SUMMIT I, held in Charlottesville on October 13, 1998, identified problems facing Virginia's localities. (scroll down for a description).

SUMMIT II, held in Charlottesville on June 7,1999 looked at possible solutions to the problems discovered during Summit I and generated a list of recommendations (scroll down for more information).

 On June 3, 1998, we began a two year process of examining the present condition of Virginia's cities and identifying steps we can take to assure their rightful place in Virginia's future.

More than 250 people, including commission members, legislators, city officials, community leaders, county officials, town officials, business leaders and media representatives convened in Charlottesville to help identify the major problems faced by today's Virginia cities.

After opening remarks by Speaker Moss and summit co-chairs Mitch Van Yahres (Charlottesville) and Emmett Hanger, Jr. (Augusta County), William Hudnut, former mayor of Indianapolis, spoke to the assembled group about the importance of cities and the key issues that seem to affect them. His presentation was followed by panels including experts in finance, services and structure. Later, attendees were divided into 25 small groups of up to ten people each, with each group representing the diversity of those in attendance. The groups then discussed three specific questions, with the help of a facilitator/ recorder.

According to John Thomas, Director of the Weldon Cooper Center for Public Service, which organized and staffed the summit for the Commission, "The purpose of the first summit was to identify the most common problems and seek consensus, rather than identify solutions."

During two hours of animated discussion, the 25 groups provided 361 different responses to the three questions. The responses also provided information on the degree of commonality of the identified problems.

Staff members from the Cooper Center have analyzed the information provided from the first summit. According to Thomas "Perhaps the most striking result of the small group discussion was the consistency with which certain issues were mentioned."

For instance, 52 responses identified tax structure as a problem area. This type of aggregation can also serve as an indicator of intensity of interest and the Commission has already responded by endorsing the creation of a new commission specifically to study the Commonwealth's tax structure and service delivery responsibilities.

Introduction

Twenty-five small groups gathered for discussion over lunch as part of the day-long Summit on the Condition and Future of Virginia's Cities held in Charlottesville on October 13, 1998. Led by an appointed facilitator, each group addressed three questions. The groups were organized to reflect the diversity of representation at the Summit: members of the Commission, legislators, city officials, community leaders, county officials, town officials, business leaders, and media representatives.

A recorder for each group summarized the group's response to each question and then reported the results in a plenary session before the Summit concluded. The results presented here include a summary analysis based on a general coding scheme applied to each response. Attached is a listing of verbatim responses for each question, as well as additional details about responses pertaining to the tax system and schools.

General Comments
Perhaps the most striking result of the small group discussions was the consistency with which certain issues were mentioned. Despite the diversity of attendees, there are items which clearly concern Virginia leaders more than others. Secondly, many of the issues were brought up in the context of each of the questions. To some extent, that is a reflection of the importance of certain problems and the wide-ranging impact they have. In addition, it may be a result of misunderstanding about the meaning of the questions among some groups. For instance, some responses to question 1a, which asked about "fiscal" problems, reported "physical" problems. Similarly, in question 2, where the participants were asked about "structural barriers," it is clear that some respondents were thinking about the physical structure of buildings, schools, etc.  

QUESTION 1a:
What do you think are the three most important fiscal problems in your city?
(The purpose here is to identify the problems, not solve them.)
Total responses: 172

Most significant fiscal problems:

This summit is the second of two such meetings that we have held: the first focused on the current condition and needs of Virginia's cities; this summit will focus on proposed solutions.

First year Accomplishments
Last fall, a similar group of public officials, business representatives and other citizens that included many of you came together at the first summit in Charlottesville to develop a list of issues for the Commission to address and to identify those that must be addressed in the first year of this two year project. Participants in that first summit, together with many of those who spoke at public meetings held in Danville, Norfolk, Alexandria, Roanoke and Richmond, asked us to act immediately to address four pressing issues.

First, you asked that we help fiscally stressed localities by seeking additional funds for school construction--building on the historic program begun in the 1998 General Assembly that provided state grants for capital projects for the first time in 50 years. We responded by supporting legislation that guaranteed that nearly $300 million in lottery profits would go to local schools for construction, technology and other local priorities.

Second, you asked that we seek full funding for HB599--making good on a forgotten promise to provide millions in funding for public safety. We responded by resolving in September to ask the Governor to put these funds in his budget which he did.

