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Steve Hunt states that the doubling the Virginia budget between 1998-2007 was excessive. He also states that increasing inflation-adjusted school spending four times faster than enrollment and college budgets three times faster than enrollment were excessive. The other two candidates have also been invited to answer the questionnaire.
Primary details: Dec 1, 2009 6:00 pm - 10:00 pm at Centreville High School 6001 Union Mill Rd Clifton, VA 20124-1131
Jim Hyland, Republican candidate in the 35th district, was attacked by his opponent for an answer to a question about school spending increasing four times faster than enrollment. This however was a question that Mr. Hyland's opponent had not answered.
With the Republican victory in the race for Virginia governor, Senators Warner and Webb are believed to be wavering in their support for President Obama's massive increase in government health care spending. Please communicate your opposition to Virginia's senators soon. The Senate vote may be in a few weeks.
FCTA letter to the Honorable Mark R. Warner
United States Senate
459A Russell Senate Office Building
Washington, D.C. 20510
Phone: 202-224-2023
FAX: 202-224-6295
Email Senator WarnerFCTA letter to the Honorable James H. Webb, Jr.
United States Senate
144 Russell Senate Office Building
Washington, D.C. 20510
Phone: 202-224-4024
FAX: 202-228-6363
Email Senator Webb
Virginia needs $5 billion more per year for transportation. But when Virginia revenues increased by $17.4 billion between 1998 and 2007, only $2.5 billion of the increase was spent on transportation. Where did the rest go?
Forty years' experience with Medicare and Medicaid contradict claims that more government health care will reduce the deficit.
Jim Hyland, Republican candidate in the 35th district, was attacked by his opponent for an answer to a question about school spending increasing four times faster than enrollment. This however was a question that Mr. Hyland's opponent had not answered.
Politicians manufacture another "budget crisis" to justify higher taxes What drives up taxes: public schools and welfare Candidates would spend income taxes on transportation Candidate questionnaire on government spending Where does your candidate REALLY stand on higher taxes?
Virginia's current budget shortfall is the result of unsustainable spending increases between 1998 and 2007.
According to the Virginia General Assembly's Joint Legislative Audit and Review Commission report, Review of State Spending: 2007 Update, between 1998 and 2007:
Virginia spending doubled, from $17.6 billion per year to $35 billion (Table 1); Inflation-adjusted spending for public schools increased four times faster than enrollment (Table 4); Inflation-adjusted budgets for public colleges increased three times faster than enrollment (Table 4); Medicaid spending, adjusted for medical inflation increased faster than the number of Medicaid-eligible recipients (Table 4); Of the $17.5 billion increase in state spending, only $2.6 billion went to ease Virginia's transportation crisis (Table 13).
Also, according to the just-released ACT college admissions test 2009 Profile Report for Virginia, only 27 percent (26 percent in 2008) of Virginia high school seniors were prepared for college-level coursework (Table 1.1, page 7).On behalf of the Northern Virginia Tea Party coalition, the Fairfax County Taxpayers Alliance mailed questionnaires to 60 candidates asking if they felt these spending increases were excessive, sufficient, or insufficient. Here are the questionnaires:
Candidate Questionnaire on Virginia spending - PDF version Candidate Questionnaire on Virginia spending - MS Word version These questionnaires were sent, via certified mail, to the candidates for governor (Creigh Deeds, Bob McDonnell), lieutenant governor (Bolling, Wagner), attorney general (Cuccinelli, Shannon), and the 54 Northern Virginia candidates for delegate. (There are no state senate races this year.)
Candidates were asked to respond by September 1. As of September 19, eleven delegate candidates and no statewide candidates had responded.
Visit the Virginia Who's My Legislator website to determine your delegate district.
