Gov. Glenn Youngkin will propose amendments to Virginia’s biennial budget later this year ahead of the 2025 legislative session. All state agencies have until August 26 to submit their requests to the Department of Planning and Budget for capital projects they would like included in the governor’s proposal.
The process will look a little different this year as agencies will be required to close inactive projects and hold agencies accountable if they have a backlog of projects.
DPB advises the governor on how to “wisely use public resources for the benefit of all Virginians by analyzing, developing, and implementing various fiscal, programmatic, and regulatory policies,” their website states.
Before DPB can advise the governor’s office, state agencies must submit their requests for the projects they want funded.
DPB prioritizes certain projects that will be included in the general fund-related proposals they will make.
“In light of the large number of projects authorized in recent years and the number of older projects that still remain active,” DPB wrote in a July memo that the following types of projects will receive prioritization:
- Projects mandated by the state or federal government, court orders, or that address unavoidable changes in caseloads for current services.
- Projects that address known/identified emergency needs that present an immediate life, health, safety, regulatory, or environmental concern.
- Projects that directly support one of the governor’s priorities.
- Projects for which preplanning, schematic design, detailed planning, or working drawings were previously authorized by the governor and General Assembly and the authorized planning phase is expected to be completed and reviewed by the Division of Engineering and Buildings (DEB) of the Department of General Services (DGS) by October 2024.
- Projects taking advantage of limited, one-time economic opportunities that will not exist if delayed.
- Equipment funding for previously approved projects expected to be completed by January 2028.
- Funding to address a significant maintenance reserve-type issue at an existing facility.
- Supplemental funding or scope changes needed for projects previously authorized by the governor and the General Assembly to progress.
Beginning this year, agencies must submit information on all projects active in the Chart of Accounts using a template provided by their DPB Budget Analysts.
“For the FY 2024 capital review process, agencies are required to classify the status of all capital projects in a template,” DPB said in a year-end closing memo sent to state agencies in May. “Reporting on all projects at year-end, like was required years ago, is intended to help better facilitate the ongoing effort to analyze and close inactive projects, which was communicated last year.”
Projects that received a final certificate of occupancy before May 1, 2023, or that have not had expenditures within the last three fiscal years must be submitted for closure through the capital project review process according to the year-end close instructions memo.
“Removing inactive projects from the list of active projects will allow decision makers to better judge the ability of an agency to handle additional capital projects,” DPB wrote in the year-end close memo. “An agency with a large number of active projects gives the perception of being unable to manage all of its existing projects, arguing against the approval of any new projects.”
Agencies with a backlog of projects will have to explain why they are asking for funding for new projects.
“Agencies still showing a number of active capital projects after the capital year-end close exercise will need to explain why new capital requests should be considered when they are still trying to address an existing backlog of projects,” DPB wrote in the July memo.
DPB will also examine how agencies have managed maintenance reserve funding when considering granting additional funding.
“In addition to the capital year-end close exercise, there will be an exercise this fall to better understand how well agencies are able to fully utilize their maintenance reserve funding,” DPB wrote. “Although specifics on this exercise will be forthcoming, the amount of uncommitted maintenance reserve funding at an agency will be taken into account for agencies requesting additional capital funding for large maintenance-type projects.”
While DPB helps the governor with his proposal, the General Assembly must approve every aspect of the budget before the governor can sign it.
The Democratic-held General Assembly will likely make changes to the governor’s proposals, which could result in another standoff between him and the lawmakers — as it did the last two years.
More info on the DPB process:
- Many projects approved for funding from general fund-related sources will be placed in a funding pool.
- Other projects, primarily those funded from non-general funds, institutional debt/9(d) bonds, or non-general fund-related state debt/9(c) bonds and umbrella projects, will be set out as stand-alone projects in the budget bill and resulting Appropriation Act.
- All projects authorized for planning-only for which general fund-related sources of funding (including tax-supported debt) will be requested for construction are subject to the pool process. This applies regardless of whether the project is authorized in a planning pool or is set out separately in an Appropriation Act as a stand-alone project, and regardless of the source of funding used for planning.
