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2004 Spring Bulletin

 Teachers union launches all-out attack on Virginia taxpayers
 Virginia Education Association attempts $1 billion tax grab

What’s happening in Richmond?

As this is written, the Virginia General Assembly is meeting in an extended session ordered by the Governor because the Assembly has not yet carried out its constitutional responsibility to approve a biennial budget for the next two years (FY2005 and FY2006).

Specifically, the General Assembly cannot compromise on three proposed budgets, each of which proposes a massive tax increase for the biennium:

  • Republicans who control the House of Delegates propose a $1/2 billion increase by eliminating sales tax exemptions for major businesses.
  • Democrats, through Virginia Governor Mark R. Warner, propose a $1 billion tax hike, primarily by raising the Virginia sales tax from 4.5 percent to 5.5 percent.
  • Republicans who control the state Senate now propose a $2 billion tax increase by also raising the sales tax as well as the recordation tax, titling tax, fuels tax, motor vehicle registration fees, and motor vehicle rental taxes.

These tax increases are in addition to an extra $1.8 billion in new revenues available to the state without any tax increases.

Not for transportation

These three tax increase proposals have two features in common. First, they provide no new money for transportation.

Governor Warner’s $1B proposal promises to only stop raiding the transportation fund for non-transportation purposes. This would have been believable, perhaps, if a constitutional amendment were enacted to safeguard the so-called Transportation Trust Fund.

However, the state Senate Finance Committee defeated a resolution (SJ18) for such an amendment on a tie vote, with most senate Republicans voting against the measure and all Democrats supporting it. Republicans opposing the measure were Senators Chichester, Hanger, Potts, Quayle, Stosch, Wampler, and Watkins.

The House Republicans’ $1/2B increase continues raiding nearly $200M of insurance premium taxes that had been earmarked for transportation.

The Senate Republicans’ proposal was initially a $3.6B tax hike of which $1.6B was for transportation. However, at the beginning of the extended session, the Senate Republicans dropped their $1.6B transportation initiative.

Mainly for public schools

The second feature that the three tax hikes have in common is that the program getting the biggest spending increase is public schools. Governor Warner’s $1B tax hike increases public school spending by $722M. The House Republicans boast that they increase public school spending by even more, $810M.

The Senate Republicans’ $2B tax hike increases public school spending by $983M more than Governor Warner’s $722M increase.

So while the Senate Republicans increase transportation spending by zero, they increase public school spending by $1.7B. They also increase spending on higher education by $200 million more than Governor Warner.

Never enough

The table below is taken from the Review of State Spending: December 2003 Update, published by the Virginia Joint Legislative Audit and Review Commission (JLARC), page 9. It compares, between 1981 and 2002, the inflation-adjusted increase in spending for major state programs with the corresponding increase in the population served. Over that period, public school enrollment increased 12 percent. However state funding for public schools increased 105 percent. (See second entry, "Department of Education Budget.")

In other words, inflation-adjusted state spending for public schools increased almost nine times faster than enrollment.

Similarly, inflation-adjusted budgets of Virginia four-year public colleges and universities increased over three times faster than enrollment (105 percent vs. 29 percent). (See fourth entry, "4-Year Public College & University Budgets.")

While education spending soared, transportation spending languished. Toward the bottom of the table it is found that the Department of Transportation budget (VDOT) increased less than half as fast as the vehicle-miles traveled on Virginia roads (38 percent vs. 96 percent).

The House and the Governor increase public school spending about nine percent per year, and the Senate much more. To keep up with enrollment and inflation public school spending needs to increase about three percent per year. Why are the Governor and the General Assembly increasing education spending three times faster than enrollment and inflation while neglecting transportation?

Enter the VEA

The short answer is the Virginia Education Association (VEA), which is putting tremendous pressure on the government to increase school spending. To do so, the VEA created a front group called the Alliance for Virginia’s Students (www.vastudents.org). Co-sponsors of this front group include the Virginia PTA, Association of School Superintendents, Association of Elementary School Principals, Association of Secondary School Principals, Middle School Association, School Counselors Association, Virginia School Boards Association, Virginia Association of Counties, and the Virginia Municipal League.

