Growls

In Merry Old England, so the story went, Robin Hood stole from the rich and gave to the poor. For the story of Homeowner Grants, however, the Arlington County Board plunders the less well off in order to give to the better off among us.

The County Board started the Homeowners Grants program in FY 2006, based largely on the large increases in the assessed values of residential real estate. The budget set aside almost $2.2 million for an estimated 3,000+ grants. Grants were to be $500 plus $50 for additional exemptions. However, only 2,025 grants were made for a total just above $1.0 million with an average grant of $512.58 despite some extraordinary marketing efforts by the county. According to staff, 73% of the FY 2006 grants were addressed to condominiums. Even the Board’s own Fiscal Affairs Advisory Commission (FAAC) urged the Board to restrain program growth, but that didn’t stop the Board from setting aside $2.1 million for these grants in their adopted FY 2007 budget (pages 28 and 244).

Who can apply for these grants and who pays for them? The County has paid for at least two full-pages “cha ching” advertisements (page 9, Washington Post, October 19 Alexandria-Arlington “Extra” and the back page, Arlington Connection, October 25-31) urging Arlington homeowners to apply if their adjusted gross income was $77,047 and their assets were $340,000 or less (the county website has a more complete set of frequently asked questions).

The County Board sure look like Robin Hoods in reverse to us. And how many taxpayer dollars are being spent just for those advertisements?

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“Porker of the Month is a dubious honor given” by Citizens Against Government Waste (CAGW) “to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.” For October, CAGW “named Rep. David Price (D-N.C.) Porker of the Month for requesting a $750,000 federal earmark that helped pay for electronic arrival-time signs now being deployed at several bus stops in his district in Chapel Hill.”

According to CAGW, “The project’s total cost is estimated to be about $950,000; with 14 bus stops, that’s roughly $67,857 per sign.  The same company that is installing the Chapel Hill system won a contract with Alameda-Contra Costa Transit in California that included 100 signs for $1,031,079, or $10,310.79 per sign.”

Arlingtonians may remember something called NextBus. Despite the effort and cost to install NextBus signs in the Rosslyn-Ballston corridor several years ago, the system still doesn’t function. In their haste to buy our votes, I guess politicians never learn that sometimes the old systems just work better. As CAGW noted in announcing the award to Rep. Price, “(w)hat taxpayers really need is a sign to let them know how long it will take for Congress to bankrupt the federal government.”

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When the County Board adopted the Fiscal Year 2007 budget in April, the “total funds” budget topped $1 billion for the first time. That means our local government expects to spend a total of $1.0034 billion on all manner of goods and services. Dividing that by 203,000 residents (rounded) means that local government in Arlington County will spend just about $4,943 for each man, woman, and child.

To show just how much more the Arlington County Board enjoys spending our money than do the other jurisdictions in Northern Virginia, we prepared the following chart from data collected by Virginia’s Auditor of Public Accounts in his Comparative Report of Local Government for Revenues and Expenditures for the Fiscal Year Ended June 30, 2005.

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Voters in Virginia’s 8th District will have a choice of three candidates on the ballot when they enter the voting booth: Jim Hurysz (I), Jim Moran (D), and Tom O’Donoghue (R). The only one of the three to submit his views to the National Taxpayers Union’s Congressional Survey for Virginia's 8th District was Tom O'Donoghue.

The NTU survey “consisted of 11 questions (some with numerous subparts), on issues ranging from Social Security's future to specific tax reduction proposals.” Issues that Tom O’Donoghue supports include tax limitation and balanced budget amendments to the Constitution, Social Security choice, spending restraint, no tax increase, and a flat tax. The other two candidates either “did not or chose not to answer the questions.” I guess in their view, taxpayers are just here to be plundered legally.

To quote Vanya Cohen, “When there's a single thief, it's robbery. When there are a thousand thieves, it's taxation.” (cited in the Quote Garden)

The National Taxpayers Union has more information on other candidates as well as on ballot issues.

