Sending Money Back To Commonwealth Irks Local Governments

By David McGee
Staff Writer / Bristol Herald Courier
Published: July 24, 2008

BRISTOL, Va. – City leaders learned Wednesday they must repay about $266,000 in state funding and they expect additional cuts could be “devastating,” City Manager Bill Dennison said.

The return is part of a 4 percent reduction in state funding approved earlier this year by the General Assembly. City leaders set aside $300,000 in the current budget to meet the state requirement, listing the line item as “local aid to the commonwealth” in protest.

As the state budget continues to hemorrhage beneath the weight of diminished sales and real estate tax collections, more reductions seem certain, Dennison said.

“The General Assembly’s money committees – House Appropriations and Senate Finance – meet in mid-August,” Dennison said. “We don’t know what they’ll do, but we anticipate another round of cuts.”

Current speculation puts the figure at between 4 percent and 7 percent for the reductions, Dennison said.

“Seven percent would be devastating,” Dennison said. “With the 4.4 percent cuts this year on top of the 5 percent last October, it would just pile more onto that.”

As part of the most recent cuts, the General Assembly established a mechanism to further reduce funding to localities without additional legislative action, Dennison said.

Local governments will just have to live with less, said Kenneth Reynolds, chairman of the Washington County Board of Supervisors.

“It looks like there will be more paid back or more reductions to the counties and cities,” Reynolds said. “If that’s the way it’s going to be, we’ll just have to make some adjustments. That’s reality, sometimes.”

Washington County is sending back more than $180,000 to the state as part of the most recent cuts.

In Russell County, officials are writing a check for almost $121,000, County Administrator Jim Gillespie said.

“Yes, it hurts,” Gillespie said. “It’s always better to be on the receiving end of money. I figure there will be a second round of cuts, but I hope it won’t come until the next fiscal year.”

Under the state’s biennial budget, the county is to send back another $121,000 next year.

“I expect they’ll add onto that,” Gillespie said, adding that any cuts hurt when the price of fuel for sheriff’s cruisers and school buses continues to climb.

Bristol Virginia officials expect to receive more than $15.6 million from the state in fiscal 2008-09, while the city school system expects to get $12.8 million in state money.

Dennison and Mayor Jim Rector discussed the dilemma at the conclusion of Tuesday’s City Council meeting, citing the school system and police department as possible targets.

“So far, K-12 education has largely escaped the cuts and there seems to be a bull’s-eye squarely on that program,” Dennison said. “If that happens, the local [school] boards will be coming to local governments with their hands out. And you [the city council] will have to make up those cuts from local sources.”

Rector said the city plans to ask area lawmakers to consider cutting mandates associated with any money that may be reduced.

“It’s not good. I expect another round of cuts, and I expect we’ll [council] meet in October to review our budget and determine what cuts we can make,” the mayor said.

The state also could trim funding for local police departments, Dennison said. Known as 599 funding for the House bill that two decades ago implemented the program to help fund law enforcement, it comprises a significant portion of the city budget.

“There is some fairly widespread sentiment in the House to eliminate 599 funding,” Dennison said. “That would mean $1.2 million to us. That is 20 percent of our local police budget.”

State funding for the city’s police department was reduced by $60,000 as part of the October round of cuts.

| (276) 645-2532