HJR 159: Joint Subcommittee to Study
the Operations, Practices, Duties, and Funding of Virginia's Agencies,
Boards, Commissions, Councils, and Other Governmental Entities
June 19, 2002
The joint subcommittee opened its organizational
session by hearing from the patron of the resolution, Delegate McDonnell,
regarding his reasons for introducing HJR 159. Delegate McDonnell explained
that he had observed a disturbing tendency of government to grow and expand
in a vacuum. While the number of boards and commissions has grown virtually
unchecked in recent years, no one knows whether these entities are attaining
desired results. He believed that the legislature needed to take a systematic
look at each board’s statutory mission, budget, duties, and responsibilities
and compare these with the board’s actual activities and practices. While
he acknowledged that the scope of HJR 159 was broad enough to give the
subcommittee wide discretion in examining any entity of state government,
he suggested that a good place to start was with the boards and commissions
in the executive branch. He also emphasized the importance of developing
a uniform set of criteria to evaluate objectively these entities.
In his opening remarks, Chairman O’Brien
outlined his vision of the subcommittee’s work and proceedings. After
selecting entities for further review based upon objective criteria, the
subcommittee would invite representatives of those entities to appear
at future meetings to answer questions and provide additional information.
Based on the criteria and testimony provided, the subcommittee would determine
if certain changes were needed, including (i) the elimination or consolidation
of the entity, (ii) redefinition of its mission, (iii) clarification,
expansion, or reduction of its responsibilities and duties, and (iv) right-sizing
of its staff and other resources.
Spending Trends in Virginia
Staff of the Joint Legislative Audit and
Review Commission (JLARC) presented an overview of state spending trends.
The presentation material was drawn from the JLARC report, Interim
Report: Review of State Spending (HD 30, 2002) and an updated version
of that report not yet published. The presentation documented growth in
state expenditures and appropriations between FY 1981 and FY 2001. In
addition, the presentation reviewed the legislative role in performance
evaluation and performance budgeting.
In FY 2001, 52 percent of the state operating
budget was funded by general funds. Since FY 1981, spending increased
at a 7.4 percent annual average rate not adjusted for inflation or population.
Per capita, inflation-adjusted spending increased at a 2.3 percent annual
average rate (see Figure 1). Spending growth can be explained by inflation,
changes in state demographics and economic activity, Virginia-specific
initiatives, and federal mandates. For instance, Virginia’s population
and economic growth exceeded the 50-state averages. Service populations
in major programs also increased over the 21-year period: primary and
secondary education (up 10 percent), college enrollment (up 25 percent),
registered vehicles (up 54 percent), Medicaid-eligible individuals (up
131 percent), and the state prison inmate population (up 296 percent).
Figure 1: Total Spending
per Capita, 1981-2001.
Total Spending Per Capita
Total spending in FY 2001 was $18.5 billion
more than in FY 1981. Most spending growth was concentrated in the education
and individual and family services functional areas, which grew by $5.7
and $5.0 billion, respectively. In terms of percentage growth rates, however,
general government and administration of justice grew the fastest, at
184 percent and 131 percent, respectively, in per capita, inflation-adjusted
terms. These fastest growing functional area increases were driven largely
by personal property tax relief and prison system expansion.
Functional spending growth is directly related
to spending growth in the programs and agencies contained within functional
areas. Spending growth was concentrated in a relatively few agencies.
The Departments of Education and Medical Assistance Services accounted
for over 40 percent of general fund budget growth. The universities and
the Department of Transportation accounted for over 40 percent of non-general
fund budget growth.
This budget and spending growth was, however,
not unusual when compared to spending growth in other states. Between
FY 1981 and FY 1999, Virginia’s total spending rank did not change from
36th place among the 50 states. The per capita, inflation-adjusted dollar
increase in Virginia was less than the 50-state average increase, yet
Virginia did experience a slightly larger percentage increase than the
50-state average. Virginia ranks higher than most states in spending on
police protection, corrections, and transportation; slightly below the
middle of all states in total education spending; and well below the middle
in terms of spending on public welfare, hospitals, health, natural resources,
and parks and recreation.
Virginia began its performance measurement
activities as far back as 1990. Performance measurement information is
maintained by the Department of Planning and Budget. The General Assembly,
through JLARC and the Auditor of Public Accounts, reviews the performance
measurement process. The General Assembly does not currently play an active
role in developing performance measures for state agencies. Virginia is
a leader among the states in performance management, yet more intensive
involvement by executive and legislative decision makers is necessary
to reach a system that provides the most effective information.