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That’s how the Washington Post’s Annie Gowen describes the “faulty workmanship” at Arlington County's half-finished fire station #5, located on South Hayes Street, just south of Pentagon City, in her story in the October 19, 2006 weekly section. Gowen reports “it's still unclear who will ultimately pick up the tab for the costly repairs -- the bonding company or county taxpayers. The county says the work will be paid for by the bonding company that insured the fired contractor; the insurer says it will pay for the repairs for now, but that the matter will later have to be sorted out in court.”

Gowen notes it’s become a campaign issue as challenger Mike McMenanmin (R) announced his candidacy standing before the half-finished fire station. At a recent candidates’ debate, the Post reported that incumbent Chris Zimmerman (D) said, “There's a little bit of ‘kill the messenger' here , , ,The problem was that the contractor wasn't doing his job. The fact is, they weren't doing the job, and our people . . . threw them off the job and found some people who could finish it . . . That's why I'm proud of the way that's been handled.”

A rather curious remark given that Gowen reports the station is two years overdue. Not to mention the fact that Arlington taxpayers may still be on the hook for those cost overruns. For more information, here’s the county’s CIP.

Update: Brings to mind the Loop Bridge in Rosslyn where contractors messed up under what they claimed was close County direction and supervision. That "essential" bridge has never allowed a single taxpayer vehicle trip from one end to the other!

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The Washington Post today contains two letters to the editor of the Arlington/Alexandria weekly section speaking in opposition to school bonds that will be on ballot in November.

In opposing the school bond, one citizen writes:

Over the next six years, APS proposes to spend $112 million to demolish and rebuild Yorktown High School. Then, according to its capital spending plan, the big spending will stop. Four other schools, in the same bad shape as Yorktown, according to independent consultants, will then somehow share $92 million for their renewal and renovation.

After that, the bond debt already incurred, combined with sinking real estate assessments, will make continued spending at current levels unfeasible.

Meanwhile, critical repairs to Wakefield become more expensive and must compete with urgent needs at Jefferson, the Career Center and Randolph and Abingdon elementary schools.

The School Board and school officials have their own view on the school bonds in this Q&A bulletin (requires Adobe).

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Question. The overall county budget increased from $620 million for Fiscal Year 2000 to $1.003 billion for Fiscal Year 2007, an increase of 61.8%, significantly faster than inflation. What will you do to bring greater control to county spending?

• Michael T. McMenamin. I would do several things to bring greater control to county spending. One, debt service has been one of the major budget drivers in recent years, and I plan to take a much more critical look at our capital spending programs.  Two, stop our automatic “continuing services” approach to the budget, and bring back the so-called “green rods,” the procedure under which the County Manager was instructed to bring forward program reductions and eliminations for the Board’s consideration. Finally, give the Manager more detailed budget guidelines, and then work harder to stay within, unlike what happened this past budget cycle.
• Joshua F. Ruebner. I support creating an Inspector General for Arlington to help control county spending. I am greatly troubled that some county projects wind up not being completed on time and costing more than initially budgeted for. It seems that there is a “group think” mentality among County Board members when it comes to budgeting and approving costly projects, a natural result of one-party rule. This mindset prevents the County Board from asking difficult questions of the County Manager as to why projects are incorrectly budgeted. I believe that creating a non-partisan position of Inspector General would create the requisite oversight to ensure that county projects are both worthwhile and accurately budgeted.
• Christopher E. Zimmerman. I do not accept the premise of the question, that county spending was not under control during the period described. A variety of factors explain spending increases that exceed the rate of inflation. For example, the County is committed to paying its public safety personnel (police and fire) at salaries that keep us in the top 25% of neighboring jurisdictions with whom we compete for their services. To maintain that standing, we have had to provide pay increases substantially exceeding the rate of inflation. At the same time, federal and state funding has been reduced in many areas, year after year.  By next year State aid will have fallen by about 22 % just since FY 2002.

Are you an ACTA member yet? If not, join now!

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On Saturday, we noted that the Arlington Sun-Gazette reported having difficulty in obtaining the detailed results of the Arlington schools' AP tests. School honchos managed to issue a “corrected” press release today although with the same shallow test results (available at our Saturday post). It enabled the Sun-Gazette to post a follow-up report.

