POLITICIANS MANUFACTURE ANOTHER "BUDGET CRISIS" TO JUSTIFY HIGHER TAXES
However, as the adjacent graph shows, during the dot-com bubble
(1997-2000) and the housing bubble (2004-2007) Virginia spending soared
to unsustainable levels. That made a downturn inevitable.
If there was a crisis, it was the reckless rate at which politicians increased spending. For example, between fiscal years (FY) 1996-2000, General Fund tax revenue had increased nine times faster than population (37 percent compared to 4 percent). (The Virginia budget year, or fiscal year, begins July 1, not on January 1.)
They should have returned the excess revenue to the taxpayer. They did not. Their strategy is to spend all revenue increases during a boom, knowing that there will be the inevitable time when the boom will end and revenues will fall. They then call that a crisis, to justify a tax hike.The graph on this page compares long-term trends in population and inflation-adjusted General Fund revenue (solid lines). The dashed line shows the average increase in inflation-adjusted General Fund revenues between 1961 and 1996. The “plus” signs between 1996 and 2010 show projected revenues based on the 1961-1996 trend.Compared to the 1961-1996 long-term average, revenue increases starting in 1997 were unsustainable. Specifically, the 1961-96 trend indicates that, on the average, real revenues increase by $244 million per year. So when legislators, for example, increased spending by $1.3 billion in FY2005, they should have known that a revenue decrease was inevitable.The long-term graph shows that even after two budget “crises” inflation-adjusted General Fund revenues have increased 943 percent since 1961. That is ten times greater than the increase in population (96 percent). The previous graph shows that since 1996, revenue has increased more than twice as fast as population (45 percent vs. 19 percent). It is remarkable that when inflation-adjusted state revenue increases ten or even two times faster than population, the governor can say that there is not enough money to keep highway rest stops open and to build new roads.Note: These two graphs show General Fund revenues. General Fund revenues come primarily from income and general sales taxes. The other half of the Virginia budget is the Non-General fund, whose revenues are mainly college tuition payments, fees paid to Virginia hospitals, federal grants, and taxes earmarked for transportation.
Virginia spending increased dramatically between 1996 and 2007, during the “dot-com bubble” and the “housing bubble.”
Table 1, shown here, is taken from that report. It shows General Fund, Non-General Fund, and total spending for each year from 1998 through 2007.
Of the remaining $15 billion, $6.6 billion went to education, $4.5 billion went to Health and Human Resources (mainly Medicaid), and $1 billion went to public safety, which is primarily courts and prisons. Were these non-transportation spending increases necessary? Table 4 from the report shows that state inflation-adjusted spending for public schools increased four times faster than enrollment (37 percent vs. 9 percent). School staff increased five times faster (48 percent vs. 9 percent). Budgets for Virginia public colleges and universities increased three times faster than enrollment (46 percent vs. 15 percent). Medicaid spending, adjusted for medical inflation, increased much faster than the number of recipients (48 percent vs. 29 percent). Over the same period, Virginia population increased 12 percent. What have these spending increases accomplished? According to the ACT college admissions test 2009 Profile Report of Virginia, only 27 percent (26 percent in 2008) of Virginia high school seniors were prepared for college-level coursework. Test of Leadership, a 2006 federal Department of Education study of higher education in the U. S. stated, “Over the past decade, literacy among college graduates has actually declined” (p. X). Medicaid is three programs in one: care for the disabled, subsidized healthcare for unwed mothers and their children, and nursing home care for the indigent. The latter two programs are problematic. Medicaid and other anti-poverty programs have coincided with higher rates of drug use, out-of-wedlock births, and school truancy among the poor. Also, because of government-subsidized nursing care, children are transferring care of their parents from themselves to the government. Public schools are notoriously unsuccessful at educating low-income children. Welfare undermines marriage by providing subsidized housing, food, medical care, childcare, and sometimes job training, to unwed mothers. Our taxes fund a system that traps people in poverty, creating a class that is perpetually dependent on government.
After four years of soaring tax revenues from speculation during the housing boom, tax revenues are beginning to return to normal. To taxpayers, this is good news. However, the governor and legislators call it a crisis and use it as an excuse to cut transportation funding. Next year, Virginia will have almost no money for new road construction. Legislators made a budget downturn inevitable by enacting
unsustainable spending increases during the dot-com and housing booms between
1998 and 2007. According to the Virginia
General Assembly’s Joint Legislative Audit and Review Commission, between 1998
and 2007, the Virginia budget doubled, from $17.6 billion to $35.1
billion. Of the $17.5 billion increase,
$12 billion went to education and welfare. Only $2.6 billion was spent on Virginia’s most
urgent need: transportation. According to the Audit and Review
Commission’s Review of State Spending,
2007 Update (available on www.fcta.org), between 1998 and 2007:
Regarding education, the ACT college admissions test 2009 Profile Report for Virginia states that only 27 percent of Virginia high school seniors are prepared for college. Last August, on behalf of the Northern Virginia Tea Party coalition, the Fairfax County Taxpayers Alliance sent, via certified mail, questionnaires on Virginia spending to all statewide candidates and to all delegate candidates in Northern Virginia. Responses were received from 11 candidates. Visit www.fcta.org to see copies of candidates’ responses. Of the responses, nine candidates said that education and/or
Medicaid spending increases were excessive and that they would support funding
transportation from income taxes (General Fund revenues), which have
traditionally been reserved for education and welfare. These
are the candidates that would therefore reduce taxes while increasing annual
transportation spending by billions of dollars:
None of the statewide candidates (governor, lieutenant governor, and attorney general) have answered this questionnaire. When candidates ask your for your money, volunteer time or your vote, ask them to answer the questionnaire on state spending. SEE OTHER SIDE FOR QUESTIONNAIRE Northern Virginia Tea Party Candidate Questionnaire – November, 2009,
General Election
Question: The increase in the Virginia budget between 1998 and 2007 was: __ Excessive __ Sufficient __Insufficient __Undecided
Question: The increase in Virginia public-school spending between 1998 and 2006 was: __ Excessive __ Sufficient __Insufficient __Undecided
Question: Budget increases between 1998 and 2006 for Virginia’s four-year public colleges and universities were: __ Excessive __ Sufficient __Insufficient __Undecided
Question: Academic achievement in Virginia public schools is: __ Excellent __Good __ Satisfactory __Unsatisfactory __Undecided
Question: The increase in Virginia Medicaid spending between 1998 and 2006 was: __ Excessive __ Sufficient __Insufficient __Undecided
Question: Would you let transportation compete with public education, public safety, and healthcare for sales and income tax revenues? __ Yes __No __Undecided NAME: _______________________________ DISTRICT: ____________ DATE: ______________ Please return to: Fairfax County Taxpayers Alliance PO Box 356 Fairfax, VA 22038 OR email signed copy to webmaster@fcta.org. Responses will be posted on www.fcta.org.
Republicans and Democrats alike pledge to keep taxes low, but can you believe them if they are unwilling to answer the FCTA questionnaire? Listed below are the candidates running in Fairfax County. Underlined candidates answered the FCTA candidate questionnaire. Underlined candidates in bold stated that Virginia spending growth between 1998 and 2007 was excessive. If your candidate has not yet responded, then send them the questionnaire or question them at candidate events. Use email and websites below to contact candidates. Phone your local electoral board to identify your delegate district. The Fairfax County electoral board phone number is 703-222-0776. Visit www.fcta.org for candidate information outside of Fairfax County.
We need many more members to persuade elected officials to cut government instead of expanding it. Also, mailing and advertising are expensive. Learn what state and local officials don’t want you to know about their budgets and programs. The FCTA needs your contribution, and whether you are a Fairfax County or Virginia resident, you need FCTA analyses. Please use this form to contribute or contribute online at www.fcta.org. If your mailing label says “Complimentary,” join to receive future Bulletins. Current FCTA members: Please renew if the date on your mailing label is before November 1, 2009 Thank you!
_____Enclosed is my annual FCTA membership dues of $15 _____I’m enclosing an extra contribution of $_______ _____I would like to volunteer. Please contact me.
Name(s)____________________________________ Mail To: The Fairfax County Taxpayers Alliance
Address___________________________________ P.O. Box 356
City/State/Zip_______________________________ Fairfax, Va. 22038
Telephone__________________________________ 703-281-0176 B2009-2
Email________________________________________________________________ To receive FCTA press releases and tax alerts, please provide your email address.
Attend the FCTA annual membership luncheon – Sat., Oct. 24 Get acquainted and socialize with advocates for smaller government. Know more about the Virginia budget than most candidates. Attend the FCTA luncheon! Reservation information is on the back cover of this Bulletin. Please make reservations by Monday, Oct. 19. All FCTA leadership positions are up for election at the meeting. To vote, members must be Fairfax County residents and have dues paid up. The names listed below are proposed for election at the meeting. Nominations will also be accepted from the floor. Officers President: Arthur G. Purves First Vice President: The Hon. David CF Ray Second Vice President: vacant Treasurer: Arthur Purves (acting) Secretary: Perry Young At-Large Directors Arthur Purves The Hon. David C. F. Ray Perry Young Bill Peabody Fred Costello Gary Koerner Geoff Allen (two vacancies) District Directors Braddock: Tom Blau Dranesville: Howie Lind Hunter Mill: David Swink Lee: vacant Mason: Jim Turbett Mount Vernon: vacant Providence: vacant Springfield: Bradford Butler Sully: Chuck McAndrew Fairfax County Taxpayers Alliance
Fairfax, Va. 22038
www.fcta.org
Saturday, October 24, 2009 – 11:30 a.m. to 1:30 p.m. Marco Polo Restaurant – 245 Maple Avenue West (Rt. 123) Vienna VA Menu Selections –– Grilled Salmon – Chicken Parmigiana Vegetarian and special diet requests also available Cost: $20 per person (includes tip and 8% sales tax) Please RSVP by phone (703-281-0176) or email (webmaster@fcta.org) No later than Monday, Oct 19 Questions? Phone 703-281-0176 or email webmaster@fcta.org or PDF (View Download) |
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