HD40 - Interim Report of the Joint Legislative Audit and Review Commission on Local Mandates and Financial Resources
Executive Summary: Through House Joint Resolution 105, the 1982 session of the General Assembly directed the Joint Legislative Audit and Review Commission (JLARC) to study and report to the General Assembly on the: • responsibilities of local governments for providing public services, and the differences in the responsibilities of counties, cities, and towns; • sources of revenue that are or could be allocated to local governments and the adequacy of those sources; and • the Commonwealth’s responsibilities for providing public services and procedures for aiding local governments. The resolution designated a 12-member legislative subcommittee to cooperate with JLARC during the study. Members were appointed from the House Committees on Finance and Counties, Cities, and Towns, and from the Senate Committees on Finance and Local Government. The resolution requested that an interim report be presented to the 1983 session. This interim report provides background information on local governments in Virginia, focuses on the principal issues to be considered in the study, and highlights ongoing study activities. A major portion of the interim report phase of the HJR 105 study has been devoted to obtaining input from local government officials and other interested organizations concerning issues and problems which warrant review. The HJR 105 Committee scheduled five regional workshops around the State to encourage local involvement. A sixth workshop was held specifically for town officials, and a statewide public hearing was held in Richmond. A total of 37 counties, 26 cities, and 39 towns sent representatives to one or more of these meetings. The issues which will be the focus of this study flow from these meetings. One of the concerns voiced most frequently during the workshops and hearing dealt with the burdensome nature of State mandates. Mandates are constitutional, statutory, or administrative actions which place requirements on local governments. During the public meeting, several local government representatives acknowledged that most State mandates are desirable. Most speakers contended, however, that mandates limit local flexibility and often impose cumbersome requirements on local governments. This study will examine the mandates that the State has placed on its local governments. The final report will examine the extent to which State-mandated services dominate local activities, and whether State mandates allow localities sufficient flexibility in their implementation. The report will also catalogue mandates seen by localities as particularly constraining. A second concern voiced by local officials is the adequacy of State assistance to localities. Over time the Commonwealth has assumed a significant role in assisting localities with services. The State Comptroller estimated that in FY 1981 almost $2.6 billion in State funds was spent to aid local governments. This study will examine whether the State adequately funds its service mandates. The study will also attempt to examine whether the methods of distributing State aid are based on fair or reasonable measures and whether the processes used in developing formulas have been reasonable. The third central issue for the HJR 105 study is whether local governments have sufficient financial resources to fund the public services they must provide. In recent years, increasing service costs and stagnant revenue growth have led to fi seal stress for many localities. The HJR 105 study will examine local financial conditions and will attempt to compare the revenue-producing capacities and tax efforts of localities with similar features. Evidence of low revenue capacity or high tax effort may indicate that a locality is having difficulty maintaining existing services, and that additional taxing authority or State financial assistance may be warranted. In adopting HJR 105, the General Assembly has begun a reexamination of some aspects of State-local relations. Findings and recommendations which result from study research will be included in the final study report, which will be completed prior to the 1984 session of the General Assembly. Ray D. Pethtel Director |
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