April 25, 2017

Arlington County Moving Ahead with Aquatics Center

In a "breaking" news story shortly after the Arlington County Board's afternoon recessed meeting ended, ARLnow.com reported:

"After a years-long delay caused by anticipated cost overruns, Arlington County says it’s finally ready to move forward with the second phase of the Long Bridge Park project, including a scaled-down aquatics and fitness center."

According to ARLnow.com, the first phase of Long Bridge Park, located at 475 Long Bridge Park -- north of Crystal City, was completed in 2011.

A press release published by Arlington County, and distributed at 8:30 P.M., contains three bullets:
  • Cost-effective design/build construction method
  • Design competition to include community involvement
  • Community-recommended core programs moving forward

The press release goes to great pains to describe how project costs will be limited, pointing out:

"The budget for the total Phase 2 project, as approved by the County Board in the FY 2017-2026 Capital Improvement Plan, is $63 to $67 million, the amount of funding originally approved in 2012.  The final total will depend on decisions made during the design process.  The budget includes, in addition to the aquatics facility, an extension of the esplanade, rain gardens, public gathering spaces, parking, public art and additional environmental remediation." (emphasis added)

The county detailed the next steps, and noted, "The public will review the concepts in November 2017, with the Board then selecting the final design. construction(sic) is expected to begin in late 2018."

Who wouldn't want to build a vanity project in this "showplace of environmentally sound redevelopment of what was once a brownfield by the Potomac?" Only a politician, you say? But then the park includes "an overlook with views of capital monuments, the Wave Arbor public art feature, a rain garden, and more." You say you can already imagine the ribbon-cutting ceremony?

One Arlington pundit suggested that instead of building a new swimming pool for D.C., the Arlington County Board should consider voting to rejoin the original 10 square miles. And "CaptainObvious," commenting at ARLnow.com, wondered if the school capacity issue shouldn't be solved before the county starts building extra pools?

The August 4, 2016 Growls has links to several other Growls where you can obtain historical information about the Aquatics Center.

If you have concerns or questions about the Aquatics Center in particular, or Long Bridge Park in general, Growls readers who are Arlington County taxpayers are encouraged to contact the Arlington County Board. To contact the Board, just click-on the following link:

  • Call the County Board office at (703) 228-3130.

And tell them ACTA sent you.

April 24, 2017

A Thought about the National Debt

"Interest payments currently consume about 6.5 percent of the federal budget, or $266 billion, making it the fifth largest budget line item behind defense, social security, Medicare and Medicaid. (emphasis added)

"In two years, the Office of Management and Budget predicts interest rates will rise to nearly 4 percent, pushing debt service payments to $474 billion, or nearly 10 percent of the federal budget. By 2026, those amounts rise to $787 billion and 12.2 percent of spending.

"And even though we’re dedicating such a huge chunk of federal revenues to the national debt, the amount owed keeps going up, because all we’re paying is the interest, without denting the principal, while we continue to borrow. (emphasis added)

"A nation unwilling to make even the thinnest of spending cuts has to borrow increasing amounts to maintain programs and add new ones, while meeting the rapidly rising debt payments.

"To say this is unsustainable is to state the obvious. But at this point, even a sincere commitment to fiscal discipline won’t defuse the debt time bomb. Doing that will require an austerity that Americans have not endured in modern times, and likely couldn’t stomach. Frankly, it means weaning the citizenry from the federal teat." (emphasis added)

~ Nolan Finley

Source: his April 22, 2017 column, "Debt is Real Trump Budget Cruelty," The Detroit News.

April 23, 2017

Arlington County Board Makes It Official - Tax Burden to Rise

The Arlington County Board made it official yesterday, and adopted a $1.25 billion Fiscal Year 2018 budget, according to the county press release, released yesterday.

The five bullet points in the press release were:

  • 1.5-cent property tax rate increase dedicated to Metro, Schools
  • Cuts made to Manager’s proposed budget
  • $7.4 million more n General Fund revenues for Metro
  • $23.3 million increase for Schools
  • Investments in Columbia Pike, Lee Highway

We growled about the Board's action to raise the real estate property by 1.5 cents on Thursday following the Board's budget work session, the so-called Chairman's mark. The Growls includes links to both Arlington Sun Gazette and Washington Post reporting.

Here's what amounts to a summary of the Board's action on Saturday, April 22, 2017:

'The Arlington County Board today adopted a $1.25 billion balanced General Fund Budget for Fiscal Year 2018 that includes a one-and-a-half-cent increase in the real estate tax rate for Calendar Year 2017.

