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2001 Fall Bulletin


The Fairfax County Chamber of Commerce and almost all candidates, Republican and Democrat, support a referendum asking Northern Virginia voters if they would be willing to raise the sales tax from 4.5 cents to 5.5 cents on the dollar for school and transportation construction.

Chief among the referendum supporters is Democrat gubernatorial candidate, Mark R. Warner, whose transportation plan depends on the sales tax increase but who also says that he does not know whether or not he supports the sales tax increase.

However, there are two things that the tax referendum supporters are not talking about. They do not say how much the 20 percent increase in the sales tax would cost the typical household, and they do not acknowledge what little impact the tax hike would have on schools and transportation.

Sales Tax History

Today's 4.5 cent sales tax was first enacted in 1966, with a two-step phase-in. The sales tax began at two percent in 1967 and increased to three percent in 1968. At the same time, local governments were authorized to implement a one-cent "local option" sales tax, where the proceeds would go to the local government. That brought the tax up to 4 cents.

In 1986, then-governor, Democrat Gerald L. Baliles, increased the sales tax by a half-penny for transportation.

$1800 per household today

According to the Fairfax County FY2002 Adopted Budget Overview, the one-cent local option sales tax generates for the county $145 million tax revenue per year. The budget Overview also states that sales tax paid by a typical household is $397.59 or nearly $400.

If one cent of sales tax costs the typical household $400 per year, and since the full sales tax is 4.5 cents, the typical household is already paying nearly $1800 per year in sales tax.

The proposed one cent sales tax increase, would raise per-household sales taxes to $2200.

This is in addition to property taxes and state income taxes, which cost the typical household $3000 and $5000 respectively. The Taxpayers Alliance does not have an estimate of the average gasoline, federal income, social security, medicare, cigarette, and alcohol taxes and lottery proceeds paid by the typical household.

Washington Post estimate

In an October 15, 2001, article ("Transportation Proposals Split on Referendum") on the front page of the Washington Post Metro section, an example was given that suggested that the sales tax hike would cost only $84 per year. The amount however assumed a half-cent tax increase. We do not know if Mark Warner's transportation plan assumes a one-cent or half-cent sales tax increase because he does not have his transportation plan posted on his campaign website. However, the most prominent tax proposals in the state legislature this year proposed a one-cent increase.

Moreover the Washington Post figure was the amount paid by one person with an income of $100,000. In Fairfax County the average household has 2.7 persons, and the average household income is $90,000. When the Post's $84 dollars is adjusted for all these factors, it comes out to about $400 per household.

Mark Earley threatens a veto

In what was a pleasant surprise to taxpayers, Republican gubernatorial candidate, Mark L. Earley, decided to reinvigorate his languishing campaign by declaring that he would veto a sales tax referendum. Rather than raise taxes, Mr. Earley's transportation plan, which is posted on his campaign website, proposes reallocating one-third

of taxes on insurance premiums from the general fund budget to transportation. While both Mr. Warner and Mr. Earley rely too much on borrowing, which diverts a third of the revenue to interest, Mr. Earley does move in the right direction by tapping into general fund revenues instead of raising taxes.

Where the money is

In the following graph, the top line shows the actual Virginia budget since 1979. The bottom line shows how much the state budget needed to increase to keep up with population growth and inflation. It shows that this year, the state budget has $8 billion more than was needed to keep up with inflation and population.

The following pie chart shows that NONE of the extra $8 billion was allocated to transportation. Instead it went to large increases in social spending, because as was explained in the last FCTA Bulletin, state policy forbids the use of general fund revenues for transportation.

The Washington Post article correctly observed that neither candidate's plan comes close to adequately funding transportation needs. Also, if the tax hike is shared with schools, it may not be spent on buildings. An October 19 Fairfax Journal article states that the teachers' union wants the tax spent on salaries.

While schools are lavishly funded, transportation needs a billion more dollars a year, not the $200 million that might be raised from the sales tax increase.

