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2003 Fall Bulletin

 Stop Taxation by Misrepresentation

The pro-tax forces' mantra is that in Fiscal Year 2002, Virginia Governor Mark R. Warner and the Virginia General Assembly faced a "$6 billion budget shortfall." This alleged shortfall is the basis for demanding tax increases in the name of tax reform, more taxes for education, and more local taxes.

The phrase "$6 billion shortfall" suggests that the state budget decreased by $6 billion after FY2001. However, as the above graph shows, since FY2001 the Virginia budget did not decrease by $6 billion. It increased by almost $3 billion, from $23.3 billion to $26 billion this year.

In fact, since the start of the "dot-com" bubble in FY1998, the Virginia state budget has grown by $4 billion more than needed to keep up with population and inflation. The "shortfall" really refers to the absence of a budget increase between FY2001 and FY2002. However those who insist that there is a budget shortfall do not acknowledge the dramatic and unsustainable increase in state spending in FY1999, FY2000, and FY2001.

Frequently-heard misleading statements about schools and taxes in Fairfax County and Virginia

Fairfax County

  1. The school budget was cut $80 million in the last three years.
  2. In his cover letter to the proposed school budget last January, Fairfax County Public Schools (FCPS) Superintendent, Dr. Daniel A. Domenech, wrote that the school budget "… has been cut, totaling $80.5 million in the past three years alone." In fact, over the previous three years the school budget had increased $300 million. What had been cut were the Superintendent's budget requests. However, in his letter to the County, the Superintendent stated that the budget had been cut, not his budget requests.

  3. School enrollment continues to outpace available revenue.
  4. In the same letter, the Superintendent of Schools also stated, "Student membership continues to outpace available revenue." This is false. Every year he has been superintendent, per-student spending has increased, even after adjusting for inflation. School staff has increased twice as fast as enrollment, even while the School Board voted to increase class size two years ago. School spending is at an all-time high, even after adjusting for the growth in enrollment and inflation. The school system drives the real estate tax increases.

  5. Ninety-three percent of second graders now read at or above grade level.
  6. Then why do third-grade nationally-normed Stanford 9 standardized test scores show a thirty-point gap between the reading levels of White and African-American children?

    The answer may lie with the different "Developmental Reading Assessment" test the schools use to gauge first- and second-grade reading skills. It is not a nationally-normed test, and children are allowed to miss one word out of ten. Also, since the test does not check phonics skills, you cannot tell if children can sound the words out or if they are memorizing them. Children can memorize words up to a fifth grade reading vocabulary. After that they have to be able to sound words in order to remember them.

  7. Student achievement is at a record high
  8. Fairfax Public Schools SAT scores did increase

    14 points last year, perhaps the largest one-year increase ever. However, the increase is still small compared to the 1200-point scale, and Fairfax County's average SAT score remains at the 65th percentile, only 15 points above the national average.

    Moreover, past increases in SAT scores have correlated with decreases in the percentage of students taking the SATs. Curiously, in 2001 the school system stopped reporting the percentage of students taking SATs. That percentage had peaked at 89 percent in 1997 and had dropped to 81 percent when the school system stopped reporting percentages. Fairfax County is the only suburban Washington D.C. public school system that does not report the percentage of its students taking the SATs.

  9. Ninety percent of Fairfax County Public Schools' graduates go on to post-secondary education.
  10. What the school administration does not say is that only fifty percent of its graduates will complete college.

    Seventy percent of FCPS graduates attend four-year colleges. However the State Council of Higher Education in Virginia (SCHEV) reports that only 65 percent of freshmen at Virginia's four-year colleges graduate within six years. Thirty-five percent do not.

    Twenty percent of FCPS graduates attend two-year colleges. However, Northern Virginia Community College reports that only ten percent of FCPS graduates attain a two-year Associate's degree within three years of starting community college.

  11. Incumbent supervisors have cut real estate taxes
  12. This refers to liberalizing tax breaks given to some senior citizens. However, real estate taxes for the typical Fairfax County household increased more in the last four years than they did in the previous two decades.


  1. Virginia is having a budget crisis.
  2. See the front page of this Bulletin. The Virginia budget crisis is due to excessive revenues during the "dot-com" boom, not a shortage of revenues. Government made a mistake and assumed that the large revenue increases during the boom would continue indefinitely, so it increased spending in recurring programs. When the boom ended and revenues returned to normal, the state was over-extended. There would have been no crisis if state-spending increases had been limited to the growth of population and inflation.

  3. The state is not paying its fair share for the cost of public schools
  4. Under the Virginia Constitution, state and local government are supposed to share the cost of public schools. The state's share is based on the state's Standards of Quality (SOQ). The Joint Legislative Audit and Review Commission has done studies showing that the state is underfunding its share of the SOQs and that local governments are having to pay extra. Therefore, the school lobby is saying the state should pay more to give local governments some relief. The problem with this is that state and local governments both get their revenue from the same taxpayers. The underfunding of the SOQs is a disingenuous argument to raise state taxes while not lowering local taxes.

  5. The state underfunds public education.
  6. As reported in the fall issue of this Bulletin, the state's Joint Legislative Audit and Review Commission (JLARC) documented in its "Review of State Spending: June 2002 Update" that between 1981 and 1997 state inflation-adjusted spending for public schools has increased nine times faster than enrollment. The same report also stated that inflation-adjusted budgets of Virginia's four-year public colleges had increased four times faster than enrollment

    At a forum at South Lakes High School, FCTA president Arthur G. Purves recently faced off with Senator Janet Howell and Delegate Ken Plum. Both Howell and Plum were favoring higher taxes for schools. Mr. Purves countered with the JLARC statistics just cited and added that there had been no accountability for the dramatic increases in public school and public college spending. Senator Howell and Delegate Plum had no answer.

  7. Opponents of new taxes have never offered a solution for transportation funding
  8. The FCTA has repeatedly stated that there are three parts to the transportation solution. First the areas along the Metrorail lines must be zoned for high-density commercial and residential development. This has not happened in Fairfax County. The result is that we have a rail system that runs at half capacity while the roads adjacent to it are the third most congested in the nation. The rail system is also facing a crisis in its maintenance budget.

    Second, the state must start funding transportation from state income taxes and more of the existing sales taxes. Currently all income taxes and ninety percent of sales taxes are off limits to transportation and are monopolized by public education and welfare, whose budgets have grown many times faster than enrollment and population. Meanwhile transportation spending has barely kept up with population but not with vehicle-miles traveled. If education and welfare spending had to compete with transportation for the same slice of the pie, there would be less wasteful social spending and more transportation infrastructure.

    Third, local government has treated transportation as Richmond's responsibility and refuses to spend real estate and other local taxes on transportation. As with state income and sales taxes, at the local level public education and welfare also monopolize real estate and personal property taxes. Social spenders should have to compete against transportation for local funding too.

  9. Virginia tax structure needs to be reformed
  10. Yes, but because the current tax structure gives government too much revenue, not too little. Tax revenues should be generally limited to the growth of population and inflation.