“This budget is a compromise and a consensus of the Board, and reflects the values of this community,” said Arlington County Board Chair Jay Fisette. “The Board agreed to a modest increase in the property tax rate — less than the Manager recommended — because of the extraordinary funding needs of Metro and our public schools. Both Metro and our schools are vitally important to Arlington. We and every other jurisdiction served by Metro are having to increase our contributions as Metro continues to rebuild. And the County must help APS meet the challenge posed by its growing student population. Both investments are investments in our future.”

"County Manager Mark Schwartz had proposed a two-cent increase in the real estate tax rate to provide additional funding for Metro and Arlington Public Schools. The Board chose to make cuts and reallocations to the Manager’s proposed budget to keep the increase to one-and-a-half cents per $100 of assessed property value. This will increase the tax rate from the current $0.991 per $100 of assessed value to $1.006 per $100 of assessed value (including stormwate tax)."

In his comments following adoption of the FY 2018 budget, John Vihstadt talked about his successful motion that directed the Manager to suggest options that would "dial back the advertised 2 cents property tax hike to a penny." He pointed out that some called it a 'charade' or 'posturing.' He thanked his fellow Board members, who "actually accepted a number of the reductions." As a result, he thought that dialing back the advertised property tax increase of two cents by 25% should be considered an "accomplishment."

He also pointed out that the Arlington County Civic Federation had highlighted that "with rising assessments, everyone will still face increased tax burdens higher than the inflation rate -- even before this property tax increase is included." The bottom line, Vihstadt said, is that "Arlington becomes less affordable each year," and then went on to emphasize the Board needs to "infuse a culture of economy here at 2100 Clarendon Boulevard," saying "We know how to add. Subtraction, not so much." He ended by saying, "continued scrutiny of how we approach our annual budget carryover process and our many reserves and fund balances is essential." An attitude that citizens should be looking for in each and every future County Board member, no matter their party affiliation.

The press release identified several fee increases, too, including:

  • Household solid waste fee was increased $6.88, bringing the rate to $314.16 per year.
  • Water/sewer rate was increased to $13.62 per 1,000 gallons, an annual increase of about $24.50 per household.
  • Accessory homestay permit fee of $60, a new source of revenue for the county.

As the county has emphasized numerous times over the past few months, Metro received a significant increase, specifically one cent of  the 1.5 cents tax rate increase. According to the press release, "the County's total operating support for Metro" is now $71 million.

The County continued to be enthralled by so-called affordable housing. "The Board increased funding to affordable housing over the FY 2017 budget by $1.3 million. Total AHIF funding in FY 2018 is just over $15 million." Parks advocates also benefited from Board action, e.g, $4 million for land acquisition rather than the Manager's $2 million recommendation.

While it's too late to take action on the FY 2018 budget, Growls readers who are Arlington County taxpayers are encouraged to make their concerns about spending by Arlington County and Arlington Public Schools heard by the Arlington County Board.  To contact the Board, just click-on the following link:

  • Call the County Board office at (703) 228-3130.

And tell them ACTA sent you.

UPDATE (4/25/17). The Washington Post's Patricia Sullivan reported on the County Board's official action raising the real estate tax rate by 1.5 cents, "all devoted to schools and Metro."

April 22, 2017

Virginia Improves Its Economic Outlook and Performance

The American Legislative Exchange Council (ALEC) published the 10th edition of Rich States, Poor States this week. Subtitled the ALEC-Laffer State Economic Competitiveness Index, it "reveals a pro-growth trend across the nation for 2017." The authors of Rich States, Poor States are Dr. Arthur Laffer, Stephen Moore, and Jonathan Williams.

Here's how ALEC introduces the index:

"Rich States, Poor States examines the latest movements in state economic growth. The data ranks the 2017 economic outlook of states using fifteen equally weighted policy variables, including various tax rates, regulatory burdens and labor policies. The ninth edition examines trends over the last few decades that have helped or hurt states’ economies.

"Used by state lawmakers across America since 2008, Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, is authored by economist Dr. Arthur B. Laffer; Stephen Moore, distinguished visiting fellow at the Heritage Foundation; and Jonathan Williams, vice president of the ALEC Center for State Fiscal Reform."

