Growls

We’ve growled before about the so-called revenue sharing agreement (RSA) between Arlington’s County Board and School Board that allows the School Board to avoid accountability over the tax revenues entrusted to them, e.g., February 16, 2009 and June 7, 2009. Because the RSA computes the “county transfer” according to a predetermined formula rather than upon the determination of need, there is no accountability (for details of the RSA, see item E.3. on the School Board’s 11/5/09 agenda).

The lack of School Board accountability is manifested in historical numbers that staff provided to the County Board at their March 9 budget work session. For the schools, one of the columns contained cost per pupil data for FY 1998 through FY 2011 that you can access here.

The cost-per-pupil for FY 1998 was $9,330 while the cost per pupil will be $17,942 for FY 2011 that begins July 1, 2010. Using the U.S. Department of Labor’s CPI inflation calculator, we learn that if the School Board had maintained the cost per pupil to no more than the the rate of inflation, Arlington County taxpayers would see a cost per pupil of only $12,406 rather than $17,942, a difference of $5,536. For the 20,933 students expected to enroll in the fall, APS will receive a windfall of over $115 million in FY 2011.

While the School Board can undoubtedly explain where some of the $115 million sent, e.g., lower class size, Arlington County taxpayers need a better system of accountability from the Arlington Public Schools. However, the question is how much more productive are the Arlington Public Schools because of the $115 million windfall?

Posted by ElGrowlerGrande at 03:06 PM | Permalink | TrackBacks (0)

In a new study released last week (Fiscal Fact 217, March 12, 2010), the Tax Foundation says “federal spending so high that even prohibitive income tax hikes would not balance budget. In the lede paragraph of the related press release, the Tax Foundation writes:

“Federal income tax rates would have to be more than doubled across the income spectrum if Congress were to close the deficit in fiscal year 2010, according to a new report from the nonpartisan Tax Foundation. Instead of taxing joint filers with rates ranging from 10 percent to 35 percent, tax rates would have to start at 24.3 percent and reach up to 84.9 percent.” (emphasis added)

William Ahern, the Tax Foundation’s director of policy and communications introduces the study by saying:

“As usual, the one number that everyone talks about is the budget deficit, and sober, nonpartisan fiscal experts are agog at the Administration's toleration of previously intolerable deficits. Everyone has a slightly different idea of how high the federal deficit can be in an ordinary year and still be "sustainable," but in recent testimony to Congress, Federal Reserve Chairman Bernanke said that the structural deficit was sustainable at 2.5 to 3 percent of GDP.

“At no point in the next ten years, according to the Obama Budget, will the deficit ever shrink to as little as 3 percent of GDP. According to the CBO, it will never even get as low as 4 percent. And the dire deficit predictions of reliable nonprofit groups like the Pew Trust and Peterson Foundation are even more alarming: the deficit won't even shrink to 5.5 percent of GDP in their analysis.

“'Mind boggling' is the term Martin Sullivan of Tax Analysts uses to describe the tax and spending changes that would have to occur just to get the deficit down to 3 percent of GDP.

"Our gridlocked, dysfunctional Congress simply cannot bring itself to absorb these types of painful shocks," says Sullivan. "Given these unprecedented pressures I believe that within the next decade there is more than a 50-50 chance there will be an upheaval either of the political system or the economy."

Add that warning to Moody’s warning earlier this week, as reported by the Christian Science Monitor, March 16 “that it would consider downgrading the triple-A rating for US Treasury Bonds if Washington continues to pile up record deficits,” and you have to wonder why Congressional approval ratings haven’t hit zero.

Posted by ElGrowlerGrande at 03:55 PM | Permalink | TrackBacks (0)

Except for a “must read” essay by Robert Rector, senior research fellow at the Heritage Foundation, at National Review Online, there was no reporting by the mainstream media yesterday marking the 46th anniversary of President Lyndon Johnson’s “War on Poverty,” announcing “a new government mobilization that he claimed would yield “total victory” against poverty in the United States.”

