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2003 Spring Bulletin

 Legislative audit commission documents, but does not acknowledge, huge budget increases
Public school spending increases ten times faster than enrollment

Starting with the 2001 General Assembly session, the Fairfax County Taxpayers Alliance has hired the only anti-tax lobbyist in Richmond. The FCTA lobbyist has repeatedly publicized graphs showing that since the governorship of Chuck Robb, Virginia state spending has grown much faster than population and inflation.

Now a recent study by the Virginia Joint Legislative Audit and Review Commission (JLARC) confirms the FCTA position.

The report is entitled Review of State Spending: June 2002 Update. It studies Virginia spending trends between 1981 and 2001. The most significant findings, which appear in a table on page 11 of the report, are:

  • State spending for public schools increased ten times faster than public school enrollment;
  • State spending for four-year public colleges increased more than four times faster than enrollment;
  • Medicaid-eligible recipients increased four times faster than overall population;
  • The Medicaid budget increased seven times faster than population;
  • The state’s prison inmate population increased nine times faster than population; and
  • While the mental health institutional daily census decreased by almost two thirds, mental health funding increased by a third.

(Note: All spending increases are adjusted for inflation.)

Transportation spending grew the slowest. While vehicle miles traveled increased three times faster than population, transportation spending increased only slightly faster than population.

However, the JLARC report never suggests that the spending growth it documents is excessive. The report does not explicitly state, for example, that public school spending increased ten times faster than enrollment. It simply presents figures showing that enrollment increased ten percent while inflation-adjusted spending for the Department of Education increased 97 percent.

The report’s major finding is that between 1981 and 2001 Virginia government spending increased faster than population and inflation by an average annual rate of 2.3 percent. The JLARC did not mention though that the 2.3 percent annual spending increase compounded over 20 years is costing the taxpayers an extra $9 billion this year. (See related story in this FCTA Bulletin, "Two Percent: A Lot or a Little?")

Two percent: A lot or a little? (It’s a lot)

Every year school and government administrators and their pro-tax allies among elected officials proclaim a budget crisis to justify higher taxes and fees and to beat back demands for tax cuts,

For example, Virginia Governor Warner has been proclaiming a $6 billion budget shortfall. Fairfax County officials in turn insist that the state shortfall creates a crisis in the Fairfax County budget.

The Fall 2002 FCTA Bulletin showed that the state crisis is not due to a shortage of revenues as proclaimed by Governor Warner. State revenues are near their all-time high. The shortfall is based on overly optimistic revenue projections made during the "dot-com" bubble. The crisis is due to out-of-control spending.

Nevertheless, these annual budget crises are so well orchestrated that the average citizen believes that government revenues and school budgets are not keeping up with population and inflation.

The Fairfax County Taxpayers Alliance has for years been publicizing the truth, which is that state and county revenues and spending are increasing much faster than population, school enrollment, and inflation.

Now there is confirmation from an official Virginia government commission that the FCTA claims about soaring Virginia spending are correct.

The Virginia Joint Legislative Audit and Review Commission’s (JLARC) recent study of Virginia state spending trends between 1981 and 2001 states that after adjusting for population and inflation, the Virginia budget grew at an average annual rate of 2.3 percent.

This finding appears in both the preface and page 1 of the JLARC report, Review of State Spending: June 2002 Update. However, there is no indication in the JLARC report as to whether an annual real growth rate of 2.3 percent is small or large. It seems intuitive that 2.3 percent is small. Is it?

The top line of the following graph, "Growth of Virginia Spending", also appears in a graph on page 2 of the JLARC report and shows the total Virginia budget from 1979 through 2004. (The JLARC graph goes from 1981 to 2001.) The bottom line in the "Growth of Virginia Spending" graph shows how much the Virginia budget had to increase to keep up with population and inflation. State spending growth matched the growth of population and inflation from 1979 until the middle of Governor Chuck Robb’s term. Then during the prosperous Reagan era, state spending took off.