The following candidates for delegate said that all the spending increases were excessive (except for Hyland, who was undecided about spending increases for public colleges, and Danny Smith, who was undecided about spending increases for both public schools and colleges):
Hyland (R-35) www.HylandForDelegate.com Cannon (R-36) www.CannonForDelegate.com Smith (R-38) www.DannyForDelegate.com Cholko (L-39) MattCholko.com Bury (R-39) www.JoeBury.com Bolognese (R-41) KerryBolognese.com Nank (R-43) www.TimNank.com Ringel (R-48) www.RingelForDelegate.com Merola (R-53) www.Merola09.com The following said that the spending increases were sufficient:
Watts (D-39) VivianWatts.com The following said that the spending increases were insufficient:
Ruebner (Green-47) RuebnerForDelegate.org Candidates who do not campaign for spending cuts before they are elected have no mandate to reduce spending or taxes after they are elected.
Make sure that the candidates you vote for have gone on the record about Virginia spending.When candidates ask you for money, volunteer support, or your vote, ask them to answer the Northern Virginia Tea Party candidate questionnaire.
Click here to see all candidates running in Fairfax County and their contact information.
Voters outside of Fairfax County can visit the Virginia State Board of Elections Candidates List to determine candidates running in any Virginia county or city.Candidates receive more questionnaires than they can answer. To encourage candidates on your ballot to answer this questionnaire:
Mail it to them and ask them to respond. When candidates ask for contributions and volunteer support, ask them to answer this questionnaire. At candidate meet-and-greets, give candidates a copy of the questionnaire and ask them to respond. At candidate forums, request that these questions be asked. Publicize this questionnaire in emails, blogs and letters to the editor.
The $650M budget shortfall faced by the county this year is not the result of too little money; it is the result of too much money. During the housing bubble, the supervisors used higher assessments as political cover to double real estate taxes. With the resulting extra hundreds of millions of dollars in revenue, county inflation-adjusted spending has increased more than twice as fast as population. Fairfax County Public Schools inflation-adjusted spending has increased three times faster than enrollment.
If the county and schools had increased spending at the same rate as inflation, population, and enrollment between FY2000 and FY2009, the county would be facing a $50M shortfall instead of a $650M shortfall. (more ...)
The Superintendent's FY2010 budget contemplates a $200-million cut that would increase class size by two students. However, the Superintendent does not acknowledge that since FY2000, school spending increased $429 million more than needed to keep up with enrollment and inflation. At his budget press briefing, we asked the Superintendent how much of that increase was spent on fringe benefits. He did not know.
More than half of the $429 million was spent to give school employees higher raises ($110 million) and better benefits ($151 million) than taxpayers get.
Between FY2000 and FY2007, residential real estate taxes increased ten percent per year. Raises for school employees were over five percent per year. According to the County Executive, homeowner incomes were increasing two percent per year. (more ...)
Governor Kaine's proposed budget cuts school funding by six hundred million dollars. Here are some points to consider in evaluating the Governor's plan:
Between 2000 and 2007 (most recent year for which data is available), total inflation-adjusted public- school spending in Virginia (local, state, and federal) increased four times faster than enrollment (34% vs. 8%). Staff increased twice as fast as enrollment (18% vs. 8%). Between 1979 and 2007, real spending increased 11 times faster than enrollment (165% vs. 15%) and staff six times faster (97% vs. 15%). In dollars, since 2000 Virginia real spending on public schools increased $3 billion more than needed for inflation and enrollment growth ($3.9B vs. $.9B). The increase since 1979 is $9 billion ($9.9B vs. $.9B). (more ...)
NOTE: Scoring at the 66th percentile means that the average Fairfax County Public Schools (FCPS) senior scored higher than 66 percent than the 1,518,859 seniors who took the 2008 SAT. It does NOT mean that the FCPS school district is only at the 66th percentile of all school districts. The College Board, which administers the SAT, does not publish rankings of school districts.