State Agencies and Collegial Bodies
A JLARC analyst described the number and
type of agencies and collegial bodies within Virginia state government.
Using the definitions below, a preliminary count indicates that there
are 144 agencies and 353 collegial bodies.
State Agency: A unit of state government
located in the legislative, judicial, or executive branches, or one of
the independent agencies that:
- Is created by statute,
- Is designated in the Appropriation Act
with a three-digit agency code,
- Has administrative responsibilities,
- Has staff responsible for program implementation.
- Collegial Body: A state government
body, usually designated as a board, commission or council, that:
- Has power vested equally among colleagues/members,
- Is established by law or executive order,
- Is typically charged with providing
advice to an agency, promulgating public policies or regulations, or
overseeing the operations of an agency.
Entities excluded from the preliminary count
include regional and local bodies such as planning district commissions,
community services boards, and local health departments; nonstate agencies;
administrative agencies associated with interstate compacts; and ad hoc
groups formed by secretaries or agencies for a limited time to address
a specific issue or problem.
The highest number of collegial bodies (79)
is associated with the commerce and trade area. The second highest number
is associated with health and human resources (53), and the third highest
is associated with natural resources (51). As shown in Figure 2, 327 (nearly
93 percent) of the 353 collegial bodies have been created through legislative
Figure 2: Collegial Body
at this time
& Human Resources
Note: information based on
initial review of Secretary of Commonweatlh's Blue Book, May 2002, and
Staff reviewed the general Virginia code
provisions regarding collegial bodies. General statutory provisions require
collegial bodies to follow a standard nomenclature. Collegial bodies are
classified as either advisory, policy, or supervisory depending upon their
level of authority in developing budgets and hiring key personnel. Members
of collegial bodies are reimbursed and compensated at a standard rate.
However, staff informed the subcommittee that specific provisions in the
enabling statute or the Appropriation Act could override these general
Executive Branch Collegial Bodies
Given the extremely broad scope of the mandate,
the subcommittee decided to focus its efforts this year on collegial bodies,
specifically those within the executive branch. Collegial bodies excluded
from the subcommittee’s review this year include those in the legislative
and judicial branches; collegial bodies associated with independent agencies,
political subdivisions or authorities; interstate compacts; and collegial
bodies created in 2002.
Following presentations by staff, the subcommittee
heard from two speakers, the executive director of the former Hopkins
Commission and a former Secretary of the Commonwealth. The Hopkins Commission
was a similar study in the 1970s that examined ways to restructure state
government to promote efficiency and effectiveness. The director shared
several insights on reorganizing and advised the subcommittee to keep
in mind the following principles:
- Match authority with responsibility.
- Create independent agencies only through
the Constitution and make them accountable.
- Use modern business principles to enhance
government operations, but don’t try to transform government into a
- Guard against creating superagencies
that become entrenched and unaccountable.
- Equip agencies with all the tools and
resources to perform their mission and statutory duties.
The former Secretary of the Commonwealth
related some of the difficulties she encountered in coordinating the appointment
process for the Governor. She noted the failure of agencies to forward
information about address changes and resignations of board members to
her office and the inability to obtain information directly from the boards
regarding frequency and duration of meetings, amount of per diems paid
to board members, practices regarding the reimbursement of expenses, and
the existence of any by-laws for specific boards.
She offered several suggestions to improve
- Keep term expiration dates staggered
during the calendar year. Approximately 75 percent of the appointments
expire on June 30.
- Extend all terms to four-years to reduce
- Require functions and activities of
boards to be electronically filed with the Secretary of the Commonwealth.
- Establish an automatic process for the
repeal in the Virginia Code of boards that fail to meet at least once
Research activities of the subcommittee
and staff this year will include surveys in July of all collegial bodies
within the scope of this year’s review; structured interviews with key
collegial body and agency staffs; a review of the Virginia Code; compilation
of legislative history; a functional analysis comparing statutory missions
to actual activities and results; reviews of various documents such as
board meeting minutes; testimony from collegial body representatives,
agency heads, and secretaries; and receipt of comments through public
hearings and other mechanisms. Selected collegial body representatives,
agency heads, and secretaries will be invited to address the subcommittee
beginning in September and continuing through December.
The next meeting is scheduled for September
25, 2002, in Richmond, at which representatives from selected boards and
commissions will respond to questions and provide the subcommittee with
more information about their activities.
The Hon. James K. O'Brien, Jr.
For information, contact:
Division of Legislative Services
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