For the current fiscal year (FY2003), Virginia state spending, after all the downward revenue projections due to the collapse of the "dot-com" bubble, is expected to be about $24.4 billion. However, to keep up with population and inflation growth since 1981, the budget only needs to be $15.5 billion, or $8.9 billion less than this year’s budget. (Only one percent of the $8.9 billion went to transportation.)

The JLARC report could have shown the spending growth needed for population and inflation in its graph on page 2 of its report. The JLARC also could have stated that twenty years of spending increases over and above population and inflation are costing the taxpayers an extra $9 billion each year.

However, the JLARC chose to omit this fact.

Nine billion dollars is more money than the state of Virginia collects from corporate and individual income taxes. If state spending had not grown faster than population and inflation, income taxes could have been eliminated.

So state government became bigger. Did it become better? Please see the related article in this FCTA Bulletin, "What services? How Virginia spends its tax dollar."

How the JLARC arrived at its 2.3 percent figure : Between 1984 and 2004 Virginia spending (top line in graph) increased at an average annual rate of 6.8 percent. The average annual increase in population and inflation over the same period (bottom line) was 4.3 percent. Therefore the average annual growth in actual state spending was 2.5 percent more than the growth needed to keep up with population and inflation. Compounded over 20 years, this extra growth is now costing the taxpayers almost $9 billion this year alone. (The 2.5 percent growth rate cited here is based on spending between 1984-2004. The JLARC’s 2.3 percent growth rate is based on spending between 1981 and 2001).

Ray Coggin

The Fairfax County Taxpayers Alliance mourns the untimely passing of Hunter Mill District Director Ray Coggin. Ray had served as director since 1998 and faithfully maintained the membership database. His service, wise counsel, and friendship will be sorely missed. The FCTA extends its sincerest condolences to Ray’s wife and two children.


The article, "Vote ‘NO’ on all bond referenda," in the Fall, 2002, FCTA Bulletin incorrectly stated that 18 cents of the homeowner’s $1.21 tax rate pays for bond interest. It should have stated that the 18 cents pays for debt service on bonds. Of the 18 cents, six cents is for interest. The remaining 12 cents pays for principal. Therefore the real estate tax rate increase resulting from bonds is six cents, to pay for the bond interest.


What services? How Virginia spends its tax dollar

When big-government advocates defend high taxes, they say that the public "demands" quality government services. Does Virginia government provide quality services? It seems that what the taxpayer gets for higher taxes is crowded roads and schools.

Seventy-five Percent for Social Spending

The following pie chart shows the major programs funded by Virginia’s budget this year. Almost 75 percent of the budget is spent on public education (Public Schools and Higher Education), welfare (Individual and Family Services) and law enforcement (Administration of Justice).

The largest program, Individual and Family Services, includes Medicaid, Social Services, and Mental Health and Substance Abuse. Medicaid is the fastest growing program in the Virginia budget.

The "Enterprises" category represents state money-making activities, which primarily include tuition payments to public colleges and hospital fees. Also included are prison money-earning enterprises, the lottery, and the ABC stores.

The cost of local jails, which are funded by the state, and state prisons account for about half of the Administration of Justice program. Also included are the court system and the state police.

Parks, which come under Resources and Economic Development are less than one percent of the budget.

Does government social spending provide quality services?

Public Schools and Economic Opportunity?

As noted elsewhere in this Bulletin, the Virginia Joint Legislative Audit and Review Commission (JLARC) reported that over the past two decades, inflation-adjusted public school spending increased ten times faster than enrollment.

What did this accomplish?

The average SAT score of Virginia public schools is slightly below the national average. The average SAT score of Fairfax County Public Schools, which regards itself as an excellent school system, is at the 65th percentile, a fact that the school system does not publish.

A major role of public schools is to create equal economic opportunity through education. Yet because public schools have failed to close the minority student achievement gap, they are perpetuating economic inequity.

Public schools are anti-rule, anti-drill, and anti-fact. Because phonics-based reading instruction, grammar, and arithmetic are rule-based, public schools resist teaching them. Rules, it is felt, are boring and tedious while education is supposed to be fun. Failure to teach phonics drives up the demand for learning-disabled and speech therapy services, for which schools receive extra funding. Hand calculators and computers supersede math drills. Since history and geography are "just facts" that anyone can look up if needed, schools do not feel it is important to teach these subjects.

