Tuesday, February 9, 2010

Virginia General Assembly: Rob Bell's Budget Amendment Pits Albemarle Versus Charlottesville

There's no doubt about which proposal in this year's General Assembly is receiving the most attention in Charlottesville and Albemarle during the snowy winter of 2010: the clear winner is Delegate Rob Bell's budget proposal for tweaking (or -- depending on one's perspective --significantly revising) the state's composite-index education funding formula.

Delegate Bell's proposal would have the effect of transferring $2.6 million in state funding from the City to the County in fiscal 2012.

Rachana Dixit and Brandon Shulleeta have a good summary of the debate surrounding the proposal in last Saturday's Daily Progress, here.

Delegate Bell's position is that that Albemarle County is unfairly losing out on state education funding because the composite index fails to account for the yearly amounts that are transferred from the County to the City under the 1982 revenue sharing agreement. In the most recent year, for instance, Albemarle transferred more than $18 million to the City -- but for purposes of the composite formula, that $18 million was deemed to be available to the County, not the City.

The stakes are high, as both the County and City (along with localities nationwide) are experiencing significant declines in revenue from real estate and transfer taxes and a range of other fees.

For the legislative process buffs out there, Delegate Bell's budget amendment reads as follows:

On Page 79, after line 24, insert:

"11. In recognition of Albemarle County and the City of Charlottesville being in an active annexation and revenue sharing agreement that requires a revenue transfer from Albemarle to Charlottesville, with a maximum transfer amount capped at ten percent of the applicable real estate tax base year for Albemarle, Albemarle shall have an equal percentage amount excluded from the local true property value total amount used in calculating Albemarle's composite index for the 2010-2012 biennium. For the purposes of the composite index updates for the 2010-2012 biennium, Albemarle's true property value shall be reduced by ten percent from $19,007,534,323 to $17,106,780,891. The City of Charlottesville shall have its Standards of Quality Basic Aid payment reduced by an amount equal to the increase provided to Albemarle pursuant to the local composite index adjustment."

The controversial part of Delegate Bell's amendment is the portion highlighted in red, which provides for a decrease in Charlottesville's funding comparable to the increase in Albemarle's.

Delegate David Toscano has offered an alternative proposal that would acknowledge the revenue transfer from Albemarle (thereby decreasing the County's "true property value" and increasing their share of funding from the state) but without "punishing" the City of Charlottesville by reducing its aid payment by an equal amount.

Delegate Bell argues that Delegate Toscano's proposal would be wonderful in an "everybody wins" world but that in the budget-cutting reality of 2010 it does not have any chance of garnering the necessary support in Richmond.

It will be very interesting to see how this issue evolves at both the local and state levels and, in particuar, whether the City and County are able to arrive at a compromise position that both can live with.