As I sit here on a Sunday night watching the historic vote on healthcare reform legislation unfold before my eyes, it is hard to remember that it was just one week ago that the Virginia General Assembly passed a budget and adjourned for this session. Our efforts in the Assembly this year pale in comparison to the courageous stands that many are taking in Washington to pass a bill that has eluded this country for at least sixty years. Many will remember where they were on this historic occasion.

The budget passed by the General Assembly was far better than the one that emerged from the House of Delegates on February 25, 2010. The House budget would have decimated K-12 education, with cuts of more than $700 million over and above the cuts proposed by Governor Kaine in his introduced budget. The House budget, which included the so-called “Bell Amendment” which would have transferred $5.6 million in City school funding directly to Albemarle County schools, was a disaster for both Charlottesville and Albemarle. Charlottesville school funding would have been slashed by 35 percent and Albemarle’s by almost 15 percent. In addition, the House budget made substantial cuts in Medicaid, social services funding, and funding for the arts.

Fortunately, in the weeks following the House budget, legislators heard loudly and clearly from their constituents, and the Senate of Virginia held firm against the extensive cuts proposed by the House. In the end, the new budget still includes cuts to K-12 education (about $250 million over and above Governor Kaine’s proposal), but many other items were restored and school divisions such as Charlottesville and Albemarle both benefited greatly. While neither the House nor the Senate was willing to raise taxes, they included some fees in the budget, most notably in the area of recording costs on deeds and in court processing fees.

The budget was balanced primarily because of two factors. First, despite House Republicans’ stated unwillingness to accept federal monies, there were projected federal funds included in the budget that lessened the cuts in the Medicaid budget. In addition, some $620 million was “borrowed” from the state Retirement System, conditional upon repayment over ten years at 7.5 percent interest per year beginning in 2013. This was very troubling because I believe our retirement system needs to be strong so that state employees who come to rely on it will receive the benefits to which they are entitled upon their retirement. Beyond this, this borrowing imposes an additional obligation on the General Fund that will need to be repaid at some point in time. If the economy does not significantly improve, the only choice may be to go further into K-12 for cuts to fund the repayment.

If one looks further out than this year, the Commonwealth has some very serious issues that it is failing to address. Our tax system is antiquated and far too regressive. If we were to impose a surcharge on the highest incomes in Virginia, it would raise monies that could fill gaps in critical core services that our constituents consider important. In addition, our Transportation Trust Fund will no longer be able to access federal dollars without additional state monies being raised. To think we are going to solve these problems by selling off our liquor stores or by royalties from drilling for oil and gas off our coast is fanciful; even if these efforts were to bring some additional revenue, it is not likely to be enough to address our critical problems.

I will continue to fight to adequately fund our infrastructure and the core services that our citizens consider important, and will need your help in the months and years ahead to do so.

I am now back in Charlottesville, and encourage you to engage in what will be a priority of mine in the next several months, that is, attempting to facilitate a discussion between Charlottesville and Albemarle to develop a process by which they can work more closely together, thereby saving money and providing a higher level of service to our citizens. I have convened a meeting on April 24, 2010, with the School Boards and both elected bodies, and have begun a blog that will explore City/County cooperation. I hope you will participate in the discussion and offer your suggestions on how we might move forward.

I am available to speak to groups who may wish to get an update on the General Assembly session and to talk with constituents about ideas they have for future legislation or priorities that we need to be embracing.

It is an honor representing you in the Virginia House of Delegates.

As always, I appreciate hearing your thoughts and concerns about legislative matters. Please call the Charlottesville office at (434) 220-1660, send emails to deldtoscano@house.state.va.us, or send letters to David Toscano, 211 E. High St, Charlottesville, VA 22902.

Sincerely,

David Toscano

On Friday, February 5, 2010, the General Assembly, for the first time in at least 50 years, cancelled its regular Session because of the snowstorm.  I sympathize with those of you who were without power and substantially inconvenienced over the past few days and I trust schools will reopen soon.  Considering what happened in Northern Virginia, where approximately 37 inches fell on the Front Royal area and 33 inches fell in Fairfax, Charlottesville and Albemarle were lucky in this storm. Recovering from aftermath will be challenging, and I hope that we will be patient as our state and local public works employees attempt to remove the snow and help us return to some degree of normality.

The VDOT budget for snow removal is now exhausted for this year. VDOT will now invade a $25 million “rainy day” fund that would otherwise have gone for maintenance.  This will simply exacerbate the problems that we already have in our Transportation Trust Fund, and there is little evidence that either the Governor or the General Assembly will do much, if anything, to replenish this account.

Governor McDonnell Silent on the Budget

On the budgetary front, Governor McDonnell remains relatively invisible at this point. Newly-elected Governors typically submit budget amendments early in a Session that reflect their priorities. For whatever reason, Governor McDonnell has stayed on the sidelines. We have heard rumors that he may submit some budget amendments in the next week or so, but some people are beginning to believe that he will leave the House Republicans to make the additional $2 billion in cuts rather than take a position as to his priorities. We will simply have to see.

Charlottesville / Albemarle Revenue Sharing Agreement

The other major issue heating up Richmond and our area has to do with the effort by Delegate Bell to get around the City/County Revenue Sharing Agreement through a budget amendment that will simply transfer $2.6 million from City schools to County schools. For those of you not familiar with the Revenue Sharing Agreement, it was negotiated in the early 1980s in the context of a possible City annexation of County property. The agreement was supported by both governing bodies, and then submitted for a referendum to City and County voters, where it passed by wide margins in both localities. Now, there is an effort in the General Assembly by modifying the composite index formula by which schools are funded to acknowledge the percentage of County property tax given to the City through the Agreement and transfer the difference from the City to the County.

Such a transfer would greatly impact City schools. It represents an amount equal to over 4 cents on the real estate tax rate. If not replaced, the cut would likely increase pupil-teacher ratios and might cause layoffs. And make no mistake about it – such an amendment simply undercuts an agreement that was negotiated by the elected officials in both jurisdictions and approved by the voters.  At the time the agreement was signed, the composite index had been in effect for a number of years, and it was referenced directly in the City-County agreement. What the General Assembly is now considering doing is what it typically does not do; that is, undermining a contract between jurisdictions, passed by both elected bodies and the voters. This would be unprecedented and would be of extreme concern to all jurisdictions that have revenue sharing agreements or long term contractual obligations. 

I believe that the City and the County have to do much more in the area of consolidation and cooperation and that the way to address our problems is through cooperation rather than division. The Revenue Sharing Agreement has worked well for the community. If it had not been approved, the City would have annexed substantial real estate, and generated revenue much in excess of what it receives yearly from Albemarle.  Albemarle, to replace this revenue, would likely have had to expand commercial development into the rural areas of the County, which few in our area would have liked. Consequently, I will be asking City and County leaders to convene a summit related to inter-jurisdictional cooperation in hopes that we may find some long-term solutions to some of our challenging budgetary issues.  This is what we have always done in our area, and we do not need to have the General Assembly dictating how we should resolve our problems.

My Legislative Initiatives

In other news, my bill that would have expanded health insurance benefits to dependents under the age of 27 who continue to reside with their families received a boost by being referred to what is called the Mandated Benefits Commission so that the state can evaluate the impact of this potential change.  This bill would benefit a group of citizens who are not typically insured with little cost to either the Commonwealth or insurance companies.

Three of my four energy bills received a hearing in the subcommittee on energy on Tuesday, and I will report their outcome in my next update.

Please feel free to keep me informed of your concerns and to provide input on any bills that you are watching this Session.  It is pleasure serving you as your delegate.