State Budget Impacts on FY2015 Council Approved Budget Hampton City Council July 9, 2014 FY15 Budget

Slide 2 Background State FY15-16 Biennial Budget delayed by dispute over expanding Medicaid May 14, 2014 – Hampton FY15 Budget Approved May 19, 2014 – State releases updated revenue estimates indicating $1.55 billion shortfall for FY June 12, 2014 – General Assembly passed budget June 21, 2014 – Governor signs budget bill Includes several line item vetoes June 23, 2014 – Veto Session concludes State budget did not include Medicaid expansion

Slide 3 Background Approved state budget based on February revenue estimates Allow access of the Rainy Day Fund FY shortfall estimated at $1.55 billion Created revenue reserve of $842 million from a series of spending cuts Remaining $707 million in reduced revenues are expected to be covered by the state’s Rainy Day Fund

Slide 4 General State Budget Impacts Most new spending above the FY 2014 base originally proposed has been removed except for: K-12 SOQ rebenchmarking Medicaid utilization Mental health services spending Repayment of VRS FY short funding Fully-fund the phase-in to VRS board approved rates Debt service payments Rainy Day Fund deposit Direct impact of cuts on local governments

Slide 5 General State Budget Impacts Major general fund spending reductions from the introduced bill included: Higher education ($167 million) Public education ($104 million) Health and human services ($112 million) Commerce and trade ($39 million) Public safety ($27 million) Compensation/other ($168 million)

Slide 6 Hampton FY15 State Funding Impacts State FundingImpact Schools$101,259,471*($456,021) State Aid to Local Police Departments (HB599) $6,523,451($269,366) Public Library Books$163,401($1,799) Healthy Families-Federal/State$478,712$78,712 Sheriff’s Office$6,373,604$46,869 Commonwealth’s Attorney$1,347,367$45,975 Virginia Juvenile Community Crime Act$315,703$35,978 City Treasurer$266,421$9,775 Clerk of the Circuit Court$766,870$4,327 Commissioner of the Revenue$287,269$2,581 * Includes State Funds and State Lottery Profits.

Slide 7 FY15 State Budget Impacts ~ Schools ~ Net revenue loss of $456,021 K-3 class size accounts for $384,365 VRS/Group Life accounts for $85,464 Savings of $255,597 on expenditure side for change in VRS/Group Life rates Recommended increase in revenue budget of $250,000 (miscellaneous and indirect cost) Net addition of $49K added to Contingency

Slide 8 FY15 State Budget Impacts ~ City ~ Net revenue loss of $46,948 Will manage the revenue loss by controlling FY2015 expenses

Slide 9 Other Items of Interest Fort Monroe Authority PILOT cap not lifted Langley Clear Zone – No direct funding Governor restored funding to the FACT Fund which could be a potential funding source Language preventing treasurers from collections activities for the Commonwealth Attorney Current collection activities may be conducted until Jan. 1, 2016 Will work to remove language during 2015 General Assembly Virginia Air and Space Center STEM education funding remains

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