The General Assembly of Virginia has in recent years been confronted with demands for public services which have increased faster than available revenues. This situation has been common to all legislative bodies throughout the country. A report was made to the General Assembly of 1964, proposing certain changes in the State tax structure and State and local fiscal practices. The General Assembly of 1964 adopted a number of the changes proposed; it also provided for a continued investigation of State and local relationships as reflected in the grant-in-aid programs in order to determine a future course of action.

The Virginia Advisory Legislative Council was deeply conscious of the nature and complexity of this study and appointed an able Committee to make a preliminary investigation and report upon this subject. John Warren Cooke, member of the Council and member of the Finance Committee of the House of Delegates, Mathews, was appointed Chairman of this Committee. The other members of the Committee chosen to serve with Mr. Cooke were: Dr. J. D. Hagood, member of the Council and Chairman of the Finance Committee of the Senate, Clover; Lewis A. McMurran, Jr., member of the Council and Chairman of the Committee on Counties, Cities and Towns, of the House of Delegates, Newport News; Dr. George Jennings, Professor of Economics, University of Richmond; J. Clifford Hutt, Attorney at Law, and member of the Board of Supervisors of Westmoreland County, and former President, League of Virginia Counties, Montross; James T. Mathews, Retailer and former President, the Virginia State Chamber of Commerce, Richmond; Waldo G. Miles, Attorney at Law, and member of the State Board of Education, Bristol; C. H. Morrissett, State Tax Commissioner, Richmond; John W. Roberts, Manufacturer, Richmond; William L. Winston, present member of the Finance Committee of the House of Delegates, Arlington; and Mrs. Eleanor P. Sheppard, member of the City Council, Richmond.

The nature of the study made it apparent that a person with long familiarity with the fields of State and local relationships, the operations of various State programs, a background in the field under study and the ability to collect, synthesize and present in meaningful form large amounts of data, was needed. The Committee was most fortunate in obtaining the services, as Consultant, of Dr. Lorin A. Thompson, Director of the Bureau of Population and Economic Research of the University of Virginia.

The Committee organized and elected Dr. J. D. Hagood as Vice-Chairman. John B. Boatwright, Jr. and Wildman S. Kincheloe, Jr. served as Secretary and Recording Secretary, respectively, to the Committee.

A vast amount of material has been compiled and studied. A public hearing was held after wide publicity and this was well attended; much valuable information was obtained from this source. In addition, many communications were received from interested individuals and groups and these suggestions were given due consideration.

Shortly after the Committee began its work, a number of local governments began to adopt local sales taxes and the operations and effects of these local taxes have been carefully studied. Much of the first twelve months was spent in reviewing the results of previous studies and discussing the pros and cons of various proposals that were made to the Committee. Shortly after June 30, 1965, the results of the State's, fiscal operations in the first year of the present biennium became available to the Committee. A considerable surplus was indicated. At about the same time, the budget requests of the various State institutions and agencies both for maintenance funds and for capital outlay were compiled and made available to us.

Throughout its study, the Committee has been guided by the consciousness of the following factors: the need for maintaining a healthy relationship between the State and its local governments; the requirements of local governments for funds to provide the services required by their citizens and which, if supplied locally, will be rendered more efficiently and economically; the need for the State to ensure that certain programs are maintained at a satisfactory level in all areas of the State, despite the inability of some areas to assist in financing them; and the increasing financial burdens which will come to be borne by the State in those areas which supported solely by the State government.