It appears that someone in the white elephant on Quincy Street needs to drive out to Fairfax County to talk with the FCPS manager responsible for AP testing to find out what they are doing right. Admittedly, more APS students are taking AP exams, but the average score dropped from the prior year. By comparison, Fairfax County managed to increase the number of both Black and Hispanic students who took AP tests, and those students still increased their average scores, according to the FCPS press release referenced on Saturday.

Again we note that the Arlington Public Schools cost Arlington taxpayers about $4,500 more per student in comparison to Fairfax County. Something still doesn’t compute!

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The Arlington Sun-Gazette posted an online story today with the headline “Arlington School Officials Unable to Provide Details on AP Scores.” Scott McCaffrey, who reported the story, wrote:

“Arlington Public Schools officials on Friday were unable to provide raw data on 2006 Advanced Placement (AP) scores for local students, making it impossible to determine exactly how well students were doing compared to previous years and compared to students in neighboring school districts.”

After one more paragraph, McCaffrey wrote:

“Arlington school officials on Oct. 19 released some information, nearly six weeks after officials in neighboring Fairfax County released their own data, but despite the lengthy delay, Arlington's centerpiece information - how many Arlington students received each of the five possible grades on the test - was missing. School officials said two top administrators who had access to the data were out of the office Friday, and they were not able to provide the information.”

For an explanation of “why AP matters,” see this Washington Post article by the paper’s education reporter Jay Mathews. He created the Challenge Index several years ago, which is based upon the number of AP courses taken by a high school’s students.

Don’t believe that Fairfax County’s public schools had their much more detailed AP scores posted six weeks ago? Note the detail in their September 8, 2006 press release compared to the shallow detail in Arlington’s October 19, 2006 press release. So don’t tell Arlington’s citizens about those “two top administrators” being out of the office on Friday! Especially when the Arlington Public Schools cost Arlington’s taxpayers about $4,500 more per student than does Fairfax County’s public schools.

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Earlier this week, Bloomberg News reported that “Bono, the rock star and campaigner against Third World debt, is asking the Irish government to contribute more to Africa. At the same time, he's reducing tax payments that could help fund that aid . . . Bono and his U2 bandmates earlier this year moved their music publishing company to the Netherlands. The Dublin group, which Forbes estimates earned $110 million in 2005, will pay about 5 percent tax on their royalties, less than half the Irish rate. Naturally, the band is fighting public criticism of the move. Bloomberg cites the comments of lead guitarist David Evans, who told a Dublin radio station, “Our business is a very complex business . . .(o)f course we're trying to be tax-efficient. Who doesn't want to be tax-efficient?”

In the forthcoming issue of The ACTA Watchdog, we include the following Mark Steyn quote from his August 14, 2006 NY Sun column, which seems to respond rather directly to U2’s move to the Netherlands:

"Western do-gooders...may occasionally swing by some Third World basket-case and condescend to the natives, but for the most part the multiculti set have no wish to live anywhere but an advanced Western democracy. It's a quintessential piece of leftie humbug. They may think globally, but they don't act on it."

HT to the Small Business & Entrepreneurship Council for including the Evans quote in their October 20 e-newsletter. Needless to say, we see nothing wrong with tax-efficiency, but don't be a hypocrite about it, as one person in the Bloomberg column described U2's move.

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An informal poll of over 500 federal government executives by the Federal Times found that 74% think their agency’s budget could be trimmed by greater efficiencies and better planning, according to this policy blog at the Heritage Foundation. In fact, the survey found that 60% of the respondents thought their budgets could be cut at least 5% without affecting performance while 30% thought their agency’s budget could be cut a whopping 20%. In addition, 66% thought their agency was wasting money sending employees to conferences.

Sure sounds like something worth talking about with your Congressional representatives. Even 1% of a $2.7 trillion budget is $27 billion while 20% would be more than a half-trillion dollars of waste.

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Virginia doesn’t afford its citizens the right to hold initiatives, and referenda are held at the behest of our elected representatives. Twenty-four states do allow it. However, John Fund writes in today’s OpinionJournal from the Wall Street Journal that judges are threatening direct democracy.