SCHOOL FAIRFAX COUNTY PUBLIC SCHOOLS
2008 SAT RESULTSCOLLEGE PLANS (2008) ATTAIN 4-YR COLLEGE DEGREE (EST) READING MATH READING + MATH PERCENTILE RANK 2-YEAR 4-YEAR THOMAS JEFFERSON 722 749 1471 98 1 0% 100%% 100% LANGLEY HIGH 601 621 1222 82 2 6% 91% 83% MCLEAN HIGH 579 601 1180 77 3 18% 76% 61% WOODSON HIGH 577 596 1173 76 4 15% 81% 67% OAKTON HIGH 563 583 1146 72 5 17% 79% 65% LAKE BRADDOCK SEC. 554 576 1130 69 6 25% 69% 51% MARSHALL HIGH 550 580 1130 69 6 26% 67% 50% MADISON HIGH 555 568 1123 68 7 17% 79% 65% All FCPS high schools 547 565 1112 66 25% 68% 50% ROBINSON SEC. 542 565 1107 65 8 21% 71% 53% HERNDON HIGH 546 554 1100 64 9 24% 68% 50% CHANTILLY HIGH 533 561 1094 63 10 23% 69% 51% WESTFIELD HIGH 532 559 1091 63 10 23% 72% 54% WEST SPRINGFIELD HIGH 540 549 1089 63 10 27% 68% 50% CENTREVILLE HIGH 525 548 1073 60 11 24% 67% 48% SOUTH COUNTY SEC. 527 534 1061 58 12 27% 66% 46% FALLS CHURCH HIGH 521 536 1057 57 13 33% 49% 32% SOUTH LAKES HIGH 526 531 1057 57 13 28% 58% 37% LEE HIGH 514 534 1048 56 14 45% 47% 32% FAIRFAX HIGH 511 536 1047 55 15 36% 57% 37% STUART HIGH 511 518 1029 52 16 42% 50% 31% ANNANDALE HIGH 505 520 1025 51 17 42% 49% 30% WEST POTOMAC HIGH 511 514 1025 51 17 33% 57% 36% VIRGINIA 511 512 1023 51 NATION 502 515 1017 50 HAYFIELD SEC. 507 503 1010 49 18 35% 57% 37% EDISON HIGH 493 508 1001 47 19 34% 53% 32% MOUNT VERNON HIGH 491 498 989 45 20 38% 45% 25%
"College Plans" shows, for each high school, the percent of the Class of 2008 graduates who planned on attending two-year and four-year colleges.
Sixty-eight percent of all Class of 2008 graduates planned to attend four-year colleges.
"Attain 4-Year College Degree" estimates, for each high school, the percent of 2008 graduates who will earn four-year college degrees within six years.
The FCTA estimates that about fifty percent of all Class of 2008 graduates will earn four-year college degrees within six years (i.e., by 2014).
FCPS does not know what percentage of its graduates attains four-year college degrees. However, we can estimate this percentage based on data from the State Council of Higher Education in Virginia (SCHEV):
Sixty-seven percent of freshmen at Virginia four-year public colleges graduate within six years. (Link) Graduation rates are higher at competitive colleges, e.g., 93 percent for U. Va. compared to 47 percent for Va. Commonwealth. We approximate this by saying that a school's SAT percentile equals the percentage of college freshman from that high school who will obtain a four-year degree. Using McLean for example, the percentage of McLean HS seniors who will graduate from a four year college is .76 * .77 = 59%. Notice that the SAT percentile approximates the percentage of seniors attending four-year colleges. The biggest exception is Madison HS. Madison's SAT percentile is at the 68th percentile but the percent of Madison seniors attending a four-year college is 79%. Where there is a difference between a school's SAT percentile and the percentage of its graduates going to four-year colleges, we use the larger number for the college graduation rate. Using Madison HS for example, the estimated percentage of seniors graduating from a four-year college is the percentage attending a four-year college squared: .79 * .79 = 62%. According to a 12/9/08 email from SCHEV, about 12 percent of freshmen at Virginia two-year colleges obtain a four-year college degree within ten years. So for example, the estimated percent of McLean HS seniors attaining a four-year college degree is .76*.77 + .18*.12 = 61%.
FCPS publishes SAT results in an annual press release. Table to convert SAT scores to percentiles is found at www.collegeboard.com.
According to the 2009 ACT college admissions test profile for Fairfax County Public Schools, 39 percent of the 3,237 seniors tested (?? percent of all FCPS seniors) were prepared for college.
