Bulletins‎ > ‎Prior Years‎ > ‎2002‎ > ‎

2002 Spring Bulletin

Twelve reasons why the sales tax referendum is a bad idea

The big government business establishment in Northern Virginia will not be denied on their much-cherished referendum to increase sales taxes for transportation.

Apparently a deal has been cut between Gov. Mark Warner and House Speaker Vance Wilkins for the Legislature to approve such a referendum at the veto session on April 17.

Northern Virginia will then vote this November on whether to increase the sales tax in the region by a half-percentage point to 5 percent, with the additional money to be devoted to increased highway construction and other transportation projects.

Here is a complete compendium of all the reasons why the sales tax referendum is a bad idea, and why you should vote no if it does reach the ballot:

  • Reason One: We already pay plenty of taxes, more than enough to finance a basic government function like roads and highways.
  • The root of the problem is that the state refuses to use any income tax revenues and almost none of the current sales tax revenues for transportation. As a result, per-capita state spending for transportation (adjusted for inflation) has not increased since 1979.

  • Reason Two: Total state spending has been soaring in Virginia in recent years. Over the previous four years, state spending rose by close to 40 percent.
  • Real per-capita spending has increased by two-thirds for welfare, 100 percent for education and 40 percent overall.

    And the state budget for the next two years that was just adopted in the Legislature increased state spending by 7 percent over the last budget, in the midst of a supposedly grave budget shortfall.

    Why didn’t they use some of this increased spending to pay for supposedly critical transportation needs?

  • Reason Three: Government spending in the state already has been increasing too fast. If we raise taxes now to increase transportation spending, total government spending will increase even faster.
  • Virginia has a history of fiscal conservatism. Most Virginians want to keep it that way. But at the rate we are going, Virginia ultimately will be no different from fiscally liberal big government New York or Massachusetts.

  • Reason Four: Taxes in Virginia have been increasing 20 percent faster than incomes since 1979.
  • That means state and local taxes are taking a bigger and bigger share of your income. Indeed, Fairfax and Arlington counties are increasing property taxes by well over 10 percent again this year.

    If sales taxes are increased by 11 percent as proposed in the referendum, this trend will be increased even further.

    To the contrary, we need to stabilize taxes in the state so they will grow no faster than incomes, and not become a bigger burden on working people and retirees.

  • Reason Five: We already tried this and it didn’t work. In 1986, the state increased sales taxes by a half-percentage point with the funds devoted to transportation. Result: The problem is worse today than it was back then.

  • Reason Six: Northern Virginians already pay most of the state’s taxes. But the region gets back only 50 cents in state spending for every dollar it sends to Richmond.
  • Why can’t our great Northern Virginia legislators get a bigger share of what our region already is paying to Richmond to meet our transportation needs?

    If we just got back our proportionate share of the gas tax and other transportation revenues, we would have enough money right there to solve our region’s transportation problems.

  • Reason Seven: Raising taxes will hurt the economy. Moreover, higher sales taxes in Northern Virginia will put the region at a competitive disadvantage compared with the rest of the state.
  • And raising taxes during an economic downturn is particularly counterproductive.

  • Reason Eight: Raising sales taxes increases the tax burden on low- and moderate-income people in particular, because they must spend a bigger share of their incomes.
  • The esteemed members of the Northern Virginia Roundtable, which should be called the Millionaires Club, put a large portion of their incomes in international stock markets and regional real estate development. That portion of their incomes will not be subject to the increased sales tax.

  • Reason Nine: We have no guarantee that the increased sales taxes will even be used for transportation.
  • Gov. Warner proposed that the half-percentage point of the current sales tax that supposedly is used for transportation instead be used for general spending during the current budget crunch.

  • Reason Ten: Do we really want to increase highway construction as much as big business is demanding? Every Democrat I know does not.
  • If you don’t want more development in the region, if you are for smart growth, or just slow development growth, then you should be voting no on this referendum.

  • Reason Eleven: This is not going to be a fair fight. Big business supporters are going to be outspending the low-tax, smart growth and environmentalist opponents of the referendum by more than 10-to-1.
  • Every forum and media outlet in the state should insist on two-sided debates on the issue, rather than one-sided big business/big government presentations.

  • Reason Twelve: To say that we should have a referendum on increasing taxes, but not on tax cuts or any other issue, is a joke.

Just as supporters of the sales tax referendum have said, we should not be afraid of the voters on this issue. (The voters are about to give them a good whipping on it, in fact.)

We should not be afraid of the voters on other issues as well.

The precedent has been set. Conservatives and liberals should join together and demand that the next Legislature enact the right of initiative and referendum on the full range of issues, as has long been the law in many other states.

