The Future of Fairfax County – Part I

(Editor’s Note: Fairfax County is the largest county in our state. This article points to some disturbing issues which could impact not only that county but the state. Fairfax County is currently the anchor of the Northern Virginia’s economy. The second half of this article will run in our next issue on September 18, 2014.)

Victor Davis Hanson, in Lawmakers Gone Wild published in City Journal, Spring 2014, described the economic destruction of California. Fairfax County seems started down the same path. The following applies his arguments to Fairfax County.

Problem:

In the Spring of 2014, the Fairfax County Board of Supervisors (BOS) voted to increase the real-estate tax rate. When combined with the increase in assessments, single-family householders will be paying 7% more than in the previous fiscal year. Condominium-dwellers will pay 11% more. In addition, the BOS recently added 1.7% to the state’s sales tax, a tax that especially hits the low-wage families. Meanwhile, the median household income decreased 2%. Citizens earn less but the Supervisors want more.

What are the results of this process?

IRS data show that raising real-estate taxes, as the BOS has done, drives middle-class people from the county. The IRS data also show that low-wage households are moving out and minimum-wage households are moving in, increasing the demands on the welfare system. For the very wealthy the tax increases are relatively small as a percentage of their income. For the low-wage households these taxes are devastating, making them move out of the county.

The number of people leaving Fairfax County is only a few percent; however, the associated wealth is not so small. IRS data show the net effect of those leaving and those entering the county has, over the past 15 years, accumulated to a loss of $6 billion in annual household income. The average income per household leaving is approximately $70,000 per year; of those entering, $60,000 per year – low enough to qualify for affordable (subsidized) housing. The County’s stated objective of reducing poverty and eliminating homelessness lures these minimum-wage households to the county.

Charity, concern for our fellow human beings, demands that we help the poor, but is government aid helpful? The War on Poverty seems to have failed. Crime is more common among those receiving aid. Drug usage and broken families are also more common. Impersonal yet substantial government aid discourages recipients from becoming self-supporting. A single mother with two children must earn approximately $50,000 per year to break even with welfare. That’s $25 per hour just to break even, while losing the care of her two children, in some cases for as much as ten of the sixteen waking hours per day, and while paying a hireling to watch the children.

As has been happening in California, the middle class moves out of the county and the welfare class moves

in. Those receiving financial aid will gradually become the voting majority. They will vote for more aid, better aid, quicker aid, etc., until the wealthy resist paying and the poor revolt against cuts – or until the government fails, with the money to be distributed to the welfare recipients coming only from the diminishing class of those wealthy enough to stay.

Will the government continue this process?

Might the county avoid this ultimate ending? Last year, the public pension costs continued to grow, but the BOS seemed more interested in spending taxpayer funds on projects as small as building walkways and bicycle paths that reap convenience for the few users and on especially eye-catching projects as large as the Dulles Metrorail that reaps big profits for the developers.

The BOS has lost sight of at least one fundamental law: that of supply and demand. Look at four recent proposals, the first two of which were set aside only after citizen outcries. (1) Residential Studio Units (RSU’s: small, single-occupancy apartments with no bedrooms) were proposed without any analysis of the supply and demand. (2) A meals tax was proposed with no analysis of the impact on people – determining whose living costs would be increased and whose wages would be decreased. (3) Dulles rail was approved without adequate financial analysis – the BOS’ consultant showed that rail will do almost nothing for congestion. (4) Bike and pedestrian paths are being constructed with no analysis of the demand.

The county’s budget is heavily weighed down by its out-of-control county-employee pension system. Unfunded pension liabilities now top $3 billion ($8,000 for each household in the county). The politically powerful public-employee unions, with nearly 36,000 members, are large enough to elect those who promise them raises. Other taxpayers are insufficiently organized to counter the unions. Reform is difficult when the public-employee unions are among the largest contributors to candidates. Not even the simple expediency of raising the retirement age to that of Social Security is seriously considered.

Increasing taxes has not resulted in better government performance. Arrest rates are about average. The school performance is about average. Approximately half of the county high-school seniors require remedial education when entering college. The number may grow. Of all kindergarteners enrolled in the county’s public schools, now 40% need English instruction — a percentage close to that of California, the state with the largest number of immigrants. Data show that Fairfax County SAT scores, when corrected for demographics, are worse than in most other Virginia school districts. The large proportion of Asians and low percentage of other minorities in Fairfax County schools accounts for the high Fairfax County SAT scores.

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