84 percent were prepared for college English composition 67 percent were prepared for college algebra 69 percent were prepared for college social science 44 percent were prepared for college biology. Thirty-nine percent were prepared in all four areas.
This is an increase since 2003 when only 1,107 seniors (10 percent of all seniors) took the ACT. Of these, 28 percent were prepared for college.
More students take the SAT than the ACT exams. In 2008, approximately 7,900 seniors (70 percent of alll FCPS seniors) took the 2008 SAT.
Unlike the ACT, the SAT college admissions exam does not estimate the percent of test-takers that are prepared for college.
The cause of Fairfax County's $650 million shortfall for the FY2010 budget is that between 2000 and 2009, county and school spending increased much faster than inflation, population, and enrollment. Most of the increase was to cover the cost of raises, health insurance, and pensions.
FAIRFAX COUNTY SPENDING TRENDS FAIRFAX COUNTY PUBLIC SCHOOLS FAIRFAX COUNTY
NON-SCHOOL SPENDING![]()
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Increased spending for benefits gives county and school employees better pensions and health insurance than taxpayers have.
According to the Bureau of Labor Statistics, nationally 79 percent of state and county workers but only 20 percent of private-sector workers have pensions.
Nationally 72 percent of state and county workers but only 52 percent of private workers have employer-provided health insurance.
Increased spending for salaries paid for county raises that were higher than private-sector raises.
Between 2000 and 2007, county non-school employees had average annual raises of 4.6%. Average annual raises for school employees was over 5.5%. However, according to the county executive, homeowner incomes between 2001 and 2007 increased nine percent, which is less than two percent annually.
The county bases salaries and benefits on what neighboring counties are paying and not on private sector compensation.
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While county staff grew at about the same rate as population, school staff increased twice as fast as overall enrollment. ![]()
The Virginia Standards of Learning (SOL) tests have two passing levels - proficient and advanced.
"Proficient" means "barely proficient" and corresponds to passing or a "D" grade.
"Advanced" is a better indicator of the ability to do college-level work.
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Increasing school spending eight times faster than enrollment accompanied an increase of the average SAT score from 1063 to 1108 in 2008.
In comparison, seniors at Thomas Jefferson High School for Science and Technology scored at 1471 in 2008.
Since 1992, there has been no improvement in the SAT Minority Student Achievement Gap, between Whites and Asians on the one hand and Blacks and Hispanics on the other.
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Public Safety funds the sheriff (courts and jail), police, and fire and rescue.
Health and Welfare funds low-income childcare and eldercare. It also funds the Community Services Board, which serves the mentally ill, mentally retarded, and provides substance abuse recovery assistance.
Employee benefits pays for health insurance, pensions, social security, etc., for all county non-school employees.
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The fastest-growing components of the Fairfax County budget are employee benefits, health and welfare, public schools (includes operating budget and debt service), and public safety.
Fairfax County Public Schools gets about 75 percent of its funding from the county, 20 percent from the state, and 2 percent from the federal government.
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Children born out-of-wedlock are at higher risk for poverty and are more likely to require county services.
County services for mothers with out-of-wedlock children include housing, medical care, food stamps, childcare, transportation, and job training.
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In 2007 the Virginia General Assembly passed HB3203, which authorized about $400 million in new taxes and fees for transportation. The Virginia Supreme Court subsequently found most of the bill to be unconstitutional and public opposition forced the repeal of the "civil remedial fees" that increased some traffic fines to $1000. However, what did survive from HB3202 was authorization given to county supervisors to raise real estate taxes on business. So Fairfax County supervisors raised the commercial real estate tax rate by 11 cents, resulting in a $52 million tax hike on businesses, who will pass the higher taxes on to the consumers.
Tax hikes for transportation are unnecessary. Transportation is a state, not a county, responsibility, and Virginia has had ample tax-revenue increases to pay for transportation. However, transportation revenues are diverted to out-of-control spending increases for public education and welfare.
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Between 1998 and 2007 Virginia spending doubled, from $17.6 billion to $35.1 billion.
That is $17.5 billion of new spending.
To keep up with population growth and inflation, the budget needed to increase by only $8 billion, to $25.6 billion.
