November 29, 2015

A Thought on Political Corruption

(Since 1976) "earmarks increased from a handful to thousands of provisions slipped into bills. These appropriations were not 'approved' by Congress in any meaningful sense of the word. They were just stuck into bills at the behest of one or two members, and the entire bill was passed without anyone but the sponsors knowing they were in there. Or caring. A study by the Congressional Research Service in 2006 found that the federal budget in fiscal 2005 had 16,072 earmarks by its definitions, up from 4,203 in the first year of its survey, 1994.

The nakedness of the quid pro quos implicit in earmarks became a national scandal. As I write, a moratorium on earmarks passed in 2010 is still in effect. It is unclear how much of the earmark effort has been converted to alternative methods.

Washington is still not nearly as corrupt as real kleptocracies such as Equatorial Guinea, Uzbekistan, or Sudan. The people who run Washington are generally more honest, more committed to the public good, and less thuggish than the officials in a real kleptocracy. The proportional size of the take in Washington is far less than the take in a real kleptocracy. But the parallels in the ways that Washington and kleptocracies operate are many and troubling."

~ Charles Murray

Source: page 96, Murray's latest book, "By the People: Rebuilding Liberty Without Permission."

p.s., The CRS study mentioned above is CRS memorandum, dated January 26, 2006, from the "CRS Appropriations Team," and bears the subject: Earmarks in Appropriation Acts: FY1994, FY1996, FY1998, FY2000, FY2002, FY2004, FY2005. HT Federation of American Scientists. Footnotes in the original quote not included above.

November 28, 2015

Arlington Public Schools Has Highest Average Teacher Pay

On Monday, November 23, some Washington Post readers were surprised at the Metro section story, by Moriah Balingit, describing the wide range of teacher pay across Northern Virginia and its neighboring Maryland school districts.

According to the story's Web title, "Teachers can make $15,000 more just by moving to the district next door." Here's the lede:

"With 10 years of experience and a master’s degree, a mid-career teacher in Fairfax County can earn $15,000 more by moving slightly east, to Arlington County, the highest-paying suburban school district in the Washington region. In Maryland, the average teacher salary in wealthy Montgomery County is $9,300 more than the average teacher salary in neighboring Prince George’s County. (emphasis added)

"These disparities, highlighted in a report from the Washington Area Boards of Education (WABE), are making it difficult for districts that pay on the lower end of the spectrum to attract and retain teachers, school officials said, especially as the demand for teachers grows in tandem with student enrollment. A nationwide teacher shortage also has made it particularly difficult for districts to find qualified teachers for special-education students and for English-language learners.

"The report “clearly demonstrates the challenge we face in recruiting and retaining the very best teachers,” Fairfax Superintendent Karen Garza said in a statement. Fairfax County ranked fifth among the region’s Maryland and Virginia school districts — not including D.C. Public Schools — with an average teacher salary of $67,589.

"The annual WABE guide shows how 10 area school districts compare on several measures, offering stark contrasts between them. The region’s school districts vary widely in what they pay teachers, how crammed classrooms are and what they spend per student."

Ms. Balingit's report is worth reading in its entirety. In addition, the charts and graphs that accompanied her report were especially helpful in understanding how teacher pay changed over the years. Also, one chart compared teacher pay and per-student spending, showing a close correlation between teacher pay and per-student spending. A second chart showed average class size for elementary, meddle, and high school for the 10 school districts.

Balingit includes some specific reporting on the Arlington Public Schools (APS), writing:

"A district’s average salary also can be reflective of the kind of teacher a district can afford. Deirdra McLaughlin, the assistant superintendent for finance and management in Arlington, said the district’s high average salary is partially explained by the system’s tendency to hire experienced teachers with graduate degrees who command higher salaries.

< . . . >

"Arlington spends $18,616 per student, the most of any district in the WABE report. That money translates into high teacher salaries and some of the region’s lowest class sizes.

“If you really take excellence seriously, you have to pay for it,” McLaughlin said."

You can find the Washington Area Boards of Education (WABE) report at the following APS webpage.

We've growled at least annually in response to each year's WABE report. You can find the most recent ones here: December 29, 2013; November 13, 2014; and November 3, 2015.

