Sunday, January 25, 2009

Of Local Elections and Local Prosperity

What a politician does not say can be as important as what he says. An excellent example is served up by the special February 3 election for Chairman of the Board of Supervisors of Fairfax County, Virginia. The county is facing an astonishing $650 million shortfall between planned expenditures and expected revenues. This is clearly the most important issue before the county government this year, and probably for the next two or three years. Candidate Sharon Bulova gives the deficit short shrift on her campaign website. Actually, ignoring the issue would be a better description. That is despite the fact—or maybe because of the fact—that she has been chairman of the county budget committee for the past 17 years. Sharon Bulova is not talking.

In days of mind-numbing expected trillion dollar federal deficits, some perspective may be needed to understand how astonishing the Fairfax County shortfall is. There are approximately 1 million residents of Fairfax County. The shortfall, using basic math, therefore amounts to $650 for every man, woman, and child in the county. Another way of looking at the problem, the shortfall is more than the combined county budgets for police and sheriff, fire and rescue, parks and health departments, and libraries.

It is common to hear people blame such shortfalls on tax cuts, despite the lengthy evidence showing that tax cuts can actually increase revenue by stimulating economic growth and reducing tax avoidance. Sharon Bulova herself likes to brag that tax rates have been reduced by her in recent years. This is, of course, the sleight of hand that local governments around the country use to try to fool their constituents. When home prices are going up by ten and twenty percent each year, it is easy enough to reduce rates by 5% while increasing actual taxes paid. That is why tax rates have been reduced by Sharon Bulova and her friends while homeowners actually pay twice as much in property taxes as they did in 2000. If you have been living in Fairfax County during that time, ask yourself if you feel that county services—including schools—are twice as good today.

Now that housing values are in decline and businesses increasingly find Loudoun, Fauquier, and Prince William Counties attractive alternatives to Fairfax, a gaping hole has opened in the fabric of the county budget. Sharon Bulova does not offer a clue as to how she would address it. If she mentions it on her website, it is hard to find.

In contrast, challenger Pat Herrity has made addressing the shortfall the central issue in his campaign for Chairman of the County Board. The problem is huge, and the solution is not easy, but Herrity’s plan has the right elements. First of all, he intends to focus on the amount of taxes actually paid—not the tax rate—and he pledges to reduce the family property tax bill regardless of whether rates go up or down. Raising taxes in the teeth of a recession is foolish, unless you want more and deeper recession. He recognizes that back in the heyday of economic prosperity in Fairfax County a much larger share of county funding came from businesses because businesses were attracted to Fairfax County rather than avoided it. Making the county business friendly again is long overdue and will boost the prosperity of the county, its residents, and add to tax revenues. Herrity also calls for a restoration of budgetary discipline, asking what is needed, what is not, and how we can economize—normal budgetary practices that have become atrophied in recent years. In other words, Herrity seems to suspect that there may be more fat in the county budget than there is in the family budget.

Special local elections are notorious for bringing out few voters. If you like the idea of voting for your leadership and want your vote to count, it will likely count more in the February 3 election for Fairfax County Chairman than in many others. For people who plan to remain in Fairfax County, this could be one of the most important times for their votes to count.

No comments: