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SAVE THE DATE THE CHAMBER'S ANNUAL LEGISLATIVE
WRAP-UP Action Alert! Next week, a House
Commerce and Labor subcommittee will hear SB239,
a bill sponsored by Senator John Watkins (R-Midlothian) that
would permanently expand the number of individuals who qualify for
unemployment compensation. The House version of this bill was
already tabled by the same House subcommittee. In exchange for an
additional $125 million in stimulus funds, SB239
would provide unemployment benefits to individuals enrolled in job
training and would waive a current requirement that one must be
available for and actively looking for full time work. This
legislation would also expand benefits to individuals who
voluntarily leave work for a "compelling reason." Budget Negotiations Underway
"In my 49 years as a member of the House, I have not seen a budget situation this bad." Delegate Lacey Putney, chairman, House Appropriations Committee
On Thursday, the House and Senate approved their respective budget plans, setting the stage for a Conference Committee that must reconcile each Chamber's competing vision on how to close Virginia's unprecedented $4.2 billion budget shortfall. During a spirited debate on the House floor Thursday, delegates tussled over the potential impact of the drastic cuts to areas such as education, health care, and public safety. Delegate Kirk Cox, a budget conferee for the House, reminded members that business-as-usual will no longer suffice and that state government must adapt to current economic realities. Local Delegate Onzlee Ware urged his colleagues to remain open to compromise in order meet this unique challenge. The Democratic-led Senate approved its budget plan on a 30-10 vote, including nine Republicans. The Republican-led House approved its version of the budget on a 61-38 vote with no Democratic support.
Below are links to state budget documents:
For a tutorial on how Virginia's budget is structured, click here.
Highlights of the House and Senate Budgets by Category
Arts The
House budget reduces funding for the Virginia Commission for the
Arts by $2.2 million or 50% in FY2011 and eliminates the Commission
altogether in FY2012. The Senate budget holds funding at $4.4 million annually. The
Virginia Commission for the Arts provides funding to both to localities,
including many small communities, and to individual artists and organizations for projects,
cultural programs, and general operating expenses.
Dealer
Discount The Senate budget eliminates the Dealers Discount.
Economic
Development The Senate contains only $11 million of McDonnell's requests. However, the Senate bill does contain several million for development incentives ranging from sales tax exemptions, green jobs tax credits, and mega-project site grants.
Education The
Senate budget cuts K-12 education by $133 million. ($37.4 million in
FY2011, $95.6 million in FY2012). Both
Chambers also rejected Governor Kaine's proposal to freeze the
composite index, the formula used to calculate how much localities
receive from the state for public education. Both Chambers, however,
contain 'hold harmless' funding to all school divisions to help
localities that would lose money when the updated funding formula is
implemented. In addition, school divisions can increase maximum
class size by one student temporarily. Finally, neither budget eliminates
stipends for school personnel that oversee extracurricular
activities or the state share of a school breakfast program,
austerity measures proposed by Governor McDonnell.
Fees
Health
Care Note: Virginia is already among the lowest in Medicaid reimbursement rates. There is a possibility that Virginia could receive an additional $350 million infusion of federal stimulus funds to offset some of these cuts.
Higher
Education Planning District Commissions The Senate budget eliminates state funding for Planning District Commissions, such as the Roanoke Valley-Alleghany Regional Commission.
Public
Safety The Senate restores less and uses legislation sponsored by Senator Richard Stuart (R-Montross) to provide around $50 million per year to sheriffs and commonwealth attorneys by increasing civil court fees.
State Workers The House budget does not include the five annual furlough days for state workers requested by Governor McDonnell. The Senate budget contains three annual furlough days for state employees. Both budgets reduce state payments to the Virginia Retirement System and provide for a 3% bonus to all employees in December 2011.
House Budget Conferees Lacey
E. Putney (I-Bedford, chairman of House Appropriations
Committee) Steve
Landes (R-Augusta
County) Johnny Joannou (D-Portsmouth)
Senate Budget Conferees Charles
Colgan (D-Prince William, Chairman of Senate Finance)
Boucher v. Griffith in the Fightin' 9th? While the budget has dominated much of the political discussion during this year's session, a potential electoral match up between long-time incumbent Democratic Congressman Rick Boucher and current Virginia House Majority Leader H. Morgan Griffith (R-Salem/Parts of Roanoke County) in Virginia's 'Fightin' 9th District' (Map) has created a wave of anticipation amongst reporters and political junkies. Known for his combative debates on the House Floor, Griffith was elected House Majority Leader in 1999. Boucher has served the 9th District since 1983. Several other Republicans and at least one independent have also indicated they plan to run. See more here. The filing deadline for Republicans seeking the nomination is March 1. Independents have until June 8th to file.