Growls readers are encouraged to provide the Arlington County Board their thoughts on economic development in Arlington County. Just click-on the link below:

  • Call the County Board office at (703) 228-6015

And tell them ACTA sent you.

November 27, 2015

Updating Arlington County's Office and Hotel Occupancy Rates

On March 13, 2015, we posted an extensive Growls about the challenge of economic development in Arlington County as well as the "importance of maintaining Arlington's strong commercial tax base." We also reported on "the monthly meeting of the Arlington County Civic Federation on Tuesday evening, March 3, 2015," where "delegates heard the chair of Arlington County Economic Development Commission, Sally Duran, discuss 'the importance of a flourishing business community which will substantially benefit Arlington taxpayers.'"

Later, on June 26, our Growls included comments from the Board chair's State of the County speech, which were, "Facing record-setting office-vacancy rates that top 20 percent countywide and surpass 30 percent in some corridors, the county government has put additional resources into economic-development efforts."

With that in mind, we noted today's Arlington Sun Gazette contained two-related stories.  In one, the Sun Gazette reported on the "Mixed results for Arlington office-vacancy rate in 3rd quarter." The second was entitled, "Arlington hotel-occupancy rate remains healthy."

In the article regarding office occupancy, the Sun Gazette reported:

"Arlington’s third-quarter office-vacancy rate of 21.4 percent was up a tick from 21.3 percent in the second quarter, and was unchanged from a year before, according to new data.

"Among various sub-sectors of the commercial-office market, rates for the third quarter stood at 29.6 percent in Rosslyn, compared to 28.4 percent in the second quarter and 28.5 percent in the third quarter of 2014; 24.2 percent in Crystal City (compared to 25 percent and 23.6 percent); 18 percent in Ballston (19.3 percent and 19.5 percent); 17 percent in Clarendon/Courthouse (16.8 percent and 9.8 percent); and 10.3 percent in Virginia Square (10.6 percent and 21 percent).

"Figures come from CoStar and were reported by Arlington Economic Development."

The Sun Gazette also reported, "For Northern Virginia as a whole, the office-vacancy rate of 17.3 percent in the third quarter was down from 17.4 percent a quarter before, but was up from 17 percent in the third quarter of 2014."

As for hotel occupancy, the Sun Gazette wrote:

"Arlington’s hotel-occupancy rate for the first nine months of the year is up from the same period in 2014, as is the average daily room rate, according to new figures.

"The year-to-date occupancy rate of 79.3 percent from January to September is higher than the 78-percent rate reported in 2014, according to figures from Smith Travel Research, reported by Arlington Economic Development.

"For the same period, the average daily room rate of $160.01 was up from $152.33 in 2014."

The occupancy rates are updated month, and are included on the Economic Indicators page, part of Economic Development's Resource page.

Growls readers are encouraged to provide the Arlington County Board their thoughts on economic development in Arlington County. Just click-on the link below:

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

And tell them ACTA sent you.

November 26, 2015

A Thought About Thanksgiving

"Rarely has it seemed quite so important to gather together on this Thanksgiving — this most American of holidays.

"In troubled times we crave the solace of friends and family, of warmth and familiarity even more than usual. And when bombs are going off in familiar places, when a second European capital spends days in lockdown, and when a wonderful young man from our own community is gunned down in the streets of Israel’s West Bank, there is no doubting these are troubled times indeed.

"So we cling a little more closely to those we love — whether they are near or not, whether face to face, or face to computer, whether around the table or around the world. They are, after all, at the top of our list of things to be thankful for — that we have made it to this time together, when so many have not. But we hold in our hearts the memory of those who are not with us and weep for families for whom the pain of loss is still so raw."

~ From a Boston Herald Editorial

Souce: Thanksgiving 2015 Editorial, Boston Herald.

November 25, 2015

CAGW Selects Its November 2015 Porker of the Month

Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.

Citizens Against Government Waste (CAGW) has selected Rep. Frank Pallone (D-N.J.) their November Porker of the Month "for his absurd attack on government watchdogs who discovered gaping holes in Obamacare’s enrollment verification system."