College Drop Outs

The JLARC reported that inflation-adjusted spending for Virginia four-year public colleges increased more than four times faster than enrollment over the last twenty years.

There needs to be an accounting for how this massive increase in funding was spent. After this large a funding increase, why was it necessary last November to have a $900 million bond referendum for college construction?

According to studies by the State Council on Higher Education for Virginia (SCHEV):

  • twenty percent of college freshmen in Virginia four-year public colleges drop out;
  • forty percent of freshmen do not graduate within six years; and
  • forty percent of first-year full-time students in Virginia community colleges drop out.

The high dropout rates do affirm that colleges have standards. However, are the standards as high as they were twenty years ago? Also why should the taxpayer subsidize the education of such a large number of students who drop out? Wouldn’t it be better to have higher admission standards and motivate more attention to high school studies?

Welfare Families

Massive welfare spending began in the 60s with President Lyndon Johnson’s "Great Society."

Welfare incentivizes out-of-wedlock births by providing a low-income unwed mother subsidized housing, subsidized food, subsidized childcare, and subsidized Medicaid.

Welfare’s message to the low-income male is that if he fathers a child, he is not needed to provide food, shelter, or medical care for the child or mother. The state will provide it for him.

According to William J. Bennett’s Index of Leading Cultural Indicators - 2001, the percentage of African-American children born out of wedlock has increased from 23 percent in 1960 to 69 percent in 1991. (The increase for white children is from two percent to 27 percent.) Bennett states that the average income of a household headed by a never-married mother is less than one-quarter the average income of two-parent families.

The JLARC states that the state inmate population increased nine times faster than overall population. Bennett points out that seventy-percent of long-term inmates come from fatherless homes.

Despite extensive government-provided affordable housing, there is a chronic shortage of low-income affordable housing.

According to the JLARC, Medicaid is the fastest growing item in the Virginia budget. As Medicaid grows, the health care industry’s economic state is becoming more precarious. It is tempting to regard quality healthcare as a right, but who will provide that right if hospitals go out of business? The JLARC report states that over the past two decades the number of Medicaid-eligible persons increased four times faster than overall population. Two-thirds of Virginia’s Medicaid recipients are welfare mothers. The other third are individuals in nursing homes.

The 21st Century Plantation

There are similarities between today’s welfare state and slavery before the Civil War. Under slavery it was illegal to teach a Black person to read. Just the ability to read, it was thought, could empower a slave to attain independence.

One hundred and forty years later, our public schools are still not teaching low-income children how to read. The minority student achievement gap apparent in high school SAT scores is also apparent in third and fourth grade standardized tests, which primarily measure reading and arithmetic skills. The inability to read traps a person in dependency as much in the information age as it did during slavery before the Civil War.

Also, while slavery broke up families at the auction block, the welfare state breaks up families with the subsidy check. By not teaching reading, schools deprive low-income children of the ability to be independent. Welfare undermines their incentive to be independent and to create families. The result is that so many low-income youth end up in prison that going to jail is no longer a stigma. America is second only to Russia in the percentage of its citizens behind bars.

Government social spending is not a "quality service." It is destructive, and it is expensive. It is the social spending programs that destroy families, drive up taxes, pre-empt tax cuts, and divert revenues from transportation,.

USA TODAY: State spending "overambitious"

Two articles in the Wednesday, January 15, 2003, issue of USA TODAY reported that state spending crises nationwide are not due to low revenues but to rapid spending growth.

The front-page headline article quoted the National Governors Association as saying that states face the "most dire fiscal situation since World War II." Then article then stated, "But a USA TODAY analysis shows that most of the budget cuts being studied are not declines in spending from last year. Instead, they are reductions in spending increases that were approved when the U.S. economy was booming."

The article observed that state and local government spending nationwide has increased without interruption for decades. "It has not fallen since 1944, and it has grown faster than the rate of inflation every year since 1982."

