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2003-10-08 Taxpayer Alliance testifies before Virginia Tax Commission

Needed: Spending reform, not tax reform

Arthur G. Purves, president of the Fairfax County Taxpayers Alliance, was one of approximately thirty speakers at a public hearing before the Commission on the Revision of Virginia's Tax Code.  The hearing, the last before next month's elections, was held in Richmond on Thursday, Sept. 25, 2003.

According to Mr. Purves, Virginia's budget crisis is the result of too much revenue, not too little.  During the so-called "dot-com" bubble, Virginia state government received $8 billion more than previous revenue projections had predicted. Mr. Purves stated, "The government made a mistake by assuming that this increase would continue forever, and it increased spending for recurring programs. When the dot-com bubble burst and revenue returned to its normal level, government was over-extended."

The claim that Virginia suffered a $6 billion revenue shortfall since 2001 is misleading since it implies that the state budget decreased by $6 billion.  In fact, since 2001 the state budget has increased, from $23.3 billion to $25 billion this year.  Spending per resident has increased since 2001, even after adjusting for inflation.  Since the dot-com bubble began in 1997, Virginia inflation-adjusted spending per resident has increased 20 percent.

Mr. Purves also questioned the accountability for state spending. He cited a Joint Legislative Audit and Review Commission (JLARC) report that stated that Virginia inflation-adjusted spending for public schools increased nearly ten times faster than enrollment between 1981 and 1997.  Inflation-adjusted budgets for four-year public colleges increased four times faster than enrollment.  The state government has offered no explanation for why these increases were needed or what they accomplished.

A link to Mr. Purves' testimony is on the Fairfax County Taxpayers Alliance website,