“Establishment forces have long resented that initiatives allow voters to do an end run around them and are always looking for ways to limit them. Florida's Legislature put a measure on next month's ballot that would require a 60% supermajority for passing all future constitutional amendments. Such a barrier would discourage many groups from even trying to qualify measures. In Massachusetts, more than 170,000 voters signed petitions for a ballot measure against same-sex marriage. But the Legislature, which is required to vote on initiatives before they reach the ballot, is trying to avoid holding a vote.”

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Long-time ACTA members may remember our concerns of how the Arlington Public Schools, and other Northern Virginia school districts, were verifying eligibility for the free and reduced price lunch program, an entitlement program funded through the U.S. Department of Agriculture. The story was even picked-up by the Washington Post.

Based upon a comparison of statistics on free and reduced price lunches from the Virginia Department of Education to data on kids living in families in poverty from the Census Bureau’s Small Area Income & Poverty Estimates (SAIPE) program, it appears that APS and other Northern Virginia school districts have a more expansive definition of entitlement than do many other Virginia school districts. For example, Arlington’s ratio is 3.64:1 while the Botetourt school district’s is only 1.78:1. For six Northern Virginia districts, the ratio was 3.02:1 while the ratio for 16 other Virginia districts was 2.29:1.

Since payments from Virginia’s K-3 Primary Class Size Reduction Program are predicated on free lunch eligibility, it seemed like the Virginia Auditor of Public Accounts might be interested in determining whether all of Virginia’s school districts adhere to the same eligibility standards, especially since payments from the K-3 program will be over $67 million in FY2006. Consequently, in late September we provided him with our analysis and an explanation of our concerns.

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Sixteen years after the Arlington County Board convinced voters to support a 1990 bond referendum (requires Adobe), and again in 1994, for a new Cherrydale fire station, the county is still dithering. What about the $4 million bond referendum in 1998 for a Westover Library? These are just two examples cited in a resolution approved 31-19 by the Arlington County Civic Federation urging both the County and School boards to not “put construction projects on bond referenda until reasonably complete designs and sound budgets for the projects are available.”

In this week’s Arlington Connection, Seth Rosen writes, “Next month residents will be asked to accept an additional $8 million bond for the library project, which is still in its infancy nearly a decade after it was originally conceived. ‘Eight years later the old library building is still standing there,’ said Beth Wolffe, head of the Civic Federation’s Schools Committee.”

Rosen also noted that “School Board Vice Chair Libby Garvey said it would be harder to get school bonds passed in odd-numbered years when voter turnout was lower. She added that the school system "is not interested in running a political campaign every year" to secure the support of the community.” In fact, the only argument that school advocates could make at the Federation meeting was that if bond referenda were presented to voters in odd-numbered years, there was a greater risk of their being defeated. As always, taxpayers get to foot the bill for fiscal irresponsibility. See our October 4 Growls for news about next month's bond referenda from the October 4 Civic Federation meeting.

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When we last growled about the car tax on July 20, we pretty much spelled out the issues for Arlington’s taxpayers, but a column in Monday’s Augusta Free Press provides the opportunity to take another bite. The paper’s Chris Graham weaves together numerous interviews with local politicians, members of the General Assembly, and university professors into a compelling read.

Among the many quotes are the following:

Tim Williams, member of the Waynesboro City County, "The state has a surplus, and here they are passing this onto us. I don't understand that. They made the promise, and now they're reneging on it. They should step up and fulfill that promise that they made.”

Ben Cline, Delegate (R-Rockbridge), Virginia General Assembly, "The car tax is a promise broken to the taxpayers of Virginia, and I know that the taxpayers that I represent are furious about that broken promise, among many others."

Thanks to our “progressive” Arlington County Board, owners of cars with values greater than $7,000 will see their car taxes increase from 30% to as much as 91%.

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Jim Bacon writes at Bacon’s Rebellion that “Virginia's system for building and maintaining roads has changed little in three quarters of a century. Some people think it needs more money. Others think it needs an overhaul.” Bacon writes, “In 1932 the Byrd organization in Virginia created the system for building and maintaining state roads that, but for minor modifications, remains in place today. Some people say there's nothing wrong with the system that more money can't fix. But others believe that Virginia's road-building arrangements have failed to keep pace with 75 years of social and economic change, and need to be restructured from top to bottom.”