If transportation had been allowed to have just one-eighth of the $8 billion in general fund revenue increases, that would have been five times more than what the sales tax hike would provide.

The only way transportation can get the large revenues it needs is to be allowed to compete with social spending for state and county general fund revenues.

Fairfax County Public Schools average SAT score still near the 65th percentile
No improvement in minority student achievement gap
School Board continues to suppress SAT percentiles

Despite a budget that has grown twice as fast as enrollment and inflation, Fairfax County Public Schools SAT scores continue to stagnate. The school system boasts that its average SAT score is above the national average, but still does disclose that its average SAT score is at the 63rd percentile.

Nor has the school system made any progress in closing the gap between Whites' scores, which are at the 70th percentile, and African-American scores, which are at the 35th percentile. (In the graph above, there are two different values for year 2000 ethnic SAT scores because the school system is changing the procedure for computing the scores.)

SOL tests are not improving the SAT results. Most Fairfax County high schools with SAT scores below the 50th percentile have met the SOL accreditation standard (see accompanying table). SOL passing scores are calibrated to correspond to "D" performance, since the tests determine if a student graduates from high school, and "D" is a passing grade. In a move that disappoints SOL supporters, the Virginia Board of Education decided to give students SOL credit if they get a score of at least 400 (out of a range of 200-800) on SAT II subject tests. According to College Board statistics, nearly everyone who takes an SAT II subject test gets a score of over 400.

This table shows SAT I (math plus verbal) and Standards of Learning (SOL) test results for each Fairfax County public high school. The table also shows the SAT percentile corresponding to the school's average SAT score. For example, the average SAT score of 1093 at South Lakes High School is at the 63rd percentile, which is also the average for Fairfax County. This means that the average South Lakes student scored higher than 63 percent of the 1.2 million high school seniors who took the SAT I. The Fairfax County School Board does not publish SAT percentiles. Each high school administers 10 or 11 SOL tests in English, math, history, and science. The table shows the average percent of students passing all tests and the number of tests failed. A school fails a test if less than 70 percent of the students taking the test pass it. School accreditation is based on SOL test results. "Provisional" means the school is close to but still below the accreditation standard.

Fairfax County Public Schools 2001 High School Test Results
(In Descending Order by SAT Score)
High School Average SAT Score SAT Percentile SOL Test Average Pass Rate SOL Tests Failed Accreditation Status
JEFFERSON 1456 98 100 0 Full
LANGLEY 1186 78 90 0 Full
WOODSON 1148 72 86 2 Full
MCLEAN 1136 70 87 1 Full
MADISON 1134 70 84 1 Full
W SPRINGFIELD 1111 66 88 1 Full
LAKE BRADDOCK 1108 66 88 0 Full
OAKTON 1102 64 83 2 Full
SOUTH LAKES 1093 63 73 2 Provisional
ROBINSON 1091 62 86 1 Full
CHANTILLY 1070 59 81 2 Full
CENTREVILLE 1069 59 87 1 Full
FAIRFAX 1068 59 82 2 Full
HERNDON 1061 57 83 2 Full
MARSHALL 1061 57 83 1 Full
WEST POTOMAC 1025 50 72 6 Provisional
STUART 1019 49 76 2 Full
HAYFIELD 1017 48 77 2 Full
ANNANDALE 1005 46 77 3 Full
FALLS CHURCH 1003 46 70 6 Provisional
LEE 986 43 78 4 Full
MOUNT VERNON 974 41 65 7 Provisional
EDISON 972 40 76 4 Full
FCPS 1093 63

VIRGINIA 1011 47

NATION 1020 49

Vote "NO" on school bond referendum
Excessive use of bonds has eroded leverage

Passage of the Fairfax County Public Schools $378 million school bond referendum, which will be on the ballot Tuesday, November 6, would perpetuate school overcrowding by rewarding the Fairfax County School Board's fiscal irresponsibility.