To explain just how large the War on Party was, Rector writes:

“Since the beginning of the War on Poverty, government has spent $16.7 trillion (in inflation-adjusted 2008 dollars) on means-tested welfare. In comparison, all the military wars in U.S. history have cost a total of $6.4 trillion (also in inflation-adjusted 2008 dollars).”

And what has our nation gained from this massive expenditure? Rector says:

“. . . When Lyndon Johnson launched his war, he declared that it would strike “at the causes, not just the consequences of poverty.” He added, “Our aim is not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.”

“In other words, President Johnson was not proposing a massive system of welfare benefits, doled out to an ever larger population of beneficiaries over time. In fact, Johnson declared that the War on Poverty would enable the nation to make “important reductions” in future welfare spending. Johnson’s goal was an increase in self-sufficiency: to create a new generation of individuals capable of supporting themselves.

“On one hand, it is true that, since the beginning of the War on Poverty, the material living conditions of the poor have improved; even the federal government cannot spend $16.7 trillion without having any impact whatsoever. But, in terms of reducing the “causes” rather than the “consequences” of poverty, the War on Poverty has failed utterly. In fact, a significant portion of the population is now less capable of prosperous self-sufficiency than it was before.”

Looking towards the future, Mr. Rector points out:

“The original goal of the War on Poverty — to reduce both poverty and dependence on government — has been abandoned and forgotten. While occasional lip service is sometimes still paid to reducing government dependence, ironically, this concept almost always appears as a justification for new government spending.

“The current goal in welfare is simply to “spread the wealth” for its own sake. The War on Poverty has become a system of permanent income redistribution, which will only increase over time.

“According to President Obama’s budget projections, federal and state welfare spending will total $10.3 trillion over the next ten years. This spending will cost more than $100,000 for each taxpaying household in the U.S. Most of it will be funded by borrowing from future generations and foreign nations.

“This spending is unsustainable. Our nation can no longer afford the War on Poverty spending colossus."

It may be abandoned and forgotten, but the federal worthies continue plundering America’s taxpayers. An essay worthy of inclusion in your "keeper folder."

Posted by ElGrowlerGrande at 01:10 PM | Permalink | TrackBacks (0)

 “Whatever amount is taken from the community in the form of taxes, if not lost, goes to them in the shape of expenditures or disbursements. The two--disbursements and taxation--constitute the fiscal action of the government. Such being the case, it must necessarily follow that some one portion of the community must pay in taxes more than it receives back in disbursements, while another receives in disbursements more than it pays in taxes. It is, then, manifest, taking the whole process together, that taxes must be, in effect, bounties to that portion of the community which receives more in disbursements than it pays in taxes, while to the other which pays in taxes more than it receives in disbursements they are taxes in reality - burdens instead of bounties. This consequence is unavoidable. It results from the nature of the process, be the taxes ever so equally laid. . . . The necessary result, then, of the unequal fiscal action of the government is to divide the community into two great classed: one consisting of those who, in reality, pay the taxes and, of course, bear exclusively the burden of supporting the government; and the other, of those who are recipients of their proceeds through disbursements, and who are, in fact, supported by the government; or in fewer words, to divide it into tax-payers and tax-consumers.”

    ~ John C. Calhoun, 7th Vice President of the United States and U.S. Senator

HTs On Power.org, American Thinker

Posted by ElGrowlerGrande at 05:38 PM | Permalink | TrackBacks (0)

On Saturday, March 13, we growled about those big spenders, the Arlington County Board, citing the “fiscal indicators” included in the Acting County Manager’s FY 2011 proposed budget. For example, bonded indebtedness has grown from $2,209 per resident in FY 2002 to $$3,514 in the FY 2011 proposed budget, but if the County Board had been fiscally responsible, and limited per resident bonded debt in line with inflation, the FY 2011 figure would have been $2,661 rather than $3,514.

• County employees per 1,000 residents. In 2002, there were 19.1 county employees per 1,000 residents, but that number decreases to 17.8 employees in FY 2011.

• School employees per 1,000 students. In 2002, there were 163.0 school employees per 1,000  students, but the number of school employees per 1,000 students increases to 186.4 students in FY 2011.