This graph is based on numbers in the next table, below.
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Between 1998 and 2007, Virginia spending increased at an average annual rate of 8 percent.
See the column lableled "Total" and its associated "Percent Change" column. This table is from the Virginia General Assembly's Joint Legislative Audit and Review Commission (JLARC) report, Review of State Spending: 2007 Update, available here or at jlarc.state.va.us (pdf file).
To keep up with population and inflation, spending needed to increase 4 percent per year.
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Of the $17.5 billion of new spending, only $2.6 billion was allocated to transportation.
More transportation spending should come from existing revenues and not from billion-dollar tax hikes.
These charts are based on the Virginia General Assembly's Joint Legislative Audit and Review Commission (JLARC) report, Review of State Spending: 2007 Update, available here or at jlarc.state.va.us (pdf file).
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This table is from page 26 of the JLARC 2007 report on state spending.
It shows that most of the $17.5 billion spending increase went to education (public schools and public colleges) and Health and Human Resources. The latter includes large spending increases for Medicaid.
There was also a large increase for Public Safety, including prisons.
This table does not include the increase of $950 million to reimburse local governments for the "car tax cut."
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This table is from page 7 of the JLARC 2007 report on state spending.
It shows that between 1998 and 2006, inflation-adjusted spending for public schools increased four times faster than enrollment (37% vs. 9%). Public-school staff increased five times faster than enrollment (48% vs. 9%).
Likewise, inflation-adjusted budgets for public colleges increased three times faster than enrollment (46% vs. 15%).
The number of Medicaid-eligible recipients increased twice as fast as population (29% vs. 12%), and the Medicaid budget, even after adjusting for medical-care inflation, increased four times faster than population (48% vs. 12%).
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Between FY1979 and FY2007, Virginia Public Schools inflation-adjusted spending increased 11 times faster than enrollment, 165% vs. 15%.
School staff increased six times faster than enrollment, 95% vs. 15%.
According to the U.S. Census Bureau's report, Public Education Finances - 2006, Virginia ranks 17th among the 50 states and Washington, D.C., in per-pupil elementary-secondary spending on instruction. (Table 11, page 11)
Trends in the Statewide Remediation of First-Year Students Number of first-time, first-year students, having graduated at a Virginia high school in the previous 12 months, enrolled in remedial coursework during their first year of enrollment. Year Total in Remedial Courses English ESL Reading Math Total Students Percentage of Students in at Least One Remedial Course 2001-02 6,419 3,734 163 25 5,117 30,564 21% 2002-03 5,127 2,878 42 4,269 29,750 17% 2003-04 5,946 3,473 100 21 4,729 32,408 18% 2004-05 7,573 4,372 298 81 5,669 35,006 22% 2005-06 6,486 3,867 142 77 4,888 35,129 19% 2006-07 9,191 5,341 246 268 6,884 39,282 23% 2007-08 7,424 4,105 63 273 5,949 38,894 19% One out of five Virginia high-school graduates attending college requires remediation.Source: State Council of Higher Education for Virginia website, Dec. 6, 2008.
Visit Statewide Remediation of First-Year StudentsAccording to the 2009 ACT college admissions test 2009 Profile Report for Virginia, only 27 percent (26 percent in 2008) of the 17,902 Virginia high school seniors tested were prepared for college (Table 1.1, page 7). This is up from 18 percent in 2003.
The transportation solution is to manage education and welfare spending so that they better track the increases in population and inflation. Out-of-control education and welfare spending drive up taxes and divert money from transportation.The failure of public schools to educate low-income students and welfare, which promotes out-of-wedlock births by providing subsidized medical care, housing, food, and childcare to unwed mothers, are perhaps responsible for the increase in inmates. The state-responsible inmate population increased more than twice as fast as population (32% vs. 12%), and the probation and parole population increased four times faster than population (55% vs. 12%).
Higher taxes are not the solution; they are the symptom of ineffective government programs, especially education. According to the ACT college admissions test, only 23 percent of Virginia, and U.S., high school graduates are prepared for college.
