Governor Warner Announces Amendments to Budget Bill
Governor Warner Announces Amendments to Budget Bill
Governor Mark R. Warner today announced his amendments to House Bill 1500, Additional appropriations for 2004-2006 biennium.
"In general, our joint efforts reflected our shared purpose that appropriations made in this session should sustain the long-term financial stability of the Commonwealth," said Governor Warner in his message to legislators. "This is crucial if we are to avoid creating again the kind of serious budget shortfall that we spent more than two years addressing. As a result of our collective actions, Virginia stands recognized as the best financially managed state in the nation. Our challenge now is to maintain that standing. The amendments I am proposing are concentrated on economic investment and missed opportunities."
Governor's Message to the General Assembly
I approve the general purpose of this bill, but I am returning it without my approval with the request that the attached 30 amendments be adopted.
I begin this message by expressing my appreciation to the members of the House of Delegates and the Senate for all that was accomplished in the past session in a bipartisan spirit of cooperative action. Our collaborative efforts resulted in an appropriation bill that goes far in addressing unmet requirements of state government. We were fortunate that additional funds were available for this purpose.
The budget that was adopted fully funds the state share of the cost of meeting the Standards of Quality, and provides additional resources for higher education. It takes an important first step in addressing our pressing needs in transportation, with the largest cash infusion of funds in Virginia's history. It makes significant progress on our commitments to clean up the Chesapeake Bay. And, it funds capital projects on a pay-as-you-go basis without the issuance of tax-supported bonds. On these and many other fronts, the bill that you passed moves Virginia forward.
In general, our joint efforts reflected our shared purpose that appropriations made in this session should sustain the long-term financial stability of the Commonwealth. This is crucial if we are to avoid creating again the kind of serious budget shortfall that we spent more than two years addressing. As a result of our collective actions, Virginia stands recognized as the best financially managed state in the nation. Our challenge now is to maintain that standing.
The amendments I am proposing are concentrated on economic investment and missed opportunities. Several amendments address what I believe are unintended consequences, include issues which should not wait until the next session, or make technical corrections to the budget which was enacted.
Economic Development and Investment Opportunities (Item 506)
I have proposed that funding be added to Item 506 in the Central Appropriations section of the enrolled budget, which now contains $48.1 million in general fund appropriations for several distinct activities and purposes. Item 506 currently includes funds for the Governor's Development Opportunity Fund, post-secondary educational opportunities in Southside Virginia, the microelectronic endowment at Virginia Commonwealth University, the Virginia Horse Center, rent and telecommunication increases for state agencies, review of the enterprise-wide technology PPEIA proposals, legal defense, and dredging of the Appomattox River. I am recommending that funding in this item be increased by $15.8 million to provide state support for the following purposes:
* Compression Pay for State Police, Capitol Police, Sheriffs, and Deputy Sheriffs;
* Life insurance premiums for deployed members of the Virginia National Guard;
* Virginia Modeling, Analysis and Simulation Center;
* Land acquisition and related costs at the Virginia Biotechnology Research Park;
* Career and technical training, testing, and certification;
* Federal revenue maximization for the school nutrition program;
* Rural and cultural economic development and tourism;
* Appomattox River dredging;
* Virginia Horse Center;
* Grace E. Harris Leadership Institute;
* Salem Civic Center sales tax language; and
* Improvements to Route 30 for the State Fair
Part of the funds required to support these amounts is provided through language provisions that identify general fund savings in Medicaid, to account for projected Health Care Fund increases, and in the Treasury Board, to account for anticipated debt service savings.
The most significant of these actions are:
Compression Pay for State Police, Capitol Police, Sheriffs, and Deputy Sheriffs. The General Assembly attempted to help address pay inequity issues for state and state-supported local employees in proposed additions to the budget, but did not include this additional funding for law enforcement officers under the State Police, Capitol Police, and Sheriffs. I believe this omission exacerbates the problem law enforcement agencies are having in retaining seasoned law enforcement officers. Thus, I am including additional funding to increase the salaries of those officers in the funding provided in this item. This will help law enforcement agencies maintain staffing levels and improve operational effectiveness.
Life insurance premiums for deployed members of the Virginia National Guard. This action would provide funding for the state to pay the military life insurance premium for all Virginia National Guard soldiers deployed as part of Operation Enduring Freedom, Operation Noble Eagle, or Operation Iraqi Freedom. Currently, members of the guard must pay out-of-pocket the premiums on life insurance policies up to $250,000. Given that some National Guard soldiers may forego insurance coverage due to its cost, this action would ensure that the coverage is provided, and that every soldier's family is protected financially. Finally, this action would help in the recruitment and retention of National Guard soldiers.