The state rankings are based on two numbers:

The first is the Economic Outlook Ranking, "a forecast based on a state’s current standing in 15 state policy variables. Each of these factors is influenced directly by state lawmakers through the legislative process. Generally speaking, states that spend less—especially on income transfer programs, and states that tax less—particularly on productive activities such as working or investing—experience higher growth rates than states that tax and spend more."

The second is the Economic Performance Ranking, "a backward-looking measure based on a state’s performance on three important variables: State Gross Domestic Product, Absolute Domestic Migration and Non-Farm Payroll Employ- ment—all of which are highly influenced by state policy. This ranking details states’ individual performances over the past 10 years based on this economic data."

Virginia's Economic Outlook ranks 11th (1=best, 50=worst), and it's Economic Performance ranked 23rd. The latter is a combination of state GDP (28th); state domestic migration (22nd); and non-farm payroll (24th). The Economic Outlook is an improvement over 2016 when it ranked 13th, but still has a ways to go since it ranked 8th in 2010.

The economic variables that helped its relatively high Economic Outlook ranking of 11th included whether Virginia levied an estate or inheritance tax; state minimum wage, Virginia's right-to-work status, and its average workers' compensation costs. On the other hand, economic variables dragging down Virginia's Economic Outlook include top marginal corporate income tax rate; property tax burden; recently legislated tax changes; and, number of tax expenditure limits.

The complete 55-page .pdf version of the Index is available here.

HT Clark Packard for bringing the new "Rich States, Poor States" to our attention at the National Taxpayers Union (NTU) blog. His post included:

". . . The study confirms what many know to be true – states that tax and spend less outperform high spending and high taxing states.

"Over the last couple years, for instance, North Carolina has dramatically improved its economic outlook – from 26th in 2011 to 3rd for 2017 – by passing comprehensive tax reform that lowered rates and helped rein in state spending."

ALEC included the following quote about the report by U.S. Senator Tim Scott (R-South Carolina):

"As the national economy continues to remain far below trend, ALEC’s measures of state economic policies and how these policies contribute to state-level economic performance are more important than ever for understanding economic growth and opportunities. This publication provides fundamental knowledge for evaluating the policies that enhance economic growth, and those that lead to economic stagnation. It is a must-read for policymakers and anyone interested in how our states can grow and provide their residents more opportunities to succeed."

Growls readers who are not satisfied with the "state of the Commonwealth" should take a few minutes to review the entire Rich States, Poor States report for Virginia, and then write to Governor McAuliffe. Click-on the following link:

Growls readers who are concerned that Virginia legislators are not making the right economic policy decisions should write to their state legislators. The following legislators represent Arlington County in the Virginia General Assembly: Senators (Adam Ebbin, Barbara Favola, or Janet Howell) and Delegates (Rip Sullivan, Patrick Hope, Alfonso Lopez, or Mark Levine). Contact information for members of the General Assembly can be found here  -- use one of the "quick links" to locate the senator and delegate who represent you.

And tell them ACTA sent you.

April 21, 2017

The Federal Income Tax -- Then (1913) and Now (2017)

With the 2017 tax filing season over for most Americans, Growls readers might find of interest a short 104-year history of the income tax that Americans for Tax Reform (ATR) posted last week.

ATR makes the following points:

  • In 1913 the top marginal income tax bracket was 7% -- today it is 39.6%.
  • In 1913 the marginal income tax bracket range was 1% - 7%. Today the range is 10% - 39.6%.
  • In 1913 there were 400 pages in the tax code. Today there are 74,608 pages in the code.
  • In 1913 the family standard deduction was $98,425.45 in today’s dollars. The family standard deduction now is just $12,600.
  • When the income tax started in 1913, only 358,000 Americans had to file a 1040. Today 148,606,578 Americans file 1040s.

As Grover Norquist, president of Americans for Tax Reform, said, "The American income  tax is perhaps the most dramatic example of how government grows at the expense of liberty.

The following chart from ATR shows the perniciousness of the income tax:

 

Burt Fulson, professor of history at Hillsdale College has an essay posted at the Foundation for Economic Education (FEE) website. It is entitled, "The Progressive Income Tax in U.S. History," and includes:

"During the 1800s economic thinking in the United States usually conformed to the founders’ guiding principles of uniformity and equal protection. One exception was during the Civil War, when a progressive income tax was first enacted. Interestingly, the tax had a maximum rate of 10 percent, and it was repealed in 1872. As Representative Justin Morrill of Vermont observed, “in this country we neither create nor tolerate any distinction of rank, race, or color, and should not tolerate anything else than entire equality in our taxes.”