Bonds are used for leverage, i.e., to generate a quantity of cash that is much larger than the debt service payments. Debt service is the periodic payment of interest and principal to pay back the bond. However, Fairfax County has sold so many bonds that its annual debt service actually exceeds the revenues from bond sales! For example, in FY2001 the county sold $175M in bonds (of which $130M was for schools) but paid $185M in debt service. Since 1995, Fairfax County has spent $100M more on debt service than it has received from bond sales. That extra $100M could have built five new elementary schools.

Recurring construction expenses should be paid for from the schools' operating budget, which is $800 million more than is required to pay for enrollment growth and inflation over the last 25 years. However, the school board has arbitrarily declared that the operating budget is off-limits to construction. The result is that while buildings are neglected school staff has increased four times faster than enrollment, producing no significant increase in academic achievement.

-Arthur G. Purves

Funding Economic Development: Good for Taxpayers?

According to Fairfax County budget documents, the Fairfax County Economic Development Authority (FCEDA) is an independent authority with an FY2002 budget of $6,837,644 and 33 authorized positions. The FCEDA's Mission is "to encourage and facilitate business and capital attraction, retention, and development in Fairfax County; to promote the County’s cultural, historical, and recreational attractions to business travelers; and to attract business meetings, conferences, and seminars to the County’s meeting facilities in order to expand the County’s nonresidential tax base" (emphasis added).

Note carefully the stated reason for its existence -- to make more money available for the government to spend. Citizens are supporting a government agency whose mission, in reality, is to enlarge the government. In theory, increasing the business tax base shifts some of the tax burden from residential property tax payers to businesses. BUT, the absence of property tax reductions as the proportion of the non-residential tax base grew to over 25% in the 1990s demonstrates that that argument is a sham. The only observable result of this Authority's efforts from the residential taxpayers' perspective has been increasing traffic congestion, shrinking green space, rising home prices, and ever higher taxes on their residences to sustain runaway county government growth.

Knowing the reason for its existence, it is clear that the $7 million spent annually to feed the FCEDA would serve residential property owners better by letting them keep and spend their money. Let business growth occur naturally, without the FCEDA subsidies. If the Authority's activities have true value in the marketplace, let the beneficiaries, such as developers and the hospitality industry, fund its functions, as has been done in the past through Chamber of Commerce or Booster Club activities.

-Ludwig Benner

FCTA Annual Meeting

On Saturday, October 20, 27 members and friends of the FCTA met for a luncheon at the Marco Polo Restaurant in Vienna. The Alliance was pleased to have in attendance the Honorable Jack Herrity, former chairman of the Fairfax County Board of Supervisors.

Connie Bedell, who helped lead FCTA opposition to the 1992 meals tax referendum, was elected first Vice President. Lou DiLeonardo, Elizabeth Smith, Ray Coggin, Warren Hill, and Al Marcy were re-elected as District Directors.

Peter Ferrara, president of the Coalition of Virginia Taxpayers and FCTA at-large board member, spoke on an action plan for fighting the sales tax increase. He asked for committees to contact anti-tax businesses for money; organize events, especially debates; coordinate with Arlington, Loudoun, and Prince William tax watchdog groups; and advocate state legislation to cap spending and cut income taxes. While Virginia is talking about raising taxes, other states, he said, have dramatically reduced income taxes by limiting state spending growth to the rate of inflation and population growth. Studies of state policies show that the states that cut taxes have economies that grow the fastest.

The Fairfax County Taxpayers Alliance
P.O. Box 356
Fairfax, Va. 22030

Have you renewed your membership for 2003? Please renew if the date on your mailing label is before November 1, 2003.

The Taxpayers Alliance supports lower taxes, less spending, and restrained borrowing by our government as well as citizen participation in government through initiative, referendum and recall. We testify at public hearings, disseminate voting records of elected officials, write 'op-ed' articles and letters to newspaper editors, provide speakers to civic groups and analyze and disseminate information on budgets, taxes and borrowing.

We need volunteers and dues-paying members. We would like to hear from you. Please take the time now to return this membership form along with your dues and a contribution. We thank you for your past and continued support.

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Updated October 31, 2003

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