eNews – January 31, 2025
Webinar with Sen. Mark Warner on Tuesday, Budget Sunday approaches, Legislation updates...and more!
Friday, January 31, 2025/Categories: eNews
This edition of eNews is sponsored by MITRE Corporation working in the public interest across various domains to provide technical expertise and guidance to the U.S. government, as well as states, municipalities, and international partners. Learn more >.
In this issue:
VML News
Finance & Budget
Transportation
Natural Resources
Education
Artificial Intelligence
Elections
VML News
2205 Local Government Legislative Day a success!
Request to send federal funding concerns to Senator Tim Kaine’s office
Yesterday (Jan. 30), more than 200 elected officials and staff from VML member localities gathered at the Richmond Downtown Hilton for 2025 Local Government Legislative Day. The event kicked off at noon with remarks by VML President and Town of Ashland Mayor Steve Trivett. VML Board Member and Town of Amherst Mayor Dwayne Tuggle spoke in his capacity as President of the Virginia Association of Planning District Commissions on the working relationship between PDCs and VML. Attendees also heard from Chloe Rote, Associate Director of Affordable Housing with the Virginia Department of Housing and Community Development.
VML policy staff then walked attendees through the Legislative Day Bulletin which outlines the legislation and budget items important to local governments being considered by the General Assembly this session. After the briefing members visited the General Assembly to meet with their delegations and voice the concerns of their communities.
Just after 5:00 p.m. attendees were joined virtually by Senator Tim Kaine who spoke of the week’s events including the terrible air tragedy at DCA and the recent spate of presidential executive orders that have created confusion and uncertainty around federal funding. Members were given an opportunity to ask Senator Kaine questions.
As a follow up, Senator Kaine’s office has asked VML members to let them know their concerns related to federal funds or any issues they are experiencing because of the recent developments. Given how fast the situation is moving, the more they hear the better. Members can send comments to VML Executive Director Michelle Gowdy at the email address below.
During the reception that followed Senator Kaine’s remarks, attendees were joined by several state elected officials as well as Lt. Governor Winsome Earle-Sears.
Thanks to everyone who came to Richmond and made 2025 Local Government Legislative Day a success!
VML Contact: Michelle Gowdy, mgowdy@vml.org
“Navigating Policy Uncertainty around Federal Funding” – webinar with Senator Mark Warner on Tuesday, Feb. 4 at 11:00 a.m.
VML and the Virginia Association of Counties are pleased to share an opportunity for local officials and their respective staff to hear directly from Senator Mark Warner about the executive orders currently in effect and how he expects them to impact communities.
Join us for this online event next Tuesday, February 4 from 11:00 a.m. – Noon.
Register here >.
View/Download a flyer for this event here >.
Note: Registration is required ahead of the event. After registering, you will receive the link to the webinar.
VML Contact: Rob Bullington, rbullington@vml.org
Free in-person event: Municipal Autonomous Vehicle Forum happening Friday, March 14
VML Community Business Member MITRE Corporation welcomes all VML members to participate in this municipally-focused laboratory tour of MITRE ‘s extensive transportation and AI facilities, followed by a deep dive discussion into the future of municipal autonomous vehicle policies and planning.
This event will be held at MITRE’s headquarters at 7515 Colshire Drive, Mclean, VA 22012.
Register here >.
Note: There is no cost to attend, but registration is required.
What to expect:
Several of the nation’s leading experts on autonomous vehicles and infrastructure will participate in a panel discussion and roundtable with VML members. The discussion will include lessons learned, an exploration of the Commonwealth’s ongoing work with MITRE, and discussion of ongoing and future work with local governments and states around the country, including an upcoming Autonomy Blueprint for a VML member city.
About MITRE:
MITRE is the nation’s leading not-for-profit operator of Federally Funded Research Centers. Chartered by Congress in 1958, MITRE works in the public interest across various domains, including transportation, environment, cybersecurity, healthcare, and more, providing technical expertise and guidance to the U.S. government, as well as states and municipalities and international partners. In 2025, VML and MITRE are embarking on a research partnership to bring customized and specific technical expertise to VML members.
Contact: Jon Desenberg, State and Local Director, MITRE Labs, JDesenberg@mitre.org
Finance & Budget
House and Senate money committees roll out their budgets this Sunday!
Yesterday marked the halfway point of the 2025 Session of the General Assembly. A lot has transpired over the past three and a half weeks and the action continues Sunday. That’s when conversations on the budget enter a new phase as the House Appropriations (HAC) and Senate Finance and Appropriations (SFAC) Committees unveil their amendments to Governor Youngkin’s proposed budget.
The HAC will announce their proposed changes to the budget at 1:30 pm on Sunday, and the SFAC’s timetable is yet to be determined but likely after the HAC meets. On Sunday, each of the respective chairs will describe their subcommittee’s proposed changes to the Governor’s budget. The Subcommittee Reports will include a short narrative document highlighting the budget amendments and a spreadsheet itemizing budget changes. Some of the actual amendments may be included in the Subcommittee Report, depending upon the amount of time that staff has had to translate decisions into budget amendments.
While the reports will be helpful, it’s important to remember that we won’t know exactly what the HAC and SFAC intend until we see the specific language of the budget amendments on Tuesday, February 4. As we noted when the Governor rolled out his budget proposals last month, the House and Senate reports will highlight the glamorous aspects of their budgets but not necessarily the remnants of the Governor’s initiatives that were gored in the process. Until February 4, we will have an incomplete picture.
Typically, the amendments are posted around noon on Tuesday and can be found at this link once they are made available. They will be categorized as Committee Approved under the Budget Amendments tab once they are publicly released.
Later in the week, after VML staff have had an opportunity to review in detail the House and Senate budgets, we’ll provide an update on budget amendments of importance to local governments.
VML Contact: Joe Flores, jflores@vml.org
The fate of many bills comes into focus as deadlines loom
This week was consequential for many bills, as lawmakers raced to meet internal deadlines to get bills out of the house of origin by midnight next Tuesday. Any bills that fail to make it out of the chamber by that point are dead for the year.
Two bills related to finances that we’ve been monitoring closely made it out of House Finance earlier this week and are headed to the House floor.
HB1743 (Watts) expands the existing BPOL licensing tax deduction for businesses operating in other states. That change is likely to decrease BPOL tax revenues but exactly how much remains unknown.
Under current law, any receipts attributable to business conducted in another state or foreign country in which the taxpayer is liable for an income or other tax based upon income are deductible from gross receipts or gross purchases for license tax purposes.
The bill expands the definition of “income or other tax based upon income” to mean “net income tax, as defined in 15 U.S.C. § 383, or any other tax the measure of which is based in whole or in part on gross or net income, or receipts.”
The bill requires the Department of Taxation to convene a work group that includes VML, VACo, and the Commissioners of Revenue as well as the Chamber of Commerce and other key business representatives to review:
- the current policy and methodology of the deduction set forth in subdivision B 2 of § 58.1-3732 of the Code of Virginia, as amended by this act;
- any concerns regarding the existing laws governing such deduction;
- any potential impact of the amendments set forth in the first enactment of this act, including potential revenue impacts to localities, potential administrative complexities, and potential complexities to taxpayers; and
- any impact to such deduction from other existing provisions of law.
Because of the unknown impact of the proposed changes on local governments, a reenactment clause was initially offered, meaning the bill’s provisions would only be implemented if the legislation was passed in its identical form during the 2026 Session. Unfortunately, the reenactment clause was subsequently replaced with a delayed effective date of July 1, 2026. It’s a subtle but important difference.
Further, the convening of a work group by the Tax Department to explore concerns about the current program and the potential impact on local governments pursuant to these changes, begs the question why this legislation should proceed until additional information is gathered about its consequences.
Absent the inclusion of a reenactment clause, VML cannot support this legislation.
Another bill, HB2245 (Callsen) would change current law by requiring that assessments for affordable housing be based on the income approach if the property is generating income. The income approach would only be required if adequate information was provided by the property owner to the local assessor to conduct the assessment.