According to a 2006 survey by the Bureau of Labor Statistics, the largest U.S. industry was state and local government. Of 150 million U.S. workers, 12.8 percent or 20 million, were employed by state and local governments.
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State and local government workers are also better paid than private sector workers. A front-page USA Today article, "State, local government workers see pay gains" (Feb. 1-3, 2008 Page A1) stated:
State and local government workers now earn an average of $39.50 per hour in total compensation... Private workers earn an average of $26.09 an hour. Benefits are a big reason for the gap.
Companies have trimmed pension benefits and asked employees to pay a greater share of medical costs.
Few governments have imposed similar cuts on teachers, snowplow drivers, lawyers and other civil servants.
From 2000 to 2007, public employees enjoyed a 16% increase in compensation after adjusting for inflation compared with 11% for private workers.According to the Bureau of Labor Statistics (BLS), 79 percent of state and county workers but only 20 percent of private workers participate in "defined-benefit" retirement plans (pensions).
Similarly, the BLS reports that 72 percent of state and county workers but only 52 percent of private workers have employer-provided medical insurance.
Bureau of Labor Statistics sources:
National Compensation Survey: Employee Benefits in State and Local Governments in the United States, September 2007 (BLS Link) National Compensation Survey: Employee Benefits in Private Industry in the United States, March 2007 (BLS Link)
Fairfax County's shortfall in next year's projected budget is due to unsustainable increases in real estate taxes.
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Between Fiscal Year FY2000 and FY2007, inflation-adjusted real estate taxes paid by the typical Fairfax County homeowner increased by almost $2000.
For the 19 years between 1981 (earliest year for which data is available) and 2000, inflation-adjusted Fairfax County real estate taxes were flat, hovering around $3100.
Fairfax County supervisors raised real estate taxes between 2000 and 2007 because they could use higher housing assessments as political cover.
The real estate tax is equal to the assessed value of a house times the tax rate, which the supervisors set. When assessments increase, the supervisors generally reduce the tax rate, but not enough to offset the assessment increase. Real estate taxes therefore increase, but the supervisors claim that they have cut taxes.
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In addition to real estate taxes, Fairfax County homeowners also pay personal property tax (the "car tax"), a one-percent county sales tax, and taxes on gas and electric utilities. These taxes account for about three-quarters of the county's annual tax revenue. Additional taxes, not included here, are telephone, recordation and deed of conveyance, motel/hotel, and "Business, Professional & Occupational Licenses" (BPOL) taxes.
Starting in FY1999, the car tax paid by residents to the county decreased as a result of then-governor Gilmore's campaign pledge to eliminate the car tax. However, the supervisors used the lower car tax as a justification for higher real estate taxes. Today the inflation-adjusted real estate tax is higher than the combined real estate and car tax prior to FY1999.
Inflation-adjusted county taxes paid by the typical homeowner increased from about $4000 in the 1980s to $4500 in the 1990s to about $5500 currently.
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Besides county taxes, homeowners pay an additional four percent sales tax and individual income tax to the Commonwealth of Virginia.
The total sales tax is five percent, one percent to the county and four percent to the state.
Sales and individual income taxes account for about 80 percent of Virginia's tax revenue. Corporate income, recordation, deed of conveyance, and estate taxes account for another ten percent.
Individual income taxes paid by Fairfax County taxpayers are not available prior to FY1986 and are not yet available after FY2006.
Between FY1988 and FY1996, Fairfax County homeowners paid about $9500 in inflation-adjusted county and state taxes. Today they are paying about $12,000.
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Between FY2000 and FY2007, the inflation-adjusted mean residential assessment in Fairfax County increased at an average rate of 12% per year, from $257,433 to $577,703. A shorter assessment spike occurred between FY1987 and FY1991.
However, between FY1981 and FY2000, the long-term average growth in inflation-adjusted residential assessments was only 1.3% per year. Whenever assessments grew faster than 1.3 percent, subsequent assessments would decrease until the assessed value returned to the 1.3 percent average growth rate.
