Testimony at the Fairfax County Board of Supervisors Budget Hearing

By Arthur G. Purves - President, Fairfax County Taxpayers Alliance

March 29, 2011

Madam Chairman and Members of the Board:

My name is Arthur Purves.  I address you as president of the Fairfax County Taxpayers Alliance.

County and School Board budget presentations this year have been less than candid.

In proposing an average real estate tax hike of $111 for next year, the County Executive said that the higher tax would still be $12 less than what we were paying in 2007.  That is false, because he did not include the new stormwater real estate tax, which is hidden in Fund 318.

Moreover, the County Executive neglected to say that in 2007 we were paying not ten dollars more, but $2,400 more in real estate taxes than we were paying in 2000.

To reverse the tax real estate tax hikes made during the housing bubble, you would have to set the real estate tax rate at 74 cents, rather than the $1.09 that you are proposing.

The school Superintendent claims that between FY2009 and 2011, schools made more than $465 million in “reductions and cost avoidances” and eliminated 1,400 positions.  However, when we looked at the school budget, we found that this year (FY2011), Fairfax County Public Schools estimates that it will spend $100 million more than was spent in FY2009 ($2,177M in FY2009 vs. $2,276M in FY2011).  We also found that there is this year 161 fewer employees than in FY2009 (22,150 in FY2011 vs. 22,311 in FY2009), not 1,400.

School comments on achievement do not address college preparation.  However of the 3,511 Fairfax County seniors who took the ACT college admissions test last year, only 44 percent were prepared for college.

 School presentations propose four-percent raises for all school employees as necessary to remain competitive with neighboring school districts.  What the presentations did not say is that last year, after two years without raises, Fairfax County Public Schools had 30,000 applicants for 1,000 job openings.  They’re even getting applicants from other states that are in worse financial shape than Virginia.

The schools claim that for hard-to-fill positions they have far fewer than 30 applicants; however the schools could, but do not, offer hiring and retention bonuses for hard-to-fill positions.

The schools are also less than candid when they state that they cannot estimate the increase in the FY2013 Virginia Retirement System (VRS) payment.   That increase is going to be about $125 million.  In addition in FY2013 the schools will lose $21 million of Federal stimulus money.  So the School Board is covering up at least a $146 million budget shortfall they do not want to become an issue for the upcoming school board election.  Instead, they will spring a budget crisis on the taxpayers right after the election and demand a large tax increase that will not have been discussed during the election

That neither the County nor the schools can be honest about the proposed tax increases proves one thing:  They know that higher taxes do not solve their problems; higher taxes subsidize problems while the problems become worse.

Consider these two problems:

First, County and school employees want raises that outpace inflation.   So does the private sector. The problem is that for decades household incomes have been flat.  Are you going to continue to raise taxes on the private-sector taxpayer so that the public sector can be better paid than the taxpayers who fund them?

 Is the United States still a prosperous nation? We import more than we export, the Federal government is borrowing a quarter to a third of its budget, and we export our technology and manufacturing jobs.  This is a national problem, but the Fairfax County Board of Supervisors can work with powerful national unions and national associations of counties to be an influence to repatriate America’s manufacturing expertise.  The public nor the private sectors are in this together; neither can have real salary increases until the United States regains its economic strength.

Second, public employees would like to keep their pensions, which the private sector now rarely offers.  This problem would be largely solved if we fixed the job creation problem just referred to.  However, life spans have increased, employees frequently retire, start drawing their pensions, and then get another job. As of 1 July 2010 Fairfax County pension funds had an unfunded liability of $1.7 billion.  The VRS unfunded liability is $20 billion.  We asked the VRS how many years would it be before it is unable to pay benefits.  They did not know.  It seems likely that retirement ages will have to be raised to kept these trust funds solvent.

Higher taxes cannot solve these problems.  However, using your influence as Supervisors of Fairfax County, you can solve them.  Remember Henry Ford, who said, “Whether you think you can or think you can’t, you’re right.”

Thank you.