Henrico County VA

County to legislature: ‘Don’t hurt us’

"Don't hurt us."

That's the clear and simple message being delivered by Henrico County's elected officials, administrators and lobbyists to the General Assembly, which convened in Richmond for a 60-day session last week.

The missive represents a change from years past, during which county officials annually presented "wish lists" of top priorities to the county's General Assembly delegation. Six years ago, that list contained 14 items. This year, it's down to just one: Do no harm.

By placing their sole focus on those three words, local officials hope to make a salient point to lawmakers: localities – Henrico included – are struggling to deal with their own financial problems and cannot afford additional funding cuts from the state.

County lobbyists have, for the most part, kept their mouths shut in recent years as state funding to localities have declined annually. Though other jurisdictions in the state had to lay off employees, raise tax rates or trim services – or all three – Henrico has not.

County officials are adamant that no layoffs, service cuts or tax increases will occur in the coming fiscal year either, but by sounding the warning bell to legislators, they hope to illustrate how dire times have gotten statewide.

During the past several years, as state funding to localities fell during the recession, Henrico was able to make up those lost funds in its annual budgets thanks to years of conservative financial planning, Deputy County Manager and Finance Director John Vithoulkas said. (The county annually has capped its growth at 5 percent – during strong and lean economic years – which helped buffer it from the recession.)

But now, the state's failure to meet its funding obligations is having a real impact even on Henrico, which begins its 2012-13 budget process facing a $70.8 million budget shortfall before the process even begins. That's a significant hurdle even for one of the most fiscally sound counties in the nation (Henrico was the first county to have its triple AAA bond rating reaffirmed last summer after the U.S. government's rating was downgraded by Standard and Poor's.)

The shortfall is the result of a combination of factors:

• an estimated $10.8-million decline in tax revenues;

• a projected increase of $32.5 million in the county's required payments to the Virginia Retirement System;

• $6.1 million in additional debt service payments;

• $10.2 million in operating costs for new projects constructed through bond sales;

• $4.2 million in additional healthcare costs;

• $1.5 million in additional diesel fuel for school buses and vehicles;

• $5.5 million in other costs.

"In the Fiscal Year '13 budget, the VRS cost increase is the single largest budget driver that we have, both for general government and for schools," Vithoulkas said.

The VRS provides retirement payments for eligible state employees and teachers and is funded by the state and localities, all of whom make payments into one fund, from which it is then distributed.

But while localities – including Henrico – have been required annually to fully fund the VRS rates established by the VRS Board, the state has not fully funded its share in any of the past four-plus years.

For example, in Fiscal Year 10-11, the VRS board set the rate of payment into the system for teachers at 12.91 percent; Henrico and other localities paid that percentage in full, but the state paid only 3.93 percent – less than one-third of the amount it owed.

Part of the problem was that the VRS investment fund took a significant hit during the recession, losing 28 percent of its value between 2007 and 2009. The fund rebounded to gain 20 percent last year; Virginia Gov. Bob McDonnell's budget assumes that the fund will show 8-percent growth in the coming fiscal year.

McDonnell has proposed funding the VRS with $2.21 billion in new money in the coming fiscal year – including $876 million in state general fund dollars – as a way to begin addressing what he termed the "woefully underfunded" system. McDonnell also is proposing that public employees pay 1 percent of their salaries toward the fund, which would raise another $5.1 billion.

Critics of his proposals argue that the bulk of that new money will come from the very localities who have been paying their shares all along and from employees, for whom the money is intended.

A number of bills related to VRS funding are under consideration in the Assembly, but each would require concessions in other areas to fund VRS.

"There are only so many resources," said Henrico's legislative liaison Mike Schnurmann. "If you squeeze in over here, it's going to pop out somewhere."