This suggests that a house currently assessed at $524,076 is actually worth about $327,000. It also suggests that the mean inflation-adjusted Fairfax County assessment will continue to decrease over the next few years from the current (as of January 1, 2008) value of $524,076 to around $350,000 (in FY2009 dollars.
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Historically, real estate taxes (blue line)increase and decrease with assessments (red line). When assessments increase, the supervisors can, as noted above, raise taxes while reducing the real estate tax rate. However, when assessments decrease or are flat, to increase taxes the supervisors have to raise the tax rate, which is unpopular. Between 1981 and 2000, whenever real estate taxes rose above the long-term trend (green line), they subsequently decreased.
Between 2000 and 2007, the supervisors increased real estate taxes from $3166 to an unsustainable $5142 for the typical household. As assessments and taxes return to their normal levels, the supervisors face a revenue shortfall.
This could have been avoided if the supervisors had kept the typical homeowner's real estate tax at a sustainable level, around $3350. This corresponds to a real estate tax rate of 69 cents instead of the current rate of 92 cents.
The Washington Post cites FCTA opposition to Fairfax County's 2008 bond referendum: Economy Dims Prospects for Fairfax Parks Bond Issue. Thursday, September 25, 2008; Page VA04 (Fairfax Extra). The following supplements the FCTA's quote in the Post.
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Fairfax County is wasting about $100 million annually on interest for its $2 billion debt because, for most years, the amount borrowed (bond revenues) is about the same as the cost of borrowing (debt service). See bars on the graph.
When the county does this, its debt (red line on the graph) increases. Between 1983 (first year for which data is available) and 2008, Fairfax County inflation-adjusted debt has increased from about $1.5 billion to $2.3 billion. The $2.3 billion in debt does not include interest owed, which is another $800 million.
If the county had not borrowed, it could have used the debt service funds to pay for capital improvements. Capital spending would have been about the same as with bonds, and there would be no debt and no annual $100-million interest payment.
The high cost of interest for bonds is justified only when the revenues from bond sales significantly exceed the annual debt service payment. While it depends on interest rates and the repayment period (20 years, 30 years, etc), the amount you can borrow is about ten times the annual debt-service payment. This is called "leverage." To get leverage, you cannot sell more bonds until previously sold bonds are paid off. You would have one year where revenues from a bond sale are ten times the annual debt-service payment. Then for the next twenty or thirty years you would pay the debt service but sell no more bonds. However, Fairfax County, except for 1989, sells bonds every year.
If you sell bonds every year you lose leverage. You can only borrow approximately the same amount you paid back. However, the amount you owe increases by the amount you borrow plus interest. This is what Fairfax County is doing. For the county, whose repayment period is usually twenty years, interest costs are about half the amount borrowed. So if the county borrows $200 million through bond sales, it owes another $100 million in interest.
In 1994, the county sold an extra $117M of bonds to purchase the Herrity and Pennino buildings adjacent to the Government Center. The total amount borrowed was twice the debt service. In this case borrowing would have been justified, assuming that the purchase, which was controversial, was justified.
The county did not include the 1994 bond sale for the Herrity and Pennino buldiings in its total debt figure until 2002. That is why there is a jump in the red line in 2002.
(With the purchase of the Herrity and Pennino buildings the supervisors bypassed putting the bond to referendum by having the Fairfax County Economic Development Authority (EDA) sell the bonds. The county also used the EDA to bypass referenda for the South County High School and the new school administration building bonds. The county is not legally obligated to pay off bonds unless they are approved by referendum. Bonds not approved by referendum are therefore riskier, have a lower credit rating and a higher interest rate, and consequently cost the taxpayers more.)
Having gotten itself in the situation where the cost of borrowing about equals bond revenues, the county cannot easily dig its way out. To reduce borrowing, the county would have to reduce operating expenses by $250M to free up money to replace bond revenues. The county should not have gotten into this situation in the first place.
The county should start getting out of debt and should eliminate non-essential borrowing. The bond referendum, for example, pays for maintenance of county recreation centers and golf courses. The county should not be using taxes to compete with the private sector. If golf course and recreation center maintenance cannot be paid for from user fees, then they should be privatized or divested. Funding for the "countywide sportsplex", artificial turf, trail enhancements, development of new parks should wait until they can be funded on a pay-as-you-go basis.