Prior to the start of the current General Assembly, the VEA successfully pressured most delegates and state senators to sign a pledge "… to support and work for additional state dollars …" for schools. The VEA mailed glossy brochures statewide, organized a 700-person rally on the state capitol grounds, and generates emails to the General Assembly. It is difficult for grass-roots activists to compete with the union-funded lobbying of the VEA and its sister organizations.

Misleading numbers

To justify its $1 billion tax grab, the VEA argues that Virginia ranks 13th in the nation in per-capita income but 44th in state government funding for schools based on that income. What the VEA does not acknowledge is that Virginia ranks 22nd in the nation in per-student spending for public schools (See U.S. Census Bureau report, Public Education Finances 2001, issued March 2003.)

Also, the VEA does not acknowledge the JLARC finding, cited above, that inflation-adjusted state spending for public schools has been increasing nine times faster than enrollment. Other states have also dramatically increased public school spending, which is why Virginia does not rank first after such a large spending increase.

The VEA also argues that local real estate taxes are high because the state is not paying enough for schools. However both local and state governments get their revenues from the same taxpayers. Furthermore, if the VEA gets its way both state and local taxes will increase.

No incentive to teach

The VEA tries to justify soaring school spending by citing the increasing number of special needs students. A major reason there are so many special needs students is that schools do not use phonics-based reading instruction. Children who cannot read have special needs, and schools can demand more money if they can identify more special needs students. The schools therefore have a conflict of interest: poor teaching means more money.

Misleading statements in Governor Warner's
State of the Commonwealth address (January 14, 2004)

Governor Warner: "Some will say we should cut spending. I agree, and we have done so. … We have closed the largest budget shortfall in Virginia's history - more than $6 billion."

Fact: Spending is up by $2.5 billion, not down by $6 billion. Since Governor Warner took office in January, 2002, state spending has increased by $2.5 billion, from $23.5 billion in FY2002 to $26 billion in FY2004. Governor Warner had wanted to increase FY2004 spending by $4.5 billion instead of $2.5 billion. He also wanted to spend an extra $2 billion in FY2002 and FY2003. Since 1998 Virginia spending has increased by $4 billion more than needed to keep up with population growth and inflation.

Governor Warner: "We have reduced state agency spending by 20% on average. We have eliminated more than 50 agencies, boards, and commissions - and thousands of positions in state government."

Fact: Governor Warner reduced the number of state employees by three percent, far less than the 20 percent reduction he cites. Most of the positions he had cut are restored in his proposed budget. Salaries for state government positions account for only about a third of the state budget. Overall spending increased.

Governor Warner: "Doing nothing means the state will continue to pass the buck to local governments who will have to raise property taxes - and that just isn't fair."

Fact: Either way, taxpayers will have higher taxes, either higher state income and sales taxes or higher local real estate taxes. What is more likely is that local taxes will still increase even if state taxes increase. The only way to cut taxes is to cut wasteful spending.

Governor Warner: "In education, 100,000 more students will enroll in our public schools by 2010."

Fact: What this statement overlooks is that public school spending has been increasing much faster than enrollment. According to the Virginia Joint Legislative Audit and Review Commission’s report, Review of State Spending: December 2003 Update. Virginia inflation-adjusted spending for public schools has been increasing nine times faster than enrollment. If inflation is included, public school spending has increased nearly twenty times faster than enrollment.

Areas of waste in public schools include the failure to teach phonics-based reading instruction. This failure perpetuates the minority student achievement gap. It also results in many children being unnecessarily stigmatized as "learning disabled", when in fact they simply were not taught properly. Public schools have a conflict of interest in that the more special needs and learning disabled children they can identify, the more money they can demand.

