a change of heart
about this program, which offers access to free prescription drugs from participating
pharmaceutical companies for adults without drug coverage. (Amendment #38, Item
284)

Department of Health
        Poison control centers. Reverses the General Assembly’s actions; puts back
$500,000 in non-general funds each year to fund this program. The source of funding is
the Emergency Medical Services Fund. Also amends the General Assembly’s language
about a report on this program to require the Secretary, not the Health Commissioner, to
report to the budget committees about the level of funding needed to support just one
center (the General Assembly wanted two centers). (Amendment #40, Item 297)

Department of Social Services
          CSA pilot in Prince William County. A back-door CSA amendment, done
through the DSS budget, would give only Prince William County $100,000 each year to
create a pilot program to improve services and the performance of facilities in the county
(i.e., to create a “systems of care” model). This would allow the county itself to keep
$10,000 of these funds each year for grant administration. (Amendment #48, Item 343)
          Information sharing. Gives Virginia Social Services, Department of Medical
Assistance Services, and DMV the legal authority, to the extent permitted by federal law,
to provide data to VITA (including private contractors) in support of projects to
modernize the eligibility determination system and the health information technology
program within the Secretariat (Amendment #49, Item 344)

Public Safety
Department of Corrections
        Town of Boydton. Provides $200,000 in FY13 and $100,000 in FY14 to further
help the town absorb the loss of wastewater utility revenue from the closed Mecklenburg
Correctional Center. The budgets approved by the General Assembly included only
funds in the current fiscal year for the town. (Amendment #53, Item 389)

Technology
Innovation and Entrepreneurship Investment Authority
      Cyber-security program. Provides $1 million each year for a cyber security
modeling and simulation program. (Amendment #55, Item 423)

Transportation
        State Review of Local Comprehensive Plans. Strikes language approved by the
General Assembly to exempt localities with state statutory responsibilities for road
maintenance from state penalties associated with “nonconforming projects” in local
comprehensive plans. Under the provisions of HB 1248 and SB 639, if localities or
metropolitan planning organizations do not amend their plans when they conflict with
state plans, the CTB is authorized to reallocate funding from the nonconforming project
as permitted by state and federal law. (Amendment #58, Item 445)

Veterans Affairs and Homeland Security
         BRAC. Provides a $7.5 million appropriation in FY13 to assist impacted
localities with a U.S. Navy Master Jet Base (i.e., Virginia Beach) conform with the 2005
BRAC recommendations. (Amendment #59, Item 459)
         Fort Monroe Support Center. Provides $199,900 in FY13 and $187,612 in
FY14 to establish and operate the Fort Monroe Freedom Support Center, a one-stop
service facility for families of deployed military service members, transitioning service
members, and veterans. (Amendment #60, Item 462)

				
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