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Richmond Briefing
Veto
Session
On Wednesday, lawmakers
returned to Richmond to consider amendments proposed by Governor
McDonnell to the state's two-year spending plan and legislation passed
during the 60-day session earlier this year. While the General Assembly
approved more than 90% of the Governor's 200+ amendments, a few
contentious issues, like restrictions on state funding for abortion
services and proposed cuts to public broadcasting, led to prolonged
bouts of spirited debate.
On a positive note, the
Governor was able to secure an additional $6 million for the Governor's
Opportunity Fund in year two of the budget. In addition, lawmakers
approved an amendment that would restore 2/3 of the Section 199 Domestic
Production Deduction (DPD), an important tax deduction that makes
domestic companies more competitive. Originally, this major tax policy
change was imbedded in the biennial budget. Had the Governor not amended
this budgetary maneuver, Virginia's reputation for sound fiscal
management and transparency would have been damaged.
Finally, the Governor
tweaked legislative language that would have permanently eliminated the
'dealer discounts,' a tax policy implemented in the 1960s that provides
a small reimbursement to retailers for the costs they incur while acting
as tax collection agents for the state. The House and Senate agreed
to suspend rather than eliminate the dealer discounts.
Special
Elections - House of Delegates
Governor McDonnell recently
announced that special elections to fill two vacant seats in the House
of Delegates will occur on Tuesday, June 15th. Former Delegate Sam
Nixon recently left his 27th House district seat to head the beleaguered
Virginia Information Technologies Agency. So far, Chesterfield
Optometrist Roxan Robinson is the only officially declared candidate,
though many are expected to run in this solidly Republican district. In
the 26th House district, which includes the City of Harrisonburg and
northern parts of Rockingham County, voters will pick choose a
replacement for Delegate Matt Lohr who was recently appointed as
Commissioner of the Virginia Department of Agriculture and Consumer
Services. The filing deadline for both seats is Friday, May 14th.
See more here.
Audits
Galore for VDOT
On Monday, Governor McDonnell announced a series of independent
audits of the Virginia Department of Transportation launched to identify
ways to improve agency performance and transparency. According
to the Governor's news release,
the transportation reviews underway include:
- HB42
and SB201,
which commission the Joint Legislative Audit and Review Commission
to conduct a review of the commonwealth's planning and programming
activities.
- An independent performance audit of
operations and maintenance practices at VDOT to be conducted by
Cherry, Bekaert and Holland, LLP.
- A review of research programs
administered by the Virginia Transportation Research Council to be
conducted by the Turner Fairbanks Highway Research Center at the
Federal Highway Administration.
- A program assessment of the Virginia
Public-Private Transportation Act program to develop standardized
goals, processes, priorities and program delivery tools for these
public-private projects. This review will be conducted by KPMG
Corporate Finance, LLC.
The underlying goal of these audits may
be to lay the groundwork for a special session on transportation, an
issue that has been mired in partisan gridlock for the several
years. VA West and several other business organizations throughout
the Commonwealth eagerly await any substantive steps that will lead to
improving Virginia's aging transportation network.
On a related note, VDOT will complete a
final round of layoffs under their restructuring program this week. With
approximately 360 employees leaving the agency on Saturday, VDOT will
have completed its mandated goal of reducing its staff by 1,000
full-time and 450 part-time employees.
Debate
over Stormwater Regs Continues
During the 2010 session, a compromise was brokered that would
delay the implementation of new statewide stormwater regulations (see HB1220
and SB395).
Two Republican lawmakers are now challenging the accuracy of an
Environmental Protection Agency (EPA) statistic upon which the new
regulations will largely be based. Armed with the analysis from Wetland
Studies and Solutions, Inc, a private firm located in Prince William
County, Delegate Tim Hugo (R-Fairfax) and Senator Ryan McDougle
(R-Hanover) claim that a widely cited EPA statistic about the growth of
impervious surfaces in six Chesapeake Bay watershed states is
inaccurate. In a letter to the Governor, Hugo and McDougle request that
the Governor explore why the EPA continues to use faulty data and urge
the Governor to insist that all state agencies and the EPA use sound
science, the favorite mantra of doubting thomases everywhere, as the
basis for new statewide storm water regulations. See more here.
Offshore
Drilling and the Feds
A few weeks ago Governor
McDonnell signed legislation (HB756)
that would allow Virginia to become the first state on the East coast to
collect future royalties from offshore oil and natural gas resources. A
proposed sale of oil and natural leases in a tract 50 miles off of the
Virginia coast could begin as early as 2012. However, a major hurdle
must be overcome at the federal level before Virginia would reap any
benefit from these offshore resources. Currently, there is no revenue
sharing agreement between Virginia and the federal government. Four
coastal states do share 37.5 % of revenues from drilling in the Gulf of
Mexico. However, the Senate last year soundly defeated a revenue sharing
proposal for other coastal states. According to a recent Politico article,
three interior- state Democrats who also chair important Senate
committees remain opposed to a new revenue sharing agreement. However,
should a provision for revenue sharing be included a broader Senate
climate bill that is currently gaining momentum, the prospects for a
compromise on revenue sharing improve considerably.
Stat of the
Month: 7.4% See more here.
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