While the private workforce shrank 0.4 percent compared to a year ago, according to the article, the number of state employees increased 0.6 percent. The number of local government employees increased 1.4 percent.

A second article on page 3A, "Costly programs stagger states," said, "State governments are struggling to pay for expensive programs that were approved or expanded during the economic surge of the late 1990s." It continued, "The extra money has gone mostly to the two big items that account for 60 percent of state spending: education and Medicaid health care for the poor."

Between 1997 and 2002, Virginia had the fifth fastest-growing budget of all fifty states.

California’s spending grew the fastest.

COMMENTARY: Uninventing government
"Government is not the solution to our problem. Government is the problem."
  Ronald Reagan

Needed: New Policies

Big government social-spending programs are perpetuating and exacerbating the problems they are supposed to solve. They destroy families and human diginity. However, if government programs do not work, what is the alternative?

What are the non-government solutions for:

  • better schools?
  • ending poverty?
  • affordable housing?
  • affordable medical care?
  • reducing the prison population?

Transition Troubles

Even if non-government solutions were found, transitioning to them would be a challenge. Thousands of government employees have careers in these areas. Finding non-government solutions for these problems would result in many government employees having to switch careers. Assuming that the average government salary, including benefits, is $50,000 a year, then each $100 million reduction in government spending would cost the jobs of 2000 employees. Downsizing government should, as much as possible, be done by normal attrition and turnover and preferably over several years instead of all at once. Governor Warner cut the number of state employees by eliminating 4000 unfilled positions.

Moreover, as damaging as social spending may be, people depend on it for food, shelter, medical care, and childcare. How does government transition them into independence while maintaining their safety net?

Remembering First Principles

Politicians try to cut budgets without changing policies. However, policies drive spending. Cutting taxes requires changing policies.

There are reasons why current government policies do not work.

Capitalism is harsh but productive. To survive, capitalism requires you to produce competitively successful goods or services. However, capitalism allows you to keep all you earn. Government social spending undermines capitalism by rewarding those who do not produce and punishing those who do produce.

Ultimately the only way to guarantee food, shelter, and medical care is for people to earn it. By providing these items for free, welfare creates a downward spiral in which demand increases while the wealth available to pay for the demand decreases.

Government is a monopoly, which especially in elementary and secondary education means it can produce a mediocre product and still stay in business.

Moreover, politicians cater to the National Education Association, not to students. Albert Shanker, president of the American Federation of Teachers between 1974-1994, stated in a remark included in the August 1985 Congressional Record that "when schoolchildren start paying union dues, that’s when I'll start representing the interests of schoolchildren."

For decades, public school funding has increased much faster than enrollment and inflation. Yet test scores are stagnant, salaries are unchanged, and buildings neglected. The principal change is the increase in school staff, which benefits teachers’ unions

You get what you subsidize. Government will never end poverty as long as it continues subsidizing women who have children out of wedlock.

Government-provided welfare is too easily abused. Consider welfare reform, which now provides childcare subsidies instead of paying subsidies to mothers to stay at home with their children. The result is that children are cared for by relatives who then receive the childcare subsidy check and share it with the mother. There is still a financial reward for having children out of wedlock.

Government subsidization of medical care increases paperwork and invites fraud. As Medicare has expanded, the financial footing of healthcare has weakened.

Subsidized housing is unsafe. Communities do not want low-income housing developments nearby. The only hope for safe low-income housing is to build units that individuals earning $10 and hour can rent without a subsidy.

The one truly effective social program, which the government should subsidize, is the stay-at-home mother with a working husband.

These women provide free childcare, education, eldercare, and community policing. They provide supervised activities for youth after-school. They volunteer in schools, libraries, churches, and hospitals.

It is paradoxical that governments tax mothers out of the home in order to pay professionals to provide the services that mothers provide for free.

Ironically, both Fairfax County and Virginia refer to their welfare programs as "Family Services". Only families can provide family services.

Families should be the front-line provider of welfare to family and extended-family members.

The family is the basic economic unit and the basic unit of government. If families did their job, state and local government’s only significant responsibility would be transportation.