Third, you urged the Commission to initiate a comprehensive study of the Commonwealth's tax structure--a study that would assure tax equity; a study that would bring the tax structure from an agrarian based system to one that reflects the new economy of the 21st century; a study that would involve ordinary citizens, not politicians in the process; a study that would match revenues and service obligations; and a study that would make recommendations that would not increases the per captia tax burden on working families. We responded by proposing HJR578 which establishes a 13 person citizen commission to conduct such a study.

Finally, you asked that we recommend immediate actions to help localities address the problems of blighted properties in our core cities. We responded by recommending legislation that will give localities enhanced tools and increased funds to address this important urban problem.

This is an impressive list of accomplishments for our first year.

This Year's Agenda

Your job today is to help set the agenda that will guide the Commission's actions between now and the beginning of the 2000 General Assembly.

In your materials for the summit, you will find a summary of the work plan I have established for the Commission to follow this year.

The staff of the Weldon Cooper Center will be working with us to refine the agenda you establish at our meeting in July. Subcommittees will work to develop recommendations to implement this action agenda for consideration at our meeting in September.

Further subcommittee work well result in legislative proposals drafted for consideration at our meeting in November. These proposals will then be presented for final action at our meeting in December.

Some Issues for Consideration
Before you begin your discussion, I want to suggest a few issues that I hope you will consider today.

First, with regard to local governance and legal structures, we need to enhance support for regional cooperation and regional problem-solving.

We need to consider what improvements in the Regional Competitiveness Act will further this objective. We need to ask if there are other incentive programs that will encourage greater regional cooperation. And, we need to eliminate all existing statutory barriers to regional cooperation and regional action.

We also need to ensure that we have done all we can to give local governments the flexibility they need without abandoning necessary state-wide consistency supported by the Dillon Rule.

Second, with repect to services delivery, we need to ask whether revenues and responsibilities are properly matched. Should funding formulas be revised to direct more state revenues to local governments for schools, transportation, public safety, and mental health or should we recommend that some responsibilities for services be reallocated from the local government to state government?

We also need to ask what we need to do to stop subsidizing sprawl through transportation and housing policies and funding formulas that favor new development in outlying suburbs over renovation of existing facilities in our cities.

How can we better encourage multi-jurisdictional land-use planning without saying how it should come out?

How can further encourage reinvestment in declining properties through historic districts, tax incentives and the kinds of programs that have contributed to the success of the City of Charleston about which you will hear more today?

The Job Isn't an Easy One
Noboday said this Commission has an easy job. If it were easy, the job would have been done long ago.

And, there is a temptation, because of pent up concern and reasoned anxiety, to jump the gun and begin to address some issues, like taxes, on a piecemeal basis rather than waiting to look at the picture as a whole.

I am strongly committed to keeping this Commission focused on an integrated approach to these issues that assures that no locality is a loser nor any issue determined by the election politics in a single district.

All of what we accomplished in the first year was accomplished because of strong bipartisan support.

We could not have restored HB599 funding with the Governor's support.

We could not lhave dedicated lottery profits to schools without the support of legislators on both sides of the aisle.

We could not have established the tax study commission without the bi-partisan leadership of Whitt Clement, Charles Hawkins, Jack Rust and Bob McDonnell and the support of local government leaders and the business community.

As we go forward this year, I ask that those of you participating today help keep us on this same unified course.

I think that there is a need for a short-term redistribution of current state tax revenues to help localities meet critical needs pending the outcome of the comprehensive study of the tax code. Let's work together to come up with a sensible proposal to get that done this year.

We all want to reduce the localities' current dependence on the real estate tax, and we want to reduce real estate taxes further, particularly for those living on fixed incomes. But, we also know that real estate taxes support our public school budgets nearly dollar for dollar, and localities must have additional state support if we are to have quality schools and lower real estate taxes.

And, for jurisdictions like Norfolk where I'm from, where 50% of the real property is not on the tax roles because it belongs to the state of federal government, we know that something must be done to assure that the city receives fair compensation for the services it provides to these tax exempt property holders.

Let's be sure that we don't lose sight of any of these objectives as we struggle to find the best way to help all of our cities grow and prosper in the next millennium.

Conclusion
The program we have planned for you today will help move us from simply cataloguing problems to beginning to identify the statutory, policy and regulatory changes that we need to make to address the issues we have identified.

As you listen and participate today, please be as comprehensive as you can be in identifying action that can be taken to address identified structural and service delivery issues, assigning proposed actions a priority, and, where possible, categorizing them as those that can be taken in the short term and those that will take a long term, comprehensive approack or required major structural changes.

