As local governments throughout the commonwealth struggle over budget deficits facing them this year and in the next fiscal year, it is instructive to look at Fairfax County’s spending over the past few years.
The annual Fairfax County Budget Analysis, recently published by the Thomas Jefferson Institute clearly outlines how government spending has caused much of the current financial stress facing the largest county in Virginia. Important lessons can be learned from Fairfax County that are essential in understanding the current debt faced by our state and by our local governments around Virginia.
Comparing government spending growth to what would have happened had spending increased only at the rate of inflation (Consumer Price Index) and population growth provides the citizens a bench mark from which to better understand why governments are in such dire financial shape. If government grows at this rate, then the financial burden of government remains constant and no programs are cut. If government grows faster than this formula, then the burden of government is increased on each of us.
Over the past four years Fairfax County spent $521 million over what the CPI/population formula would indicate, increasing government by more than was necessary. Government is $521 million more expensive than had spending been kept under better control. This accounts for fully 80 percent of the current budget deficit, and for the four year period prior to last year, that overspending amounted to more than $1 billion.
Many local political leaders are saying that the budget shortfalls are due to declining property values which have reduced projected government revenues. Well, that’s just the easy answer that elected officials want to hide behind as an excuse for years of financial overspending – at least that’s the case in Fairfax County.
But let’s now look at a clear example of how this local government continued to spend great amounts of taxpayers’ money even when the housing boom had begun to deteriorate. According to the preliminary numbers released by Fairfax County in its own budget documents, the revised spending for Fiscal Year 2008 was almost $68 million more than the Board of Supervisors approved six months earlier! So while property values were tumbling, the elected Board of Supervisors actually added to its own spending $68 million. That’s more than 10 percent of the current projected budget deficit.
Had Fairfax County spending been limited to that of the approved budgets over the past four years, fully $239 million less would have been spent! Yet these dollars increased the base of government and account for more than a third of the project $650 million budget shortfall.
Now, let’s look at just one major spending spree. In the last few years, the government in Fairfax has purchased over 3,200 rental units, becoming the largest landlord in the county. The housing bureaucracy this has created is supposed to provide affordable housing for teachers, police, government workers, etc. However, few if any of these government workers live in these units and, on top of that, subsidies are made to renters making up to $99,000 a year. This shows that Fairfax County had so much money that is had to look around to find something to spend it on. So bonds were issued to pay for these rental units which consumed monies that could have gone to up-dating schools that are in terrible shape. Moreover, the city of Arlington has no rental units, but still addresses the issue of affordable housing. So what possessed Fairfax County to go into business when the private sector is where rental units belong?
When similar overspending issues were brought to the attention of the Fairfax County government more than a year ago by the Thomas Jefferson Institute, the County Executive issued a rebuttal full of misrepresentations. When those were pointed out to him in detail there was no response whatsoever. That is not how a representative government should operate.
So what needs to be done?
First, let’s have the check books and the contracts that the county government and school system sign put on line so that everyone can see where tax money is being spent. Other states and localities have done this, so can Fairfax County. Then, let’s have Supervisor terms of office be staggered so that half are elected every two years so more citizen input is allowed. And, let’s have a robust Citizens Budget Oversight Committee to review spending, prioritize government programs and suggest how government can be more efficient. Competitive bidding on government services could save millions, and much more can be done if elected officials were really serious about reining in the growth of government by prioritizing that government spending. A list of an additional16 better-management suggestions are outlined in the Jefferson Institute’s latest Fairfax County Budget Analysis.
Today’s government spending crisis is much larger than needed to be the case. Had our elected official limited spending to the rate of inflation and population growth government would have grown but at a much more sustainable rate. Unless this change takes place at the state and local level, government spending will not be reform and we face a similar crisis once again in a few short years.
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