Concerns remain that using the income approach to assess affordable housing, to the exclusion of other assessment methods, is inconsistent with national assessment standards. Despite requests to address this issue, the patron and affordable housing advocates were unwilling to concede.
While the patron of the bill did not address all our concerns, she did make some accommodations. Accordingly, VML will not oppose the bill as it moves forward. The House-only bill is on its way to the floor.
VML Contact: Joe Flores, jflores@vml.org
Transportation
HB2041 that would redirect photo speed enforcement revenues from localities to the state passes committee (but with assurances that it will be amended for the better)
Yesterday, Del. Seibold’s HB2041 advanced from House Transportation by a narrow 11-9 margin along party lines. HB2041 as advanced to the floor continues to divert civil penalties collected to a state fund. However, Del. Seibold committed to House Transportation Chair Delaney to amend the bill to allow localities to use civil penalties collected to cover the costs of local operation of a photo speed enforcement program and for localities to use civil penalties collected for local safety improvements.
As of today, VML has not seen language to resolve VML’s primary concern that HB2041 diverts locally collected civil penalties to the state. It is unclear if this bill will be amended on the House floor or in the Senate should it be acted upon favorably by the House.
VML remains committed to working to ensure localities retain the necessary local authority to continue to operate a photo speed enforcement program and make roadway improvements to create a safer community. Until this key concern is addressed, VML remains opposed to HB2041.
Thank you to the VML members who have reached out to their delegation to oppose this bill in its current form.
It’s also worth noting that yesterday HB2041 was amended in concept to include key elements of HB1664 (Jones) that would expand local authority in towns that do not have a police department to operate a photo speed enforcement program.
VML Contact: Mitchell Smiley, msmiley@vml.org
Natural Resources
Inter-basin water transfer bill that would have created problems for localities dies in committee thanks to opposition from VML members
Yesterday SB923 (Stuart) was heard in the Senate Finance and Appropriations Subcommittee on Resources where it was unanimously passed by indefinitely. Based on the discussion from subcommittee members it was clear that the messages of opposition from VML members and water resources experts reached subcommittee members.
This bill would have had a significantly negative impact on drinking water in localities and wastewater capital investments across the Commonwealth. Without the help of our members this positive outcome would not have been possible. Thank you!
VML Contact: Mitchell Smiley, msmiley@vml.org
Education
Bill mandating election of school boards fails to report from committee
SB1404 (Pekarsky) mandated that all school boards be elected. Current law requires all school boards to be appointed, but they may become elected if approved by referendum. This bill would have affected 12 localities.
SB1404 failed to report 6-7-2 in the Senate Education and Health Committee.
VML Contact: Josette Bulova, jbulova@vml.org
Artificial Intelligence
Legislation establishing requirements for high-risk artificial intelligence systems passes committee with enactment delayed until 2027
SB1214 (Aird) would create requirements for the development, deployment, and use of high-risk artificial intelligence systems, as defined in the bill, by state public bodies, The bill would direct the Chief Information Officer (CIO) to develop, publish, and maintain policies and procedures concerning the development, procurement, implementation, utilization, and ongoing assessment of systems. This bill does not include counties, cities, or towns but does include a work group to determine the feasibility of extending this requirement to local governing bodies. This bill comes as a recommendation from the Joint Technology and Science (JCOTS) committee this summer.
SB1214 passed Senate Finance and Appropriations 14-0 with an amendment to delay the enactment until 2027.
VML Contact: Josette Bulova, jbulova@vml.org
Elections
Bill increasing prohibited area around election activities passes clears committee – Comments requested
As amended, HB1938 (Reid) would increase the prohibited area around polling places, electoral board meetings, and recount locations from 40 feet to 100 feet.
HB1938 passed the House Privileges and Elections Committee 11-10 as amended.
NOTE: VML does not have a formal position on this legislation, however, we are interested to know members' opinions of the feasibility of this legislation. Please send comments to Josette Bulova at the email address given below.
VML Contact: Josette Bulova, jbulova@vml.org