Support for the Virginia Modeling, Analysis and Simulation Center. The use of mathematical modeling and computer simulation to explore complex problems, particularly in defense and homeland security, has grown enormously in recent years. States which are well positioned to take advantage of that growth benefit substantially. The economic contribution of this sector to Virginia for FY 2004 is estimated at $413 million. The Virginia Modeling, Analysis and Simulation Center at Old Dominion University is the focal point of Virginia's activity. We recently became aware of an opportunity to make Virginia preeminent in this field and further enhance the economic benefits to the state. I am therefore recommending that we strengthen Virginia's capacity in modeling and simulation by adding funding to support focused research efforts and collaborative projects with the U.S. Joint Forces Command headquartered in Norfolk.
Support for rural and cultural economic development and tourism. While the General Assembly adopted some actions to strengthen cultural and economic development in rural Virginia, I am proposing certain additional strategies for that purpose. My amendments are targeted to those strategies and will produce measurable results in Southside and Southwest Virginia. The funding I am recommending is focused on boosting tourism, providing regional grants to support identified workforce training requirements of existing businesses in distressed regions, and providing funds to assist localities in acquiring and developing closed industrial sites. Language requires that I submit a spending plan to you before committing this additional funding.
Support to maximize federal revenue for the school nutrition program. The introduced budget included additional state funding to support school nutrition, in the form of a 5-cent per meal state subsidy for school breakfasts. The enacted budget did not include that appropriation. I remain convinced, however, that the need is pressing and the case for additional state support is compelling. Numerous studies have documented the clear connection between nutrition and student learning, and between nutrition and future health.
I believe we have a unique opportunity to improve student nutrition and at the same time increase federal funds that support school nutrition programs. In this item, I am recommending a 20-cent reimbursement incentive available only to schools which increase the number of breakfasts served. Local divisions may not use this additional state support to supplant funds they are already spending on nutrition programs. This additional state support will provide a return of up to 6 to 1 in additional federal funding for every state dollar spent. We can and should maximize federal revenue for this important purpose.
Career and technical training, testing, and certification. The economic vitality of the Commonwealth relies, in large measure, on the education and skill level of our citizens. In order to encourage high school students who are not college-bound to continue working toward high school graduation and pursue technical training for an industry certification, we need funding to support the costs of technical training, testing, and certification. My amendments provide funding to public schools and community colleges to pay the cost of training and testing which leads to industry certification in specific trades.
Other Spending Amendments
I am also submitting amendments to cover the cost of training and travel for veterans service representatives, in accordance with the new guidelines stipulated in House Bill 2851 (2005). My amendments also restore funding and positions for the Department of Minority Business Enterprise to enable the agency to fulfill its mission, address the findings of the recent disparity study, and to effectively implement the Small, Women, and Minority-owned (SWAM) business procurement initiative. I also added a total of $3.5 million in state support for cultural and historic attractions, to recognize the role they play in stimulating tourism and improving the quality of life for Virginians across the Commonwealth.
Language Amendments
Finally, I am including 23 language amendments to clarify existing provisions or language in the enrolled House Bill No.1500, as enrolled. Many of these provide technical clarification to provisions adopted during the 2005 session. Some provide additional administrative flexibility in addressing issues on which we agree, such as the 2005 transportation initiative. These language amendments are listed below:
* ·Site flexibility for a Virginia School for the Deaf and the Blind replacement facility;
* Flexibility for Virginia State University in the use of equipment and capital funds;
* Clarification of Non-participating Tobacco Manufacturers escrow incentive payment language to reflect Senate Bill 1332;
* Maintenance of FY 2005 formula for distribution of Older Americans Act funding;
* Submission of tuberculosis samples by Virginia Department of Health to Division of Consolidated Laboratories;
* Clarification of Department of Medical Assistance Services language on provider overpayment;
* Transfer of Council on Indians funding to the Office of Natural Resources;
* Department of Historic Resources support for Base Realignment and Closure activities;
* Authority for Department of Fire Programs to set minimum payment levels to localities;
* Elimination of VITA deficit loan repayment;
* Authorization of VDOT land exchange with Lehigh Cement Company;
* Elimination of State Police exemption from VITA;
* Use of transportation residue property;
* Extension of Local Partnership Program in VDOT;
* Use of rest stop funding on I-81;
* Clarification of the scope of a Virginia Port Authority capital project;
* Grandfathering current energy performance contracts;
* Correction of delegated authority for nongeneral fund capital projects;
* Restoration of existing policy for graduate student financial assistance;
* Revisions to Transportation Initiative of 2005 language to provide greater flexibility in designation of funding (four separate amendments)
The most significant language amendments are detailed below:
Consolidated Virginia School for the Deaf, Blind and Multi-Disabled. Language in the enrolled bill requires the consolidation of the Hampton and Staunton Schools for the Deaf, Blind and Multi-Disabled to be at a new facility location to be determined by the required study. My amendment allows existing facilities to also be considered for the location of the consolidated school. The study may find renovations and additions at an existing campus to be more cost effective than relocating to a new site.