Welcome, again, to you all. May you have a productive and enlightening day.

Numbers in ( ) refer to previous listings of potential Commission recommendations

1. Revise the Standards of Quality (SOQ) and adjust the formulas for distributing funds to meet the Standards to assure that localities are receiving from the state funding for 55% of the actual cost of public education and review and revise the Standards and formulas biennially to meet this objective.

2. Adopt legislation requiring the Governor to include in his budget recommendations for FY2002 language and adequate funds to implement the Commissionıs recommendation regarding the SOQs and the funding formulas.

3. Assure sufficient funding for the administration and remedial programs associated with the Standards of Learning. (1c)

4. Create a Housing Enterprise Zone program aimed at revitalizing blighted areas and increasing investment in housing development in areas that are close to work centers. (10b)

5. Increase VDOT funding for public transit programs. Assure that new transportation funding is apportioned so that the public transit allocation applies to these funds. (13b)

6. Increase state funding levels for school construction assistance to local school divisions by making permanent the allocation from lottery proceeds. (4a)

7. Develop a comprehensive state urban policy that clearly articulates how the state will take into account the effect that its policies, programs and new incentives will have on the state's urban areas. (27)

8. Enable localities to create a regional authority to undertake joint economic development projects and share in their costs and revenues. (20)

9. Increase the appropriation for the Virginia Removal or Rehabilitation of Derelict Structures Fund to $10 million per year. (10c)

10. Give a preference to city locations when siting public facilities, and whenever possible lease such facilities. (12)

11. Increase funding for the early intervention reading program and the child care subsidy program. (5a)

12. Create a state grant or long-term, no-interest loan program to enable localities to assemble, plan, clear and remediate downwardly transitioning sites for sale to private corporations for redevelopment. (10a)

13. Restore the appropriation to the Virginia Housing Partnership Fund. (10bi)

14. Increase funding for the Regional Competitiveness Act by $15 million per year and restrict the new funding to newly implemented regional services. (14ci)

15. Raise the cap on tax credits for rehabilitation projects in urban enterprise zones to $250,000. (10d)

16. Provide increased funding for shared services, such as social services, mental health and public health, whenever the cost per capita (based on locality population) of providing the service exceeds by at least 10% the statewide average per capita cost of providing the same service. (9)

17. Revise the distribution formula for VDOT road maintenance funding to better recognize the higher traffic volume in urban areas. (11b)

18. Increase funding for the transportation revenue sharing program by $10 million and restrict the use of the additional amount to regional public transit and other transportation projects. (14cii)

19. Expand an adequately funded pre-school intervention program for children in poverty by increasing coverage from 60% to 100% of eligible children. (5i)

20. Create a new class of city that would permit, in consultation with an adjoining county, the transfer of selected functions to that county without loss of the cityıs identity; and, the city would be able to expand its territorial boundaries in a "town-like" arrangement. (16)

21. Expand an adequately funded pre-school intervention program for children in poverty by making the state share of funding a minimum of 55%. (5ii)

22. Transfer the funding for programs serving "at-risk" children into the SOQ, thereby assuring their continuation. (1ai) 23. Assume 100% of the costs of funding the Comprehensive Services Act. (8a)

24. Adopt a resolution to reconstitute the Commission to receive the report of the Commission on Virginia's State and Local Tax Structure for the 21st Century.

13a. Allow the various regions in Virginia to create regional transportation districts with the authority to levy regional taxes within the district for highway and public transit projects.

14a. Dedicate a portion of the state corporate income tax to the regions of the state, and within regions a disproportionately higher share should go to fiscally stressed localities.

17a. Raise the brackets for the personal income tax from $0 - 3,000 to $0 - 4,000 and from $3,000 - $5,000 to $4,000 - 6,000.

17b. Fund the Work Incentive Program (or Earned Income Tax Credit) from the General Fund.

19. Enable a regional sales tax that would fund only inter-jurisdictional services.

21. Expand eligibility for the Water Quality Improvement Fund.

22. Share state tax revenues with localities, such as personal income tax.

23. Expand options for local revenues, such as a split real estate tax rate, payroll tax, etc.

24. Compensate localities more equitably for revenues lost on state-owned tax-exempt properties.

25. Create local or state tax credits for including transit subsidies as employee benefits.

26. Enact a personal income tax deduction for individuals using public transit.