Madam Chairman and Members of the Board:

My name is Arthur Purves. I'm speaking as president of the Fairfax County Taxpayers Alliance. We oppose the proposed $87 million bond referendum for parks and the $100 million bond referendum for public safety. Annual capital costs should be paid for from operating budgets. Here are our concerns.

First, since 1995 the County's debt service has exceeded the funds raised from bond sales by $90 million. If the County had paid for capital projects out of its operating budget, it would have saved $90 million in the last four years, enough to fund the parks referendum. The County is like a homeowner that makes a yearly mortgage payment of $460,000 for a $450,000 mortgage. The County is in this situation because by having annual bond sales it is, in effect, buying a new mortgage every year. Annual expenses should not be funded through borrowing.

Second, it appears that the County is underfunding its capital needs. We are told that there is a $300 million backlog in storm drainage projects, a $40 million backlog in County construction and maintenance projects, and an undetermined backlog in transportation projects. Metro apparently has a $1 billion maintenance backlog, of which Fairfax County has a share.

The school system has a $400 million backlog that is growing. The County Council of PTAs 1998 budget statement reports that the school system's Capital Improvement Plan, which is underfunded by $100 million, renews only half as many schools as is required.

Bond sales are not providing nearly enough funds to meet the County's capital needs.

Third, due to tax increases during the 80s, the County collects $900 million more per year than it would have if taxes and spending had not increased faster than population and inflation since 1975. Of this, $600 million goes to the schools and $300 million to the County government. Given this large increase in revenue, why is it even necessary to sell bonds and why does a capital construction backlog even exist?

Last summer, the Fairfax County Taxpayers Alliance asked both the School Board and the Board of Supervisors where the tax increases had been spent. The School Board's response listed all programs that had grown faster than inflation and enrollment and the FY98 cost of each. The Board of Supervisors response had an incomplete list of programs that had grown faster than population and inflation and failed to provide the cost of even the programs that were mentioned.

Both the School Board's and the Board of Supervisors responses are posted on the FCTA website, www.fcta.org.

The school's share was spent not on capital needs but on the operating budget. Despite the extra money, standardized test scores did not improve and student behavior deteriorated. This happened because the school administration implemented programs without setting measurable goals for them.

Since the schools are not spending their extra $600 million a year wisely, the Board of Supervisors should stop selling bonds for school projects and should require the school system to fund all of its capital needs out of the school operating budget. That would require only $200 million of the $600 million.

Since the Board of Supervisors does not tell how it spends the $335 million of tax increases that the County government gets each year, the Taxpayers Alliance had to do its own analysis to get an estimate. We found that 75% of the tax increases are spent in three areas: $43 million on County debt service, which we've already discussed; $84 million on public safety, and $159 million on health and welfare. Employee benefits accounts for over $50 million of the $335 million. We found that the cost of fringe benefits per employee increased 70% since 1975, from $5800 per year to $10,000 per year (in inflation adjusted 1998 dollars).

While we have an idea of where the tax increases are spent, we still do not know why the increases occurred. We don't know, for example, why the cost of fringe benefits increased.

The Social Services and Health Departments received an extra $43 million. Transfers to the Community Services Board increased by $48 million. The Facilities Management Division received $9 million. The Office for Children received an extra $26 million. The sheriff's office received an extra $22 million and the police an extra $14 million.

Computer spending, which was not reported as a separate item in 1975 now costs about $27 million. About $10 million of this is offset by reductions in other County administrative functions. Overall, computer spending appears to have increased net administrative costs by $17 million.

Spending on transportation appears to account for only $20 million of the $335 million.

Again, these are Taxpayer Alliance estimates. We would prefer to cite official County figures, but if they exist, the Board of Supervisors will not release them to the public. And again, we do not know why these increases occurred. Since taxes and spending began escalating in the late 70s, the County has spent $3 billion more than was needed to keep up with population growth and inflation. It concerns us that the County feels it can spend an extra $3 billion, not report to the taxpayers where the $3 billion was spent, and then ask approval for $187 million in new bonds.

In conclusion, we believe that the County is not justified in asking for voter approval of the $187 million bond referenda next November. We believe that the County should first explain why capital expenses cannot be funded from the $3 billion in tax increases it has collected since 1975. Voters should not approve the bond referenda until the Board of Supervisors answers the $3 billion question.

Thank you.