Positives and negatives
The county has seen some key economic indicators pointing in a positive direction during the past year:

• residential foreclosures in 2011, through October, were lower than during the same months in 2010 with just two exceptions (May, which witnessed one more and October, which was equal to the previous year);

• the county's unemployment rate dropped from 7.5 percent in February 2010 to 5.9 percent in April 2011, before rising slightly to 6.5 percent in September – a figure that still was 0.8 percent lower than the same rate for Metro Richmond;

• the county's sales tax receipts were up $2.5 million from Fiscal Year 2009-10 to FY 2010-11 (to $57.2 million) and up 2.9 percent during the first quarter of FY 11-12.

But, there are negatives too.

County officials are estimating that Henrico's taxable real estate base will drop from $31.7 billion last year to $30.05 billion this year – a decrease of 5.19 percent. Since 2009, the taxable base has dropped by $4.7 billion (or 13.5 percent).

Other local sources of revenue – chiefly personal and business property taxes – are projected to remain flat in the coming fiscal year.

Also during this year's Assembly session, legislators will consider a number of proposals to restructure the way road maintenance is handled throughout the state. Henrico – one of just two localities that already maintain their own secondary road systems with money provided by the state – will watch the issue carefully, said Schnurmann.

Henrico – which for years lobbied to have its road maintenance allocation rate increased to bring it more in line with that of Arlington County – may now be content to live with its current rate, given that all but one of the new proposals likely would reduce that rate even further, according to Schnurmann.

County officials don't expect any of the proposals to pass the General Assembly this year, but they caution that anything is possible.

More cyclists on the way

Riders to pass through county on East Coast Greenway tour
From October 4-9, 35 cyclists will be riding through Henrico County as part of a 325-mile tour of the East Coast Greenway (ECG) route from Fredericksburg, Virginia, to Raleigh, NC.

A 2,900-mile trail route that extends from the Canadian border at Calais, Maine, to Key West, Florida, The East Coast Greenway is heading into its 25th year. The Week A Year (WAY) Tour is an annual ride and fundraiser that has been working its way south since the first WAY Tour launched from Calais, Maine in 2011. Riders cover a different section of the Greenway each year and are on target to complete the route in Key West in 2019. > Read more.

Henrico woman wins $1M in Va. Lottery game

When Amanda Spiller of Henrico saw that she’d won the $1 million prize in the Virginia Lottery’s $100 Million Cash Extravaganza game, it didn’t immediately sink in.

“I was in shock. . . complete shock,” she said. “I had to double and triple check.”

She bought the winning ticket at the 7-Eleven at 2750 Hungary Spring Road in Henrico. She had the choice of taking the full $1 million prize over 30 years or a one-time cash option of $681,000 before taxes. She chose the cash option. The store received a $10,000 bonus from the Lottery for selling the winning ticket. > Read more.

The Volunteers of the United States Army Field Band to perform Oct. 15

Henrico County Recreation and Parks is hosting a concert by The Volunteers of the United States Army Field Band on Thursday, Oct. 15 at Henrico Theatre, 305 East Nine Mile Road in Highland Springs. This free concert will be held at 7 p.m. and will feature Soldier-Musicians from the U.S. Army Field Band.

Since its inception in 1981, The Volunteers has been telling the Army story through rock, pop, country, and patriotic music. Its members have performed for millions of listeners in all 50 states, Puerto Rico, Canada, Mexico, Kuwait, and Iraq. This group tours more than 100 days each year, bringing a powerful message of patriotism and support to communities large and small. > Read more.


Reader Survey | Advertising | Email updates


ATTENTION DIABETICS with Medicare. Get a FREE talking meter and diabetic testing supplies at NO COST, plus FREE home delivery! Best of all, this meter eliminates painful finger pricking! Call… Full text

Place an Ad | More Classifieds


Virginia Center Commons will host a seasonal community job fair from 11 a.m. to 2 p.m. inside JCPenney Court. Local businesses and retailers looking to fortify their sales force for… Full text

Your weather just got better.


Henrico's Top Teachers

The Plate