House committee advances 'fiscal-distress' legislation; Senate expected to support it, too

RICHMOND – A House committee has reversed course on legislation calling for state assistance to its localities teetering on the brink of bankruptcy.

Instead of tabling it as one of its subcommittees had suggested, the House Counties, Cities & Towns Committee voted 18-2 Friday morning to push through a bill that would allow the state to temporarily take over the financial affairs of a locality it declares “fiscally distressed.” It says that any locality which has been unable or unwilling to submit required annual reports of its books to the Virginia Auditor of Public Accounts over several years could be deemed in fiscal peril. Once that label is applied, the locality would be subject to immediate intervention, opening the door for the nonpartisan Virginia Commission on Local Government to appoint an outside emergency fiscal manager to take oversight of the financial affairs.

The bill’s crosshairs squared on Hopewell, which had not submitted the audits since 2015 and last year rebuffed the Youngkin administration’s attempts to step in.

The legislation, from Del. Carrie Coyner, R-Chesterfield County, mirrors a Senate version passed out of committee earlier in the week. Its only difference is that Coyner’s bill specifies a locality’s treasurer.

That bill was originally recommended by a subcommittee to be tabled due to concerns about overreach, and the request to vote on its passage was questioned by Del. Laura Jane Cohen, D-Fairfax County.

“I know it’s been a long session, it feels like dog years at this point,” Cohen said. “But I wondered, this was the bill where we were discussing Hopewell, and can someone remind me what happened in [subcommittee]? I thought we either laid this on the table or continued to 2025.”

Mundon King acknowledged the bill was tabled in subcommittee. “However, we received additional information and would like to reconsider it,” she told Cohen.

That “additional information” was to narrow the temporary takeover of constitutional officers’ money decisions to the treasurer. Coyner briefly addressed the changes in her committee testimony.

Cohen and Del. Mike Jones, D-Richmond, cast the only dissenting votes to recommend its passage.

Sen. Lashrecse Aird’s version of the fiscal distress bill is scheduled for “second reading” on the Senate floor Friday afternoon. The Petersburg Democrat said in a text to The Progress-Index Friday morning that she was going to ask that her bill be amended to also include the treasurer provision.

A final vote on the Senate version is expected Monday.

The legislation has created division among Hopewell City Council. Five of its seven members wrote to the legislature asking that it be killed because it was giving the state too much overreach to rummage through Hopewell’s pocketbook. Two members, including the city’s mayor, supported the legislation.

The council majority’s concern was also shared by the Virginia Municipal League, the Virginia First Cities Coalition and the Virginia Treasurers’ Association.

Bill Atkinson (he/him/his) is an award-winning journalist who covers breaking news, government and politics. Reach him at batkinson@progress-index.com or on X (formerly known as Twitter) at @BAtkinson_PI.

This article originally appeared on The Progress-Index: Fiscal-distress legislation sent to House floor by committee