Another area is guidance counselors, social workers, and psychologists. Since the advent of elementary school guidance counselors in the late 80s the number of Fairfax County Public Schools students recommended for expulsion has increased 100 times faster than enrollment (2300 percent compared to 26 percent). Counseling programs are not working. Virginia should instead address the real causes of deteriorating behavior such as Hollywood, the destructive influence of welfare on families, the pressure put on mothers to choose careers over children, and the schools’ so-called "progressive" curriculum.

Other areas of public school waste are excessive use of computers, excessive administration, and magnet programs that would not be needed if the there were a better curriculum in the regular classroom. The only way to improve public schools is through school choice.

Governor Warner: "In higher education, 61,000 more students will seek to enroll in our colleges and universities during this decade - at the same time that tuition is rising …"

Fact: Again, the governor does not acknowledge that college spending has been increasing much faster than enrollment. According to the JLARC report cited above, inflation-adjusted budgets for Virginia four-year public colleges have been increasing more than three times faster than enrollment. Also only 65 percent of freshmen at these colleges graduate within six years.

Governor Warner: "For example, our Medicaid program is among the leanest in the nation. And yet, two out of every three patients in Virginia's nursing homes now depend on Medicaid."

Fact: Regarding nursing homes, today only half as many of the elderly live with their children compared to fifty years ago. The elderly cannot be cared for at home when higher taxes drive both husband and wife into the workforce. Also, Medicaid spends $1 billion on welfare families. Welfare, by giving unmarried mothers subsidized medical care (Medicaid), housing, food, and childcare has created an incentive for out-of-wedlock births. Since massive welfare spending began in the 60s under Lyndon Johnson’s Great Society, the percentage of American children born out of wedlock has increased from seven percent to 33 percent. Welfare reform has not reduced the out-of-wedlock birthrate. Single-parent children are at high risk for poverty, academic failure, poor health, and crime. Welfare has devastated African-American families: Two-thirds of African-American children are now born out of wedlock.

Governor Warner: "In corrections, our prisons and jails are already seriously over-crowded, due to parole abolition and tougher sentencing. More inmates require more space."

Fact: The Governor is glossing over the rapid increase in the prison population. According to the JLARC report cited above, Virginia’s prison population has increased during the last two decades almost ten times faster than population growth (318 percent vs. 34 percent). This may be due family breakdown caused by welfare. A child born out of wedlock is three times more likely to commit crime than a child born to married parents. According to the Heritage Foundation, Wisconsin, the only state to have investigated the connection between family background and incarceration rates, found that "teenagers of always-single-parent families are 22 times more likely to end up in jail than are those from two parent families" (Heritage Foundation, Issues: 2002, p 172). The high incarceration rate of African-American males is probably due to the destruction of African-American families brought on by welfare. Nationwide, one out of three African-American males goes to prison, compared to one out of 17 whites. However, if these statistics are adjusted for family structure there is no difference between African-American and white incarceration rates.

Governor Warner: "Our budget increases transportation funding by $392 million."

Fact: When he presented his tax hikes to the Fairfax County Chamber of Commerce, the Governor stated explicitly that there was no new money for transportation. Rather what he is pledging is to stop raiding funds already earmarked for transportation, which he has apparently been doing during the last two years. Experience suggests that he will not keep his word unless there is a constitutional amendment preventing raids on the transportation "trust" fund. On Feb. 11, the senate finance committee defeated such an amendment (SJR 18) on a tie vote.

The reason for the transportation crisis is that no income taxes are spent on transportation. Income taxes are reserved for education and welfare. The result, as reported in the JLARC report, is that while public school and public college spending have increased much faster than enrollment, transportation spending is barely keeping up with population growth. What is required to fix the Virginia budget’s "structural imbalance" is to allow transportation to compete against wasteful education and welfare programs for income tax revenues.

Governor Warner: "Together, we won passage of a bond package to upgrade our state parks, colleges, and universities."