In June, 2008, the Fairfax County Taxpayers Alliance emailed to the supervisors a request to include the projected interest costs for bonds and the annual amounts for bond revenues and debt service in the county's "2008 Bond Referendum Information for Residents" pamphlet.
The county declined to do this.
Moreover, the county's pamphlet states that bonds do not increase taxes. This is false. In FY2009 the county is paying $106 million in interest on its $2.3 billion debt. This $106-million interest payment accounts for 4.6 cents of the county's 92-cent real-estate tax rate. (Each penny of the real estate tax rate generates $22.8 million in tax revenue.)
Download handout with earlier version of these graphs (1/31/06). This two-page pdf file was given as a handout to the Virginia Senate Finance Committee. It also shows that while staff in Virginia's public schools has been increasing seven times faster than enrollment, Virginia SAT scores have remained flat.
The Center for Education Reform gives Virginia's charter school law a "D" grade. Virginia has only three charter schools, with a fourth scheduled to open in August, 2008. As of November, 2005, North Carolina had 100 charter schools.
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The Connolly Years: Taxes up 10 percent per year
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At its meeting on August 15, 2006, the Fairfax County Republican Committee (FCRC) overwhelmingly approved a resolution opposing higher taxes and fees for transportation. The Committee instead urged the Virginia General Assembly to pay for transportation from the budget surplus.The FCRC resolution was drafted by Fairfax County Taxpayers Alliance (FCTA) First Vice-President, the Honorable David C. F. Ray. It was a substitute for an FCTA resolution submitted to the FCRC by FCTA president, Arthur G. Purves.
Resolution Opposing Higher Taxes and Fees for Transportation
Adopted by the Fairfax County Republican Committee, August 15, 2006
- Whereas the Virginia General Assembly during the 2006 session adopted a biennial budget containing record spending increases, and
- Whereas Virginia continues to experience budget surpluses, and
- Whereas the voters of Northern Virginia overwhelmingly rejected the sales tax increase referendum in 2002, and
- Whereas the Virginia General Assembly in 2004 passed the largest tax increase in Virginias history, and
- Whereas the Virginia General Assembly is planning a special session later this year to address transportation, and
- Whereas several interests have proposed various tax increases to fund transportation needs,
Therefore,
- Be it resolved that the Fairfax County Republican Committee calls on the Virginia General Assembly to reject any and all tax and fee increases during the upcoming 2006 special session and the 2007 session, and
- Be it further resolved that the Fairfax County Republican Committee calls on the Virginia General Assembly to use surplus budget money and any as-yet unallocated funds to address transportation needs, and
- Be it further resolved that a copy of this resolution be provided to all Republican members of the General Assembly from Fairfax County prior to the convening of the 2006 special session.
In a Washington Times article Burden of taxes up over 10 years (2/9/06), Virginia Governor Tim Kaine's new Secretary of Finance, Jody M. Wagner, attempts to blame tax increases on the state's car-tax rebate. In fact, former-Governor Gilmore's car-tax rollback accounts for less than ten percent of the state's budget increases over the past ten years. Education and welfare account for 60 percent of the increase.
State and local government growing faster than general economy Grandfather Economic Report by Michael Hodges (05/13/06) THE NEW NEW LEFT: How American Politics Works Today - Tax Eaters vs. Taxpayers (12/4/05) Real estate taxes fund generous government-sector raises, pensions, and health insurance while the private sector is losing theirs.
(2/11/05) This is a large document (23Mb) and takes several minutes to download.Download the 2005 Virginia state budget (pdf file - 675 pages, 2.5 Mb) Spends $66B during FY2005 and FY2006. It is House Bill 1500, approved May 4, 2005, and published as Chapter 951, Acts of the Assembly.
Collective Bargaining Drives Away Good Teachers -- Read More Here
Dulles Toll Study Considers $3 Tolls -- Report quietly released eight days before vote to raise tolls
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