Here's how CAGW justified awarding Rep. Pallone this dubious honor:

"In 2014, at the request of the House Ways and Means Subcommittee on Oversight, the Government Accountability Office (GAO) began testing the verification system by creating 12 fake identities and attempting to obtain coverage through the federal Exchange.  The GAO published the full results on July 22, 2014, and revealed that 11 of the 12 fake applicants were each able to qualify and receive $2,500 worth of subsidized coverage, even though they had used forged documentation for proof of income or citizenship.  On July 16, 2015, a follow-up GAO investigation found that all 11 fake applicants were automatically re-enrolled for the next year.  Six of the 11 were temporarily cancelled based on new information, but five of those six were able to apply for reinstatement and successfully reacquired their coverage.  Such “secret shopper” investigations are a common practice to test verification systems in order to determine if they are subject to waste and mismanagement.

"After finding these gaping holes in the federal Exchange, GAO released preliminary findings on October 23, 2015, during testimony before the Energy and Commerce Subcommittee on Health, of how 10 new “secret shoppers” were able to obtain coverage in the federal marketplace from New Jersey and North Dakota, and from the California and Kentucky state exchanges.  GAO found that, “although 8 of these 10 fictitious applications failed the initial identity-checking process, all 10 were subsequently approved by the federal Marketplace or the selected state marketplaces.”  Four of the approved fake applicants used Social Security numbers that were never issued, such as ones beginning with “000.”

"While taxpayers and most members of the Energy and Commerce Committee greeted GAO’s efforts with admiration and disgust at the failure of the Obamacare verification system, the committee’s Ranking Member, Frank Pallone (D-N.J.), had the opposite reaction during the October 23 hearing.  His ire toward the GAO investigators themselves was evident when he said, “For you to spend your time and your effort, taxpayer money, in trying to make it more difficult [to get coverage] or trying to highlight the difficulties, I just don’t understand,” he said.  He went on to unfairly smear the investigators as partisan attack dogs and claimed that exposing fraud “is just not a priority.”  Apparently, Rep. Pallone, who is a longstanding member of the Energy and Commerce Committee, has either forgotten or no longer cares that GAO’s mission is “to support the Congress in meeting its constitutional responsibilities and to help improve the performance and ensure the accountability of the federal government for the benefit of the American people.”  And if he had another or better method to test the accuracy of the verification system, he did not express it at the hearing.

"CAGW President Tom Schatz said, "The GAO should be applauded for their work to expose waste, fraud, and abuse in the federal government.  Rep. Pallone’s shameful attacks are not only false, they are an insult to every taxpayer who expects his or her money to be used wisely and thriftily.  Comments like these are prime examples of why Congress has abysmal approval ratings."

"For his reprehensible and erroneous attack on the investigators who exposed more examples of Obamacare’s vast flaws, CAGW names Rep. Frank Pallone its November 2015 Porker of the Month."

If you're not familiar with Citizens Against Government Waste, CAGW "is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government." Kudos to CAGW for pointing out GAO's role in assisting Congress in conducting oversight and for their continued efforts to fight government waste.

November 24, 2015

Why Its Important to Broaden the U.S. Tax Base

In a paper published by the non-partisan, non-profit  Tax Foundation today, Scott Greenberg, a federal tax analyst,   introduces the subject at the Tax Foundation's Tax Policy blog:

"Over the past few years, politicians in both parties have expressed enthusiasm for lowering federal tax rates. This makes sense: many economists have found that high tax rates hurt economic growth and international competitiveness. Meanwhile, the U.S. levies some of the highest rates in the world on corporations, capital gains, and dividends.

"Lowering federal tax rates would be easy, if it weren’t so expensive: lower rates means less revenue that the federal government is able to collect, leading to a larger budget deficit. Many politicians promise to pay for rate cuts with equally large spending cuts, but these promises seem unrealistic in the current political climate.

"As a result, the only practical way to cut tax rates significantly without increasing the deficit is by broadening the tax base: eliminating tax preferences (such as deductions, exclusions, and other narrow provisions) that reduce federal revenue. These tax preferences are often inefficient, unfair, and complex – which makes “broadening the base and lowering rates” a win-win strategy for tax reform.

"As a general rule, recent tax reform plans have not been nearly imaginative enough in proposing measures to broaden the U.S. tax base. Congressman Dave Camp’s tax reform proposal contained dozens of small base broadening measures, which would only have raised enough revenue for modest rate cuts. Meanwhile, most of the 2016 presidential candidate plans are estimated to cost over $1 trillion – which means that candidates have pursued ambitious rate cuts without proposing equally ambitious base-broadening measures."