Other Notable Legislation
Autism Mandate Fails to Advance Senator Janet Howell's legislation (SB464) that would mandate that insurers provide coverage for the diagnosis and treatment of autism spectrum disorder was tabled in a House Commerce and Labor subcommittee on Tuesday. This legislation would have mandated coverage for autism related services for children between the ages of 2-6 and had an annual cap of $35, 000.00. The mandate would not have applied to the state's employees' health insurance plan until July 1, 2015. Delegate Jeion Ward offered an amendment that would have required that both private insurers and the state health plan include the autism mandate by July 1, 2012. Her amendment was rejected by voice vote. The Chamber opposes additional mandates.
County Meals Tax Bill Swallowed Legislation sponsored by Senator Frederick Qualye (R-Suffolk) that would have removed the current 4% cap on the county meals tax and would allow counties to increase the meals tax by a majority vote of the elected members of a county's governing body was tabled in a House subcommittee on Wednesday. Under current law, a meals tax imposed by a county cannot exceed 4% and must be adopted through voter referendum. The Counties of Roanoke, Montgomery, Rockbridge, Frederick and Arlington have authority to adopt the meals tax (not to exceed 4%) provided that the governing body holds a public hearing and the governing body votes unanimously to adopt the tax by local ordinance. Cities and towns have the ability to levy taxes on meals without a voter referendum. The Chamber supports equal taxing authority for cities & counties.
Bill to Index Gas Tax Postponed? Legislation that would have linked Virginia's gas tax with federal fuel efficiency (CAFE) standards was carried over for the session by a House Finance subcommittee this week. Sponsored by Senator Emmett Hanger (R-Mount Solon), SB343 would have adjusted Virginia's current flat 17.5 percent per gallon gasoline tax based on the yearly percentage increase in CAFE standards. Supporters of the bill argued that as cars become more and more fuel efficient, the state will receive less and less revenue from the flat per-gallon fee. By indexing Virginia's gas tax to CAFE standards, the effective gas tax would also increase to provide needed funding for Virginia's deteriorating transportation infrastructure. Although the bill was carried over, subcommittee chair Tim Hugo (R-Fairfax) stated that the concept is worth revisiting during a special session on transportation tentatively being planned for later this year. The Chamber supports indexing the gas tax to federal CAFE standards.
Offshore Drilling Clears Senate Delegate Chris Stolle's legislation that would allow the Commonwealth to collect future royalties from offshore oil and natural gas resources passed the Senate on Monday on a 21-19 vote. A majority of these potential royalties would flow to the Transportation Trust Fund with the remainder directed to the Virginia Coastal Energy Research Consortium and localities for improvements to infrastructure and transportation. An attempt by Senate Majority Leader Dick Saslaw to redirect future monies to the state's General Fund was narrowly defeated. Two weeks ago, the Senate sent a similar Senate version of this legislation back to committee to be carried over for the year. The bill will now go to Governor McDonnell for approval. The Governor must now lobby the federal government to not delay a planned 2011 lease sale on drill sites.
The "Amazon" Bill - Update On Wednesday, a tax averse House Finance subcommittee tabled legislation (SB660) sponsored by Senator Emmett Hanger (R-Augusta) that would have required on-line retailers to collect sales taxes from their customers in Virginia. According to an estimate by the Virginia Retail Federation, this legislation could have generated $17 million in tax revenue. Opponents countered by pointing out that this legislation could lead on-line retailers to sever their ties with affiliates in the Commonwealth who refer Virginia shoppers to websites like Amazon and Overstock. These affiliates would lose commissions and referral fees. To bolster their argument, opponents stated that many other states have rejected similar legislation over threats of costly litigation in addition to the potential loss of revenue for state affiliates. A language amendment in the Senate budget would also require large Internet retailers to pay sales tax to the state on sales conducted through Virginia-based affiliates.
March 13th - Adjourn Sine Die
Video
To view live video or hear live audio from the House and Senate floor sessions, click here.
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