Bacon ends with these thoughts:

“The fiscal controversy isn't taxes or no taxes, as the Mainstream Media has portrayed it. The issue is who pays. Should the state strive simply to match increases in traffic with increases in transportation capacity, or should it structure the taxes/tolls in such a way as to encourage Virginia motorists to drive less?

“As Virginians think about their transportation future, they must delve deeper than the simple-minded tax/no-tax mantra of the Mainstream Media. The larger question is this: Can Virginia afford to continue down the road of Business As Usual, or should lawmakers to re-think the state transportation system from stem to stern?

Bacon will follow-up this historical perspective by looking at who should be responsible for transportation, and then a proposal for urban development areas. Bacon's Rebellion provides a fresh perspective on Virginia issues.

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Anyone who has tried preparing their own federal tax return knows the current system needs fixing. One way would be a flat tax. Those interested in learning more about the flat tax have a resource in this policy paper published by the National Taxpayers Union. It was updated earlier this year with additional economic and revenue data. The paper seems well-researched with sections on the definition of the flat tax, the success and spread of the tax, and the implications for the United States.

The paper’s conclusion is that:

The flat tax is a simple, fair, efficient, and effective model for tax reform. The increased incentive to work and invest, combined with revenue growth and economic competitiveness make it an attractive alternative to the complicated tax systems currently in place in many developed countries. As the flat tax continues to spread throughout Eastern Europe, it drives global tax competition, benefiting citizens and corporations alike. Given the success of other nations in reforming their tax codes to make them more friendly to growth, it is only sensible that the United States should seek fundamental change in its own Tax Code in order to avoid falling further behind in the race to attract Foreign Direct Investment. Developments in Eastern Europe provide the U.S. with one working model of what serious tax reform could do for economic growth. So does the National Retail Sales Tax. In either case, the U.S. should not delay in enacting meaningful Tax Code reform.

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Yesterday’s South Florida Sun-Sentinel reported: “Last year, the Federal Emergency Management Agency awarded Florida $22.6 million for "crisis counseling" for victims of hurricanes Wilma and Katrina. Florida's program, called Project H.O.P.E. -- Helping Our People in Emergencies -- is still in operation with about 450 workers across the state who spend much of their time leading games and performing shows for groups of residents -- regardless of whether they're in crisis or even experienced the storms,”

The Sun-Sentinel also reported: “The job is stressful, Project H.O.P.E. officials say. Counselors regularly attend ‘stress management’ sessions that have included collecting shells on the beach, ‘silly string and art therapy,’ and ‘the toilet paper game.’”

I would include a few more examples from the newspaper’s report, but I’m not sure if you want to laugh or cry at these, or whether to just throw a bat at someone. Is there any doubt that the federal government gets far too much of our tax dollars?

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The Watchdog went to the printer this week, and we expect it to be at USPS early next week. The primary feature is a question and answer exchange with the two candidates for the Arlington School Board. The Arlington Public Schools have an arrangement, known as revenue sharing, with the county that provides APS with almost half of all tax revenues collected by the county.

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Now for a few more facts. The National Taxpayers Union has the latest IRS data (2004) posted showing who pays how much of the federal tax burden. The data shows those with the top 1% of adjusted gross income (incomes above $328,049) paid 36.89% of all federal income taxes while the top 5% of AGI (incomes above $137,056) paid 57.13%. In comparison, in 2003, those earning the top 5% of AGI paid 54.36%, and in 2002, those earning the top 5% of AGI paid 53.80%.

The Tax Foundation provides a bit more detail, including historical tables, about the 2004 IRS data. They also point out that “between 2000 and 2004, pre-tax income for the top 1 percent group grew by 7 percent. On the other hand, in that same time period, pre-tax income for the bottom 50 percent increased by 10.6 percent.”

Will facts quiet the class warriors? We wish it were so, but taxpayers can at least arm themselves with the facts.