Fact: According to the Virginia Campground Association, of the three million dollars raised for the pro-bond glossy mailers, $2.3 million came from the construction industry, real estate and land speculators who stood to profit from the bonds. The VCA bases this statistic on information from the Virginia Public Access Project.

Governor Warner: "Finally, our budget and tax reform plan preserves our fiscal integrity and protects our AAA bond rating."

Fact: Virginia’s bond rating is at risk due to excessive bond sales. Ten years ago, revenues from Virginia bond sales were four times larger than the debt service paid on the bonds. Now bond-sale revenues are about the same as debt service costs. New bonds should not be sold until all old bonds have been paid off. However, Virginia is selling bonds every year.

Governor Warner: "To me, it just doesn't make any sense that someone earning only $17,000 a year in Virginia should pay the same tax rate as someone earning $500,000 a year."

Fact: However, the Governor’s plan has those making $17,000 per year paying the same higher sales tax as those earning $500,000 per year.

Governor Warner is not reforming taxes. He and Senator John Chichester are trying to raise taxes to subsidize harmful, out-of-control spending. They are raising taxes for insensitive government programs that perpetuate class differences, unnecessarily stigmatize children as "learning disabled", foster unsafe schools, destroy families, and multiply the number of felons.

Virginia would have better schools, stronger families, and less crime, if taxes were lowered, welfare and entitlements phased out, and massive public school spending supplanted by school choice.

Visit www.governor.virginia.gov/Press_Policy/EventsandSpeeches/2004/StateoftheCommonwealth2004.htm

I will NOT raise taxes." October 10, 2001 — Candidate Mark Warner

What I believe the people of Virginia want is they want people who will keep their promises."
March 25, 2003 — Governor Mark Warner

You can always count on me to support . . . smaller government [and] lower taxes."
May 9, 2003 — State Senator Chichester, quoted by The Richmond Times Dispatch

FCTA in the NEWS!

~ The following is an editorial appearing in the Washington Times, December 2, 2003 ~

Mark Warner’s Fixation

I will not raise taxes! I will not raise taxes! I will not raise taxes!" That quote, courtesy of the Richmond Times-Dispatch, was Mark Warner, speaking on Jan. 24, 2001. "Let me set the record straight: I will not raise taxes." That was Mr. Warner in a television commercial nine months later, as his campaign for governor entered the home stretch. Once Mr. Warner was elected governor the following month, however, everything changed. The governor spent virtually all of last year campaigning in favor of referendums that would have increased sales taxes to pay for transportation projects in Northern Virginia and Tidewater. In the end, all he received for his efforts were a pair of humiliating political setbacks. But the governor is not one to give up easily.

For months, the worst-kept political secret in Virginia was the governor's desire to push some kind of tax increase package through the General Assembly in the name of reform. Last week, he released many of the specifics of his tax plan. While it contains some positive points, it is laden with provisions that redistribute the tax burden in ways that make the "rich" pay more. Unfortunately, his plan does nothing to deal with the crux of the problem: state spending that continues to balloon. Still, it's a smart political strategy. By announcing it and lobbying for passage right after the election, Mr. Warner gave legislators the maximum time possible before they have to face the voters.

Mr. Warner proposes: increasing the sales tax from 4.5 percent to 5.5 percent; increasing the state cigarette tax, now 2.5 cents per pack, by 25 cents; and allowing counties to impose a local tax on tobacco of up to 50 cents.

On the positive side, Mr. Warner says he has decided not to propose extending sales taxes to cover services. He also proposes reducing the sales tax on groceries from 4 percent to 2.5 percent; phasing out the hated car tax by 2008; increasing the personal exemption for individuals and married couples; and abolishing the estate tax for working farms and family-owned businesses.