Alternatives to Social Spending

The following policies can emancipate both welfare recipients and taxpayers from the tyranny of government social spending.

To earn a living in the information age, people need to read. Because they adamantly eschew phonics-based reading instruction, public schools have failed to teach low income children how to read. The only hope for educating these children is school competition through tax credits for private school tuition and scholarships (and for home schooling).

To rebuild families, government must phase out subsidized food, housing, and medical care for mothers who have children out of wedlock. Mothers with children born before a certain date may be "grandfathered" in, but pregnancies after a certain date would no longer qualify. Low-income women will do what is logical. Right now government has made it logical to have children out of wedlock.

Government needs to withdraw from medical care and let the profession do the "cost shifting" between patients who can pay and cannot pay.

Subsidized housing cannot be phased out until affordable unsubsidized housing is made available. Local governments need to zone and perhaps provide tax breaks for low-cost UNSUBSIDIZED affordable housing with nearby mass transit.

Finally, government’s highest social priority should be to subsidize -- through lower taxes -- the one social program that works: the stay-at-home mother with the working husband.


Government has become a modern-day god. It is believed to be all-wise, all-knowing, and all-powerful. It is believed to have the ability to solve all problems. There is no problem but that some legislator will sponsor a new government program to fix it. Individuals, according to this theology, are incapable of taking care of themselves.

However, decades of experience have shown that this is a false theology. To reduce tax-driving and individual-destroying government social programs, we must repose full confidence in individuals and place upon individuals the responsibility for their personal and family’s welfare. Individuals and private institutions can solve problems better than the government can.

-Arthur G. Purves

The trouble with state spending ranks
Beware when they say, "Virginia ranks 27thth among the 50 states in education spending."

In its report, Review of State Spending: June 2002 Update, the Virginia Joint Legislative Audit and Review Commission (JLARC) compares Virginia spending per resident with all fifty states.

The JLARC found that between 1981 and 1999 Virginia’s rank compared to all states for total state spending per resident (in inflation-adjusted dollars) was unchanged. In 1981 Virginia ranked 36th; in 1999 Virginia still ranked 36th.

However, during the same period Virginia spending per resident, adjusted for inflation, increased 65 percent, from $2089 to $3445.

How is it that Virginia’s rank remained the same while its spending per resident increased 65 percent?

The answer, according to the report, is that "… spending by other states kept pace or even exceeded Virginia’s rates … Thus increases in state spending appear to have been the norm over this period, and Virginia’s spending increases merely served to maintain the State’s position relative to other states" (p. 17).

The average increase for all states was 60 percent, from $2378 per resident to $3819 per resident.

That is the problem with judging a state’s spending by comparing it with other states. Because all states are increasing spending rapidly, spending-rank comparisons conceal large spending increases.

For another example, the JLARC report states (p. 69) that in 1999, Virginia’s public school spending per pupil ranked 27th out of fifty states. Based on this low ranking no one would suspect that Virginia inflation-adjusted spending for public schools increased ten times faster than enrollment and that spending for public colleges increased four times faster than enrollment.

This is another example of taxation by misrepresentation. Advocates of higher taxes avoid comparing this year’s spending with previous years’ spending. Instead, they cite spending ranks, which can conceal large spending increases. Or, like Virginia Governor Warner, they compare this year’s spending with overly optimistic spending projections.

Officers of the Fairfax County Taxpayers Alliance

President: Arthur G. Purves
First Vice President: Connie Bedell
Second Vice President: Peter Ferrara
Treasurer: Kent Webber
Secretary Perry Young

At-Large Directors

Kent Webber
Perry Young
Howie Lind
Phil Rodokanakis
Jim Crumley
Sam Kanaga
Tom Barthelemy
Mark Jesten
Chuck McAndrew

District Directors

Braddock: David C.F. Ray
Dranesville: vacant
Hunter Mill: David Swink
Lee: Jeff Dircksen
Mason: Warren Hill
Mount Vernon: vacant
Providence: Marie Schumacher
Springfield: Bradford Butler
Sully: Jim Parmelee

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