"When Congress passed another income tax in 1894—one that only hit the top 2 percent of wealth holders—the Supreme Court declared it unconstitutional. Stephen Field, a veteran of 30 years on the Court, was outraged that Congress would pass a bill to tax a small voting bloc and exempt the larger group of voters. At age 77, Field not only repudiated Congress’s actions, he also penned a prophecy. A small progressive tax, he predicted, “will be but the stepping stone to others, larger and more sweeping, till our political contests will become a war of the poor against the rich.”

"In 1913, almost 20 years later, the ideas of uniform taxation and equal protection of the law for all citizens were overturned when a constitutional amendment permitting a progressive income tax was ratified. Congress first set the top rate at a mere 7 percent—and married couples were only taxed on income over $4,000 (equivalent to $80,000 today). During the tax debate, William Shelton, a Georgian, supported the income tax “because none of us here have $4,000 incomes, and somebody else will have to pay the tax.” As Madison and Field had feared, the seeds of class warfare were sown in the strategy of different rates for different incomes."

Growls readers are urged to make their views about the federal income tax known to their members of Congress. Contact information is available at the Library of Congress' Congress.gov. Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -- write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response. And tell them ACTA sent you.

April 20, 2017

Arlington Cunty Government 1.5 Cents; Taxpayers 0.5 Cents

On February 25, we growled when the Arlington County Board "voted 3-2 to advertise a property tax rate for Calendar Year (CY) 2017 of $0.998 per $100 assessed value, not including the $0.013 stormwater rate. The advertised rate is two cents higher than the current property tax rate."

At their final budget work session today, the so-called mark-up session, County Board members settled on a 1.5 cent increase in the real estate tax rate, according to Scott McCaffrey of the Arlington Sun Gazette this afternoon.

In his reporting, McCaffrey wrote:

"County Board members on Thursday signaled they planned to increase the real-estate tax rate from 99.1 cents per $100 assessed value to $1.006 per $100, a move that will allow the government to fully fund the school system’s budget request, provide healthy employee raises and support initiatives ranging from land acquisition to services for immigrants faced with deportation.

"The package set for final approval over the weekend represents “as much of a consensus budget as we can [get],” said County Board Chairman Jay Fisette, who is wrapping his 20th and final budget season since being elected in 1997.

"The spending plan, Fisette said, is “a budget that accomplishes many of the goals we have.”

"Board members spent part of Thursday huddled with staff, working through last-minute issues, including back-and-forth over whether a specific pot of funding should be devoted to schools or to affordable housing.

"Having worked through issues in dispute as best they could, “nothing is intended to change between today and Saturday,” Fisette said.

For Arlington homeowners, there will be a double whammy of the higher tax rate and higher average assessments. For the owner of a property assessed last year at $700,000 whose assessment rose the countywide average of 2.9 percent, 2017’s real-estate tax bill of $7,246 will be up from $6,937 a year ago.

"But it could have gone higher: Earlier in the budget season, County Board members had advertised a two-cent increase in the tax rate. That set the maximum increase the board could impose, although board members could – and apparently will – vote for a rate lower than that cap.

"While lower than the advertised rate, the increase rebuffs the recommendation of the Arlington County Civic Federation, whose members in a lopsided vote during budget season called for no change to the existing rate. Civic Federation delegates said the county government would be able to fund all of the requests of Schwartz by using funds left over from previous years."

Read the remainder of McCaffrey's report here.

It's disappointing that the Board finds it easier to add to the taxpayers' burden instead of doing the hard work of making local government more efficient, effective and economical. Rather, they seem to find it easier to raise taxes to fund ever larger government. Or worse, benefiting from the windfalls that result from increases in real estate assessments. But doing the right thing would mean setting priorities, setting performance standards, identifying inefficiencies, and holding the Board and the Manager accountable.

For example, a search of Fairfax County's employee handbook identified an employee suggestion program. Unfortunately, a similar search at Arlington County's website found no such program that would enable county employees to suggest more efficient and economical ways of working.

Furthermore, Arlington County taxpayers, as well as taxpayers of other Northern Virginia jurisdiction, need a tool that compares costs and other performance measures of Northern Virginia jurisdictions. This tool would be similar to the Guide produced by the Washington Area Boards of Education (WABE). Or, something like the Arlington Public Schools' "APS Dashboard," which makes performance and business operations data transparent.

