HJR 432

Commission on the Condition and Future of Virginia's Cities

September 16, 1998, Norfolk

At the second meeting of the commission, the four subcommittees gave progress reports on their work to date. The Hampton Roads Mayors and Chairs Committee then gave a presentation on fiscal issues confronting Virginia and its localities.

Summit Subcommittee

The subcommittee has planned a statewide summit to take place in Charlottesville on October 13, 1998. The all-day summit will include a keynote address, panel discussions, and small work groups. Invitations have been sent to key legislators, local government officials, and business leaders. The purposes of the summit include (i) establishing a common base of understanding among participants regarding current and past conditions of Virginia cities, (ii) educating and engaging participants in the problems faced by cities by focusing on the causes rather than the symptoms, and (iii) bringing attention to the work of the commission.

Legal Issues and Governing Structures Subcommittee

The subcommittee reported that the 40 city managers were sent a letter asking for input regarding laws that currently hinder cities from providing required services. Some of the issues mentioned in the responses included the Dillon Rule, an outdated tax system, mandates that unduly impact certain cities, the moratorium on annexation, vested rights, and the independent status of cities.

Finances and Fiscal Issues Subcommittee

The subcommittee has met on three separate occasions and has accumulated considerable data on the fiscal condition of Virginia cities. A recurring theme at the subcommittee's meetings has been the state's freezing of 599 funds during the early 1990s. The 599 funding for local law enforcement was part of a package whereby Virginia's cities lost their ability to annex territory from surrounding counties. Accordingly, members of the subcommittee made a motion at the full commission meeting that the commission go on record asking the Governor to devise a plan to return 599 funding to the level it would have been at had there been no freeze. After considerable discussion, the commission approved the motion and the chairman appointed a special subcommittee to communicate this information to the Governor with the hope that he will include this item as priority in his upcoming proposed budget amendments.

Services and Needs Subcommittee

The subcommittee reported that at its initial meeting the acting city manager of the City of Richmond spoke of a study performed several years earlier in which former city residents stated that the primary reason for relocating from the city was a lack of housing choices. Other significant reasons included crime and the education system. Taxes were not listed as a major reason for relocation. The acting city manager further stated that although many things are going well for the city, there are needs, including increased funding levels for certain services; improvements in public transportation, housing, and jobs; greater regionalization of housing assistance; and a greater willingness by the state to leave local decisions to local decision-makers. Other presentations were made by a Richmond City council member, who related other issues of concern to the city; a Richmond minister, who recounted the history and current state of racial polarization in Virginia; and an education expert, who spoke of the needs of public education in Virginia's cities.

Hampton Roads Mayors and Chairs Committee

The deputy executive director of the Hampton Roads Planning District Commission gave a presentation on selected fiscal issues. A variety of comparisons were made between different states and between Virginia localities, with an emphasis on Hampton Roads localities. The point was made that Virginia is a highly urbanized state, compared to many of its competitor states, and that it is therefore important to the health of the state that Virginia keep its urban centers healthy and growing. Unfortunately, according to statistics presented, Virginia's urban economies have under-performed in recent years and, since 1987, have generated jobs at a slower pace than the composite of urban centers of all but one of the other regions of the nation.

A variety of additional fiscal information was provided to the commission, including statistics showing that Virginia's urban centers are suffering greater fiscal stress compared to localities as a whole. The presentation concluded by asking several questions. First, how can Virginia strike an appropriate balance between the benefits of being a low-tax state and the need to invest in the infrastructure necessary to be globally competitive? Second, has the state's economy evolved in such a way as to make it necessary to change the structure of taxes and fees? Third, given the slow growth in the real estate tax base and the currently high level of fiscal effort being made by local governments, do localities have the financial resources to meet their needs? And finally, if additional sources of funding are needed for localities, what should those sources be?

Future Meetings

The next meeting of the commission will be in Roanoke, October 6, 1998, at 10:00 a.m. at the Hotel Roanoke. The statewide summit will be held October 13, 1998, in Charlottesville. Subsequent meetings will be held in Danville on November 5, 1998, in Alexandria on December 2, 1998, and in Richmond on January 5, 1999.

The Honorable Thomas W. Moss, Jr., Chair
Legislative Services contact: Jeff Sharp