 A Citizen Speaks Out
Reprinted email from a concerned citizen, Joseph Barbano, to the Fairfax County Board of Supervisors To : Fairfax Board of Supervisors
From:  Joseph Barbano

Subject: Reject Proposed 2002 Property Tax Assessment Increase
Comments & Justification To Reject Property Tax Increase
During the late 1980s, I owned a $180,000 house in Rockland County, NY (30 miles North of NYC).  Please note that this area is an extremely desirable place to live because of the quality of schools and the beautiful parklands. I paid a whopping $6,000 in property taxes in 1990 because the local taxing authority had no control on spending and services offered to residents.  Schools were overcrowded and residents didn’t apparently care about cutting spending since the times were good in this overly Democrat area. As an example, the county bought new police cars and the locally elected officials paid overpriced rates to negotiate contracts for most services. I was, apparently, the only one concerned about the excessive levels of property taxes and the excessive levels of spending.

Then, in early 1991, the economy in the Metro NYC started to go south.  People desiring to buy houses in Rockland refused to pay the sky-high property tax bills.  Residents desiring to sell their house (such as myself) lost our equity in our houses as market values took a nosedive.

The Rockland County Residents got furious and voted out all the local tax-and-spend lawmakers including the Governor Mario Cuomo.  Residents simply were through with the tax and spend lifestyle that had been ingrained in NY politics for over a half century.

How Does This New York Story Relate to the Tax and Spend Philosophy Present in Fairfax County?
I lived through the property tax nightmare mentioned above in the New York City Metropolitan suburbs. I have worked too hard to build equity in my Fairfax Station house and I don’t plan to lose it again. If we don’t put stiff controls on property tax increases in Fairfax. I will, again, see my equity in my house disappear.

Proposed Action Plan
Hold property tax bills the same as last year and put all the tax money into building new schools and teachers’ salaries.  This is what present and future families want to "buy into" when buying real estate in Fairfax County.  School-related expenditures will "single-handedly" sell your house when you want to sell your house.  Spending on excessive levels of non-educational related services (when property tax rates are excessive) will alienate future Fairfax County homebuyers and prevent current homeowners from maintaining equity in their homes and possibly selling their homes.  This is extremely unfair to the hardworking homeowners in this county who have dearly sacrificed to buy into the nice areas of Fairfax and sends a sobering message to future homebuyers on homeownership in this county.

Establish Strong Budget Controls
The County has to learn to live with limited support from the State.  It is unfair to blame the State for cutbacks in local support and pass this on the homeowners.  The County has to become fiscally responsible and drastically cut back its non-education related expenditures.  This includes salaries and benefits paid to employees, rent and leases on buildings, and expenditures on non-education related services.  Again, the county budget can’t afford these types of expenditures. Expenditures must be at bare-bone levels.  If the State is going to cut Fairfax to the bone, the corresponding local budget must be cut to the bone.

This includes special services related to education.  Spend local tax money on what colleges demand of students: Reading, writing, math, and science.  All other expenditures should be paid by the individual consumer.  Fairfax County does not have the money to support any other type of educational program.

Stop Complaining on Lack of Support from the State
The Fairfax County Government must clean up its excessive spending habits and stop blaming Richmond for all of its fiscal woes. Residents and businesses have been forced to live within budgets without increased funding.

It is about time that Fairfax County set a leadership standard and cease the non-stop bickering with Richmond.  Clean up your own tax-and-spend house and maybe Richmond might start listening!

Where the Money I$

Since 1979 the state budget has grown $8 billion more than was needed to keep up with inflation and population. The pie chart on this page 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.

While schools are lavishly funded, transportation needs a billion more dollars a year, not the $140 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.

The money is already there!

(Everything you wanted to know about taxes and spending, but government won’t tell you.)

