HD8 - Report on the Feasibility of Vesting an Agency of the Commonwealth with the Responsibility and Necessary Authority to Deal with Local Financial Emergencies

  • Published: 1984
  • Author: Secretary of Administration and Finance
  • Enabling Authority: House Joint Resolution 65 (Regular Session, 1983)

Executive Summary:
In 1973, the U. S. Advisory Commission on Intergovernmental Relations (ACIR) issued a detailed report, "City Financial Emergencies: The Intergovernmental Dimension." In that study, and in subsequent studies, the ACIR recommended that states adopt mechanisms for determining when state intervention was needed and for providing corrective action.

After receiving and considering requests for Commonwealth loans or grants from two local governments that experienced financial emergencies in 1982, the 1983 General Assembly adopted House Joint Resolution Number 65, which requested the Secretary of Administration and Finance "to study the feasibility of vesting an agency of the Commonwealth with the responsibility and necessary authority to deal with financial emergencies arising in Virginia's local units of government." This report is hereby respectfully submitted to the 1984 General Assembly by the Secretary of Administration and Finance in compliance with the joint resolution.

This study is designed to explore why local government financial emergencies occur, the consequences of a local financial emergency, and the appropriate response of the state government to a local financial emergency. After addressing these aspects on a general or 50-state basis, this report will describe recent financial emergencies in Virginia, the Commonwealth's powers to assist local governments in trouble, and how these powers could be strengthened.