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Despite the repeated claims of many in the so-called “old media,” i.e., newspaper stalwarts such as the Times of both New York and Los Angeles and the Washington Post as well as the likes of NBC, ABC, and CBS, that the tax cuts since 2000 primarily benefited the rich, that’s not what USA Today reported on Monday. According to the paper’s Kevin McCoy, “Americans of every income have benefited from a drop in federal income tax rates as Bush administration tax cuts enacted since 2000 took effect, an independent analysis of newly released IRS data shows. But those earning $75,000 to $500,000 are shouldering a larger share of total taxes paid as millions more of them earn higher incomes and get hit with the Alternative Minimum Tax, the analysis also found.” USA Today based their story on an analysis of IRS data by the Tax Foundation.

The Union Leader in New Hampshire wrote in their editorial, “The Tax Foundation analysis shows that the tax cuts benefitted (sic) all income groups. At the lowest levels, the tax cuts ended up removing millions of people from the tax rolls entirely.”

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Delegates of the Arlington County Civic Federation last night took a straw poll on the five bond referenda that will be on the ballot next month. Although Federation delegates voted to support all five, Scott McCaffrey of the Arlington Sun-Gazette reports online today that “the margins of victory for the proposed school and parks bonds were narrow, highlighting delegates' concerns about a lack of firm plans for some of the big-ticket items in those packages.”

McCaffrey added, “The closest vote, 40-37, came on the $35.55 million parks and recreation bond, with opponents voicing concern over the limited information presented by the county government on the planned $26 million rebuild of the Arlington Mill Community Center.” Other votes were school bonds (47-28), Metro and transportation projects (71-6), community infrastructure (57-19), and utilities (68-8).

The Arlington County Board has been using taxpayer money for many years to subsidize so-called affordable housing. For Fiscal Year 2007, for example, the adopted FY2007 budget shows the county will spend almost $40 million on various housing programs.

Now, however, the Manager is asking the County Board for authority to deal in condominiums, according to Scott McCaffrey writing in the September 28 Arlington Sun-Gazette. McCaffrey reports that “County Board members on Sept. 19 deferred until next month a proposal that would, if approved, result in the county government purchasing 30 units in condo projects along the Metro corridor at reduced rates, re-sell them at market rates, and plow the profits into affordable housing outside the corridor. The 30 affordable units had been included by developers of projects on Wilson and Clarendon boulevards and North Monroe, Kansas, Pollard and Nelson streets as part of a give-and-take with the county government and local residents. After the approvals, county staff concluded that the government's housing goals would be better served by being able to provide more units, particularly rental units, off the Metro corridor. The current proposal has been floating around for several months.”

We looked, but couldn’t find, the Manager’s detailed report (item #76) on the County Board’s September 19 agenda. The text that is there indicates the Manager is asking the Board to set-aside $2.5 million for the purchase of 30 units.

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On Friday morning, a consultant (CHEIRON) briefed the Arlington School Board about the reporting requirements of the Government Accounting Standards Board (GASB) for “postemployment benefit plans other than pension plans.” According to the consultant, “In general (GASB) Statement 43 requires disclosures that include a description of the plan, summary of significant accounting policies, contributions and reserves. Most significantly, the statement requires disclosure of the funded status (actuarial liabilities vs. assets) and statement of funding progress along with the methods and assumptions used for those disclosures.” Much more detailed information, including the meeting agenda, Superintendent’s memo to the Board, and PowerPoint presentation are available for the Board’s September 29, 2006 meeting.

According to pages 20 and 21 of the PowerPoint presentation, the unfunded liability for the retirement benefit promises made by this and past School Boards to school employees ranges from $156 million to $257 million, depending upon the discount rate assumed when evaluating future liabilities. Assuming the Board chooses to use an 8% rate, total liabilities would be $156 million, and the School Board will have to set aside $16.9 million annually. However, the Superintendent pointed out to the Board in his September 26 memo, that $8.2 of the $16.9 million is already part of the school’s operating budget “reducing the annual required contribution to $8.7 million.”

The bottom line is that all politicians’ promises have a price no matter how much honey they sweeten them with. Eventually taxpayers have to pick up the tab.

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