Here are the "key findings" from his report (Fiscal Fact No. 492, Options for Broadening the U.S. Tax Base):

  • Broadening the U.S. tax base and using the revenues to lower marginal tax rates remains a sound template for tax reform. Moving to a broader tax base and lower rates would simplify the tax code, remove unfair preferences, and create economic growth.
  • In recent tax reform proposals, policymakers have declined to pursue ambitious base-broadening measures, limiting their ability to cut tax rates.
  • Three promising directions for broadening the U.S. tax base are ending the exclusion of employer-sponsored health insurance, removing the cap on the Social Security payroll tax, and capping itemized deductions at a fixed dollar level.
  • Each of these options would have negative economic effects, if implemented without accompanying rate cuts. However, combined with marginal rate cuts, each would lead to economic growth.
  • Together, all three options would raise enough revenue on a static basis to lower the corporate tax rate to 20 percent, the top rate on ordinary income to 29.5 percent, and the top rate on capital gains and dividends to 13 percent. Doing so would grow the U.S. economy by 6.0 percent over the long term.

Take a few minutes to scan Greenberg's report on broadening the U.S. tax base. It should be useful as you compare presidential candidates' tax plans. And kudos to the Tax Foundation for continuing their mission of improving lives through tax research and education.

November 23, 2015

When the Budget Guidance Misses the Elephant in the Room

Over the weekend, we growled about the budget guidance, which the Arlington County Board provided the Acting County Manager on Thursday for preparing the FY 2017 budget that begins July 1, 2016.

Although we pointed out that the Board's very first budget guidance was to "(p)resent a balanced budget that assumes no increase in tax rates," items 2 through 11 on the Board's list of guidance failed to recognize just how fast Arlington County spending has increased over the period 2001 through 2014. According to Table D-1, General Government Expenditures by Functions, in the Statistical Section of the FY 2010 and FY 2014 Comprehensive Annual Financial Reports (CAFR's), total spending has increased 5.5% annually although annual inflation has averaged about 2.6%.

Let's take a look at how fast spending increased from 2001 through 2014 for those functions:

  • General Government -- 3.9%
  • Public Safety -- 6.0%
  • Public Works/Environmental Services -- 8.4%
  • Health and Welfare -- 2.9%
  • Culture/Recreation --  4.4%
  • Education -- 5.3%
  • Non-Departmental -- 16.5%
  • Debt Service -- 6.2%
  • Regional Contributions, Transit -- 9.0%
  • Regional Contributions, Other -- 3.6%

Let's also look at how the Arlington County Board controlled spending according to inflation and population growth.  Last December, we growled about how increased transparency by the Commonwealh of Virginia seems to have slowed the growth of spending. In their annual report on state spending, the General Assembly's Joint Legislative Audit and Review Commission (JLARC) shows trends in spending when controlled for inflation and population. We did the same with Arlington County's general government expenditures for FY 2001 through FY 2014. Let's take a look:

In 2001, total expenditures were $594.9 million, and population, according to the CAFR's Table K was 189,983, meaning that per capita expenditures came to $3,131. By 2014, total expenditures grew to $1,186 million, and population was 215,000, which means that expenditures per capita was $5,516.

We then adjusted the 2001 per capita expenditures using the Department of Labor's Bureau of Labor Statistics' CPI Inflation Calculator to arrive at an inflation-adjusted expenditures per capita for 2014 of $4,185.32, which multiplied by the 2014 population gives a total expenditures amount for FY 2014 of $899,843,800 when adjusted for inflation and population.

The bottom line is that if the Arlington County Board was truly fiscally responsible -- by limiting county spending to inflation and growth in population -- the County Board would have spent $286,117,581 less in FY 2014 than they did. In other words, Arlington County government would be 31.8% smaller.

So although the Arlington County Board annually shouts to the heavens that it has the lowest real estate tax rate in the region, when real estate assessments shows regular annual growth, the County Board gets a bonus without having to receive any political flak from increasing the real estate tax rate. Not to mention their annual practice of using carryover funds for so-called one-time spending.

Growls readers are encouraged to provide the Arlington County Board their thoughts on FY 2017 budget. Just click-on the link below:

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

And tell them ACTA sent you.

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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