FY 2005 funding formula for Older Americans Act. My amendment requires the Department for the Aging to continue using the existing distribution formula for Area Agencies on Aging (AAAs) until a special task force can evaluate the impact of the 2000 census and report to the Governor and General Assembly. FY 2006 budgets are in place for many local agencies, and changing the distribution formula at this time would disrupt services.
Base Realignment and Closure (BRAC) support at the Department of Historic Resources. The language requires that DHR work collaboratively with state military facilities to expedite the inventory of historic properties and to assist installation commanders in meeting Department of Defense requirements for environmental assessments. State agency cooperation is one factor used in the BRAC process for assessing the continued use of military bases.
Minimum amount of aid that Department of Fire Programs may pay to localities. Currently, state statute authorizes the Fire Services Programs Board to provide a minimum of $4,000 for towns and $10,000 for cities and counties. In 2001, the Office of the Attorney General advised the Board that it had the power to increase these minimums to $6,000 and $12,000, given increases in revenues, and payments have been made at that level since that time. A recent re-interpretation from the Office of the Attorney General concludes that the Board cannot pay these higher amounts without additional legislative authority. I am offering an amendment that would give the Board the authority to continue providing aid payments at the higher minimums until amendments can be made to the Code of Virginia.
Virginia Information Technologies Agency (VITA) deficit loan repayment requirement. The enrolled budget includes language requiring VITA to increase its rates in order to recover $6.1 million in start up costs which VITA has incurred, which were funded in the introduced bill through a general fund appropriation. The rate increase necessary to recover these costs represents a budget cut to all affected agencies, whose budgets were not funded to absorb the increase. Moreover, some of these costs cannot be charged to the federal government.
I have submitted a language amendment striking the repayment language, thereby eliminating the implicit budget cut for state agencies. Funds to cover the start-up costs will come from unobligated year-end balances, or will be addressed in next year's budget bill.
Extend Local Partnership Program. This amendment extends by one year the eligibility period for transportation projects for the Local Partnership Program. The extension will ensure full utilization of the funds provided by the General Assembly to encourage local governments to assume the responsibility for the management and administration of the design, acquisition, and construction of all non-interstate transportation facilities within their boundaries.
Rest stop funding on I-81. Language in the enrolled budget bill gives priority to the I-95 and I-64 corridors in using $20 million in funding provided for rest stop improvements. Given the heavy volume of traffic on Route I-81, I am providing an amendment to allow the Commonwealth Transportation Board to consider the needs of Route I-81 rest stops when determining the use of the $20 million.
Energy performance contracts. The enrolled budget includes language I proposed to treat energy performance projects as capital projects, if the cost of the project is greater than $3 million. I am proposing a clarifying amendment to this language that provides a grandfather clause allowing energy performance projects underway before July 1, 2005, to continue to be treated as operating expenses so as not to negatively impact present project negotiations.
Graduate student financial aid. High quality graduate students are the lifeblood of our research institutions. A 1999 SCHEV study estimated that two-thirds of all graduate students remain in Virginia. For years, it has been state policy to allow institutions to use up to 50 percent of the funds designated for graduate grants for out-of-state students. The enrolled budget bill reverses this policy by prohibiting institutions from using general fund appropriations for any new grant awards for non-Virginia graduate students. The Council of Presidents has advised me that Virginia's research institutions will not be able to attract top graduate students and compete nationally with such an extreme limitation on graduate financial aid. The enrolled bill directs a study of this issue, which I believe is warranted. Therefore, I am offering an amendment to restore the past policy of 50 percent, pending completion of the study.
Flexibility for implementing transportation initiative. I am offering four related amendments that provide flexibility to the Department of Transportation regarding the fund source and distribution of funding between fiscal years in implementing the program objectives approved by the General Assembly. Without this language, about $ 84 million in federal funds freed up by eliminating project deficits will be severely restricted in their use.
Details of Spending and Revenue Sources
http://www.governor.virginia.gov/Press_Policy/Releases/2005/Mar05/0330b.htm