In addition to the sales and cigarette tax increases, the Warner plan contains other troubling features. Currently, all taxpayers pay an income tax of 5.75 percent. The governor wants to create a new 6.25 percent bracket for taxable incomes of more than $100,000. While such a backdoor tax increase proposal faces tough sledding in the House of Delegates, where Speaker William Howell and most Republican members are deeply skeptical of tax increases, the same can't be said of the Senate, where lawmakers like Finance Committee Chairman John Chichester may well try to increase sales taxes or delay a phaseout of the car tax.

Unfortunately, the governor's (and some Republicans') fixation with increasing taxes causes them to ignore the need to control spending. Statistics compiled by the Fairfax County Taxpayers Alliance, for example, show that, from fiscal year 1997 through fiscal year 2004, spending would have needed to increase from $17.1 billion to $21.7 billion to keep up with inflation and population growth. Instead, Virginia is expected to spend $26 billion next year. It's time for Mr. Warner to stop fixating on redistributing the tax burden and take a serious look at ways to rein in spending. (Emphasis added.)

(c) 2003 The Washington Times

FCTA General Assembly 2004 Scorecard
Fairfax County Delegation

See also FCTA Statewide 2004 General Assembly Scorecard
Best score is 100; worst score is 0.
"+" indicates vote for FCTA position. "-" indicates vote against FCTA position.
Passed By Indefinitely (PBI) defeats a bill
"A" - absent; "NV" - note voting
Dist. Delegate Party HB1001 HB60 HB1081 HB4 HB1298 HB1488 SB465 SB635 HB30 SB643 FCTA Score
42 Albo, David B. R NV

+ + -

44 Amundson, Kristen J. D -

- - +

34 Callahan, Vincent F., Jr. R -

+ + -

41 Dillard, James H., II R -

NV + -

49 Ebbin, Adam P. D -

- - +

40 Hugo, Timothy D. R - + + + + + + + + + 90
38 Hull, Robert D. D - - - - - + - - + NV 22
46 Moran, Brian J. D -

- - +

37 Petersen, J. Chapman D -

- - -

36 Plum, Kenneth R. D -

- - +

67 Reese, Gary A. R -

+ + -

86 Rust, Thomas Davis R -

+ + -

53 Scott, James M. D -

- - -

35 Shannon, Stephen C. D - + A + - + - + + - 50
43 Sickles, Mark D. D -

+ - A

45 Van Landingham, Marian D -

- - +

39 Watts, Vivian E. D - - - - - + - - + - 20
(1/29/04) HB1001: Hugo bill to raise hotel taxes 2 percent for Economic Development Authority and a convention center - Passed on House floor, 77-21 FCTA position is to vote against passage.
(2/04/04) HB 60: Increase gas tax by 6.5 cents per gallon - Finance Committee Passed By Indefinitely, 17-5. FCTA position is to vote for PBI.
(2/04/04) HB 1081: Governor's tax bill to raise taxes by $1 billion - Finance Committee Passed By Indefinitely, 13-7. FCTA position is to vote for PBI.
(2/10/04) HB 4: Estate tax elimination - Passed on House Floor, 69-29. FCTA position is to vote for passage.
(2/17/04) HB 1298: Reese bill to fund gov't without tax hikes - Passed on House floor, 62-38. FCTA position is to vote for passage. Ignored by Senate Finance Committee.
(2/17/04) HB 1488: House sales tax exemption elimination - Passed on House floor, 61-35. FCTA position is to vote against passage.
(2/25/04) SB 465: Increase cigarette tax from 2.5 to 35 cents per pack - House Finance Committee Passed By Indefinitely, 17-5. FCTA position is to vote for PBI.
(2/25/04) SB 635: Chichester tax bill increasing taxes and fees by nearly $4 billion - House Finance Committee Passed By Indefinitely, 16-6. FCTA position is to vote for PBI.
(2/26/04) HB 30: House budget bill that increases taxes by $1/2 billion - Passed on House floor, 65-35. FCTA position is to vote against passage.
(3/01/04) SB 643: Saslaw bill to raise Fairfax County meals tax without a referendum - Finance Committee PBI 14-5. FCTA position is to vote for PBI.