  • The current Virginia budget is $8 billion more than needed to cover inflation, population, and school and college enrollment increases over the last twenty years. Virginia is already paying higher taxes. NONE of the extra $8 billion went to transportation.
  • The real cause of the transportation crisis is that Virginia does not spend income taxes on transportation.
  • Also, Virginia spends only 1/2 cent of the 4 1/2 cents sales tax on transportation.
  • In 1986, a 1/2-cent sales tax increase was dedicated to transportation. It solved nothing.
  • Moreover, Governor Warner’s proposed FY2003 budget did not spend that "dedicated" 1/2 cent on transportation.
  • Result: inflation-adjusted per-capita spending on transportation is the same now as it was in 1979.
  • The 1/2-penny increase solves nothing. The Northern Virginia 2020 transportation plan calls for $700 million in new funding each year. The half-penny increase would provide $140 million. However it is intended to float bonds, which use a third of the revenue, leaving only $80 million to offset the $700 million needed.
  • To get the billions, not millions, needed for transportation, allow transportation to compete against schools and welfare for all income tax and sales tax revenues.
  • Moreover, the Northern Virginia 2020 Transportation Plan is flawed. It calls for simultaneous interstate and rail construction. The improved interstates will draw riders from the expensive rail lines, which will require huge subsidies.
  • Also, the 2020 Transportation Plan does not require high-density commercial zoning along suburban rail lines. The result is that reverse-commute trains will be empty, while taxpayers are paying huge subsidies. Also, high-density commercial zoning along suburban rail lines would offer more jobs that do not require long commutes.
  • Do not raise taxes during a recession. The unemployment rate has almost doubled, from 1.9 percent (71,000 unemployed residents) in Dec. 2000 to 3.6 percent to (133,900) as of Dec. 2001 (source VA Employment Commission).

FCTA Sponsored Activism

On Tuesday, April 15, over 100 taxpayer activists met for a luncheon at the Tysons Corner Marriott in order to launch the Virginia chapter of the Club for Growth and galvanize the opposition to "the Great Tax Referendum Mistake." The speakers included:

  • Stephen Moore, president of the National Club for Growth,
  • Grover Norquist, president of Americans for Tax Reform,
  • Pat McSweeney, chairman of the Virginia Conservative Alliance,
  • Michelle Easton, president of the Clare Booth Luce Institute,
  • Peter Ferrara, president of the Virginia Club for Growth, and
  • FCTA president, Arthur Purves.

Also in attendance was Delegate Robert Marshall.

Both print and broadcast media covered the event. So many people attended that there was standing room only.

The speakers predicted that the sales tax referendum would become a classic battle between the grassroots versus the business and bureaucratic elite. The effort to defeat the sales tax increase will be difficult because the elites, led by Governor Warner, are expected to launch an expensive media campaign to convince voters to raise their sales taxes. This may be a tough sell however, once taxpayers feel the sting of the massive increase in real estate assessments and the attendant tax increases.

Peter Ferrara, president of the Virginia Club for Growth and an FCTA 2nd Vice President, believes the referendum will go down to defeat due to a coalescing of anti-tax groups, conservatives, environmentalists, and smart growth activists. Finally, he and Stephen Moore vowed to hold pro-tax legislators accountable on election day and within party primaries if necessary.

-- Bradford Butler

General Assembly 2002 Scorecard
Compiled by John Toivonen — FCTA Lobbyist
Northern Va. DELEGATES

1 2 3 4 5 6 7 8 9 FCTA Score
Black, Richard H. 32nd R Sterling + +

+ + 100
Lingamfelter, L. Scott 31st R Woodbridge + + +

+ + 100
Marshall, Robert G. 13th R Manassas + +

+ 100
Petersen, J. Chapman 37th D Fairfax + +

- - 50
May, Joe T. 33rd R Leesburg - -
- + + - 29
Rollison, John A., III 52nd R Woodbridge - -
- + + - 29
Albo, David 42nd R Springfield - -

+ - 25
Amundson, Kristen J. 44th D Mt. Vernon + -

- - 25
Bolvin, Thomas M. 43rd R Alexandria - -

+ - 25
Brink, Robert H. 48th D Arlington + -

- - 25
Darner, L. Karen 49th D Arlington + -

- - 25
McQuigg, Michèle B. 51st R Woodbridge - -

+ - 25
Moran, Brian J. 46th D Alexandria + -

- - 25
O'Brien, James K., Jr. 40th R Clifton - -

+ - 25
Plum, Kenneth R. 36th D Reston + -

- - 25
Reese, Gary A. 67th R Oak Hill - -

+ - 25
Scott, James M. 53rd D Merrifield + -

- - 25
Almand, James 47th D Arlington + - -

- - 17
Hull, Robert D. 38th D Falls Church + - -

- - 17
Watts, Vivian E. 39th D Annandale + - -

- - 17
Dillard, James H., II 41st R Fairfax + -
- - - - 14
Van Landingham, Marian 45th D Alexandria + -
- - - - 14
Callahan, Vincent F., Jr. 34th R McLean - -
- - - - 0
Devolites, Jeannemarie 35th R Vienna - -