Nevertheless, Board member John Vihstadt deserves kudos for pushing to have the Manager provide a list of budget reduction options equivalent to a one-cent tax rate increase. It was also his recommendation that the Manager complete a reserves analysis when the Board adopted the FY 2017 budget a year ago. The analysis was originally due October 1, 2016, but unfortunately, the deadline was continually slipped until the Manager presented the analysis during the Board's April 18 budget work session. If the analysis had been completed timely, it's entirely possible the Board could have identified the funds that would have allowed the Board to settle on a much lower tax hike than 1.5 cents. But credit is also due to the entire Board since it took various combinations to pass some of those budget reduction options.

Kudos, too, to the Arlington County Civic Federation's Revenues & Expenditures Committee for their help in pushing the Board to look to using its reserves to pay for some or all of needed additional tax revenues. We'll  growl about the April 18 budget work session in a future post.

UPDATE (4/22/17). Scott McCaffrey updated his Arlington Sun Gazette story from Thursday with "additional comments  from community leaders," and is kind enough to include comments from Thursday's Growls.

UPDATE (4/22/17). In his Editor's Blog on Friday, McCaffrey reminds readers of lines from the Beattles' George Harrison, writing:

"Among the lyrics: “If you drive a car, I’ll tax the street/ If you try to sit, I’ll tax your seat/ If you get too cold I’ll tax the heat/ If you take a walk, I’ll tax your feet.”

"The Arlington County Board yesterday itself reached a little deeper into the pockets of county property owners, deciding to boost the tax rate 1.5 cents from the current 99.1 cents per $100.

"As for where all that extra cash will be going, the late Mr. Harrison put it best in discussing government spending: “Don’t ask me what I want it for/ If you don’t want to pay some more.”

Makes you wonder which Arlington County Board members have "Tax Man" on their mobile device's Playlist.

UPDATE (4/22/17): Patricia Sullivan posted a report Thursday evening for the Washington Post about the decisions the Arlington County Board made at its budget work session Thursday. In her lede, Sullivan wrote, "Facing rising costs from Metro and higher school enrollment, the Arlington County Board is poised to pass a 1.5 cent increase in the property tax rate, one-half cent less than what the county manager proposed and the board advertised earlier this year."

April 19, 2017

Cost Increases Halt Next Round of NCAC Projects

At ARLnow.com yesterday, Chris Teale reported,"No new projects to improve pedestrian safety — such as sidewalk fixes or streetlight installations — will be approved until at least December after a vote last week by a citizen committee."

He continued, writing:

"The Neighborhood Conservation Advisory Committee voted April 13 to suspend its spring funding round due to “anticipated increases in construction costs for projects that have already been approved by the County Board,” neighborhood conservation program coordinator Tim McIntosh said in an email.

"NCAC represents 48 of the county’s 57 civic associations and leads the development of neighborhood plans. It also recommends neighborhood-initiated improvements for county funding, like sidewalks, street beautification, pedestrian safety projects, street lights and parks.

"The NCAC’s decision does not affect existing projects already approved by the County Board. McIntosh said design work and construction on several plans will continue this year, but that the committee “wanted to reserve a portion of its 2016 bond to cover any cost overruns which may occur later this year for projects going out for competitive bid.”

"The focus will be on continuing design work for approved projects and making sure sufficient funding is on hand to complete them prior to approving new ones,” McIntosh said.

In an email, an anonymous tipster was critical of the NCAC approvals process and said more must be done to help improve pedestrian safety."

Teale also reported that "McIntosh said no decision has been made about the fall round of funding, set to be voted on in December."

Arlington County's has much more information about the neighborhood conservation program, including NC plans, the NC funding process, the NC Guide, and the NC advisory committee (NCAC). You can also access a list of participating neighborhoods.

Will wonders never cease? We have been concerned with NC project cost overruns. However, NCAC delegates are due kudos for taking action to defer funding action for six months. And hopefully, this action will be a wake-up call for county staff and the Arlington County Board to get their arms around NC costs.

Growls readers are encouraged to voice their concerns about the Neighborhood Conservation program known to members of the Arlington County Board.  To contact the Board, just click-on the following link:

  • Call the County Board office at (703) 228-3130.

And tell them ACTA sent you.

April 2017
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Items in Growls are written by individual ACTA members and do not necessarily represent the views of the Arlington County Taxpayers Association, Inc. Please send comments about Growls to The Growl Meister