Senator Party HB1001 SB643 SJ18 SB465 SB635 FCTA Score
Cuccinelli, Ken R + +
+ + 100
Devolites, Jeannemarie R - +
- + 50
Howell, Janet D. D - - + - - 20
Mims, Bill R - +
- - 25
O’Brien, Jay R + +
+ + 100
Puller, Linda T. D - -
- - 0
Saslaw, Richard L. D - - + - - 20
Ticer, Patricia S. D - -
- - 0
Whipple, Mary Margaret D - -
- - 0
(2/05/04) HB1001: Hugo bill to raise hotel taxes 2 percent for Economic Development Authority and a convention center. Passed on Senate floor, 35-4. FCTA position is to vote against passage.
(2/11/04) SB 643: Saslaw bill to raise Fairfax County meals tax without a referendum - Passed on Senate floor, 28-11. FCTA position is to vote against passage.
(2/11/04) SJ18: Janet Howell resolution for a constitutional amendment to protect Transportation Trust Fund from transfers to non-transportation funds. Defeated in Senate Finance Committee 7-7. FCTA position is to vote for passage.
(2/20/04) SB 465: Increase cigarette tax from 2.5 to 35 cents per pack - Passed on Senate floor, 26-12. FCTA position is to vote against passage.
(2/20/04) SB 635: Chichester tax bill increasing taxes and fees by nearly $4 billion - Passed on Senate floor, 27-12. FCTA position is to vote against passage.

Have you renewed your membership for 2004? Please renew if the date on your mailing label is before April 1, 2004.

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, write citizens committees, disseminate voting records of elected officials, write 'op-ed' articles and letters to newspaper editors, provide speakers to citizens groups and analyze and disseminate information on budgets, taxes and borrowing.

To accomplish our goals 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/or contribution. We thank you for your past and continued support.

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

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

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Name(s)____________________________________ Mail To: The Fairfax County Taxpayers Alliance

Address___________________________________ P.O. Box 356

City/State/Zip_______________________________ Fairfax, Va. 22030

Telephone__________________________________ 703-642-5567 NL1-2004


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A Citizen Speaks Out

~ Reprinted email from a concerned citizen, Paul Bjarnason, to his State Delegate and State Senator in Richmond

To : Mssrs. Hull and Saslaw
From:  Paul Bjarnson

Subject: No Tax Increases

Dear Mssrs. Hull and Saslaw —

As your constituent I want to register my stern objection to the package of tax increases that is on the verge of being signed into law. I had always been satisfied with the way Virginia has handled its finances in the past, but I am now changing my mind. My spouse and I are retired and on fixed incomes. Our retirement income went up about 1 percent last year (a so-called cost of living increase), while our true costs of living are going up much faster. Now the tax increases will just make matters worse. The government should learn to spend within its own means, as we taxpayers must do. Actually, the state has it much better than we taxpayers on fixed incomes. This is because most taxes have built-in raises, because they are based upon percentages of things like income, purchase prices or property values.

In the last elections, the voters spoke loud and clear about tax increases. It is obvious that the government has little regard for the views of the majority of taxpayers!

Best regards.

Paul Bjarnason
Annandale, Virginia

Fairfax County Taxpayers Alliance and

Taxpayer Rally
Protest out-of-control taxes!
Monday, March 29, 6:30—7:30 p.m.
in front of the Fairfax County Government Center
Just before the Board of Supervisors 7:30 p.m. Budget Public Hearing
12000 Government Center Pkwy Fairfax VA 22035
(near Fair Oaks Mall)
Join us if you are tired of …
- double-digit annual real estate tax increases (up 70 percent in five years)
- tax hikes that don’t fix anything
- politicians who repeatedly raise taxes and then say they don’t have enough money
- politicians who say they need more taxing authority in order to cut taxes
- higher taxes for crowded roads and mediocre schools