- - 0
Parrish, Harry J. 50th R Manassas - - -

NV - 0
Rust, Thomas Davis 86th R Herndon - -

- - 0

1. HB1296 passes 52-47, half cent sales tax increase for NoVa transportation. FCTA position (+) is "nay".

2. SB170 passes 54-45, income tax hike for schools, sales tax hike for transportation. FCTA position (+) is "nay".
3. Finance Committee Vote on HB1296, voted to report to Appropriations 15-7. FCTA position (+) is "nay".
4. Appropriations Committee Vote on HB1296, voted to report to House Floor 23-2. FCTA position (+) is "nay".
5. Finance Committee Vote on SB170, voted 13-9 to report to Appropriations. FCTA position (+) is "nay".
6. Appropriations Committee Vote on SB170, voted 16-8 to report to House Floor. FCTA position (+) is "nay".
7. Appropriations passes by indefinitely HB1170, 15-10, half -penny for schools, FCTA position (+) is "yea".
8. House votes to adjourn sine die, ending session prior to a vote on SB170. FCTA position (+) is "yea".
9. SB668 passes 67-30, half-penny sales tax increase for transportation. FCTA position (+) is "nay".

Northern Va. SENATORS

1 2 3 4 FCTA Score
Warren E. Barry 37th R Fairfax - - - - 0
Leslie L. Byrne 34th D Falls Church

- - 0
Charles J. Colgan 29th D Manassas - - - - 0
Janet D. Howell 32nd D Reston - - - - 0
William C. Mims 33rd R Leesburg

- - 0
Linda T. Puller 36th D Mount Vernon

- - 0
Richard L. Saslaw 35th D Springfield -
- - 0
Patricia S. Ticer 30th D Alexandria

- - 0
Mary Margaret Whipple 31st D Arlington

- - 0

1. Finance Committee approves 9-7 SB170, statewide 1-penny tax increase for transportation and schools. FCTA position (+) is "nay".

2. Senate Finance votes 9-6 not to report SB178, a 5-cent increase in the gasoline tax. FCTA position (+) is "yea".
3. SB170 passes 32-8, income tax hike for schools, sales tax hike for transportation. FCTA position (+) is "nay".
4. SB668 passes 34-6, half-penny sales tax increase for transportation. FCTA position (+) is "nay".

Any tax rate above $1.06 is a tax hike
Don’t let the Fairfax County supervisors mislead you

~ Excerpts from FCTA Press Release dated March 16, 2002

Arthur G. Purves, president of the Fairfax County Taxpayers Alliance, today stated that to avoid a real estate tax increase the Fairfax County supervisors must reduce the real estate tax rate from $1.23 to $1.06. This reduction is required to offset the 16 percent average increase in residential assessments. "Any real estate tax rate greater than $1.06 is a tax hike," Purves stated.

Taxpayers should know that a cut in the real estate tax rate can still result in a tax increase. For example, if the supervisors cut the tax rate by five cents to $1.18, that would still equate to an 11 percent tax increase. A five cent reduction only partially offsets the increase in assessments. The following table shows the tax increase corresponding to reduced tax rates:

Tax increase arising from reduced real estate tax rates

New Tax Rate

Tax Increase

New Tax Rate

Tax Increase

New Tax Rate

Tax Increase

New Tax Rate

Tax Increase

$1.23 16% $1.18 11% $1.13 7% $1.08 2%
$1.22 15% $1.17 10% $1.12 6% $1.07 1%
$1.21 14% $1.16 9% $1.11 5% $1.06 0%
$1.20 13% $1.15 8% $1.10 4%    
$1.19 12% $1.14 8% $1.09 3%    

"Among the supervisors’ well-kept secrets is that state law requires them to reduce the tax rate to offset the assessment increase," Purves said. If they want a higher rate, the law (Va. Code Section 58.1-3321) requires the supervisors to hold a public hearing and publicly vote to approve the higher rate. The public hearing on the "effective tax rate" is scheduled for 3:30 p.m., Monday, April 8, 2002, at the Government Center. "It is unfortunate that this hearing is held while taxpayers are at work," Purves said.

Keeping the tax rate at $1.23 is a tax increase, due to higher assessments. Since Kate Hanley became county chairman, higher assessments have increased the typical household’s real estate taxes by $900.

Postscript: The Fairfax County Board of Supervisors cut the real estate tax rate by only two cents, to $1.21 per $100 of valuation. Due to higher assessments, this represents an actual tax increase of 14% for the typical homeowner.

 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.

_____Please enroll me as a new member of the Taxpayers Alliance ($15 per family for 12 months)

_____Please renew my membership in FCTA (dues $15 per family for 12 months)

_____Enclosed is a 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. 22030

Telephone__________________________________ 703-642-5567

Email________________________________________________________________ NL2-2003

To receive FCTA press releases, please provide your email address.

Copyright 1999-2009 The Fairfax County Taxpayers Alliance, Inc.
The material at this site may be reproduced in whole or in part only when the
reproduced material includes the FCTA copyright notice and the URL for this site.