The bottom line? The county-side of Arlington County government is 6.8% more efficient and economical while the schools-side has become 14.4% less efficient and economical than it was in 2002. When the County Board and the School Board hold their joint budget work session (currently scheduled for Thursday, April 8 from 3:00 to 5:00 PM), will the County Board ask the School Board to explain why the Arlington Public Schools are now operating less efficiently and less economically than they were in 2002?

Posted by ElGrowlerGrande at 03:15 PM | Permalink | TrackBacks (0)

“No man’s life, liberty, or property are safe while the legislature is in session.” (1866)

   ~ Mark Twain

“Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself.”

    ~ Mark Twain

HT OnPower.org

Posted by ElGrowlerGrande at 07:34 PM | Permalink | TrackBacks (0)

If Arlington County taxpayers want to see just how much the Arlington County Board likes to spend their tax dollars, they can spend a few minutes with a calculator and the page labelled “selected fiscal indicators: FY 2002 - FY 2011” in section E, glossary and appendices, of the Manager’s FY 2011 proposed budget. In addition, taxpayers will need to be able to calculate inflation, e.g., using the handy U.S. Department of Labor’s “CPI Inflation Calculator”.

With those tools handy, taxpayers can compute how some of the indicators have changed from 2002 to 2010 based upon changes in population and inflation on a per capita basis. Several examples:

• General fund spending. In FY 2002, general fund expenditures were $612.8 million, or $3,172 per resident. In the FY 2011 proposed budget , general fund expenditures are budgeted for $946.8 million, or $4,414 per resident. If the County Board had controlled general fund spending at the increases in population and inflation, spending per resident in the FY 2011 proposed budget would have been $3,821 per resident, or $649 less per resident.
  

• Bonded indebtedness. In FY 2002, bonded indebtedness was $426.9 million, but will grow to $753.9 million in the Manager’s FY 2011 proposed budget. On a per resident basis, bonded indebtedness was $2,209 in FY 2002 and will be $3,514 in FY 2011. If the County Board had controlled bonding to grow no more than the rate of inflation, it would have grown from $2,209 per resident in FY 2002 to only $2,661 per resident in FY 2011, increaseing only $452 per resident rather than $1,305 per resident.
  

• Total debt service as a percentage of General Fund Expenditures. According to the County’s own numbers, debt grows by 30%, going from 8.0% of General Fund expenditures in FY 2002 to 10.4% in the FY 2011 proposed budget.
  

• Metro subsidy and debt service as a percentage of the General Fund. Again according to the County's own numbers, this percentage goes from 2.1% in FY 2002 to 3.1% in the FY 2011 proposed budget, an increase of 47%.

Time for a new set of five worthies?

Posted by ElGrowlerGrande at 06:06 PM | Permalink | TrackBacks (0)

President Ronald Reagan, America’s 40th President, is famous for the following quote:

“No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth.”

Let’s first take at a bit of Arlington County budget history. In the County Manager’s message in the FY 2006 proposed budget, he told the County Board that because “Arlington is once again extremely fortunate to have a thriving economy that has resulted in high incomes, low unemployment, and increased values in all classes of property.” As a result of skyrocketing real estate assessments, the Manager told the Board, “Due to these increased property values, $33.6 million is recommended for tax relief,” which would create, among other measures:

“A new homeowners' grant program – equivalent to one-half cent -- to provide additional relief of approximately $500 to households earning $72,000 or less ($2.2 million).”

Well, now that the economy has gone south, you might think the Board would be ready to pull the plug on the homeowners’ grant program. But the Manager is only recommending reducing the program, writing in the welfare section (oops, the Human Services department) of the budget:

“The Homeowner Grant Program, which provides a grant to homeowners meeting income and asset requirements, will reduce grant awards from $600 to $300 for incomes up to $55,120, and from $300 to $200 for incomes up to $77,407.  In addition, there will be a reduction in the asset limit to $240,000 for all participants (the current limit is $340,000 depending on income level).

“IMPACT:  Homeowners will receive less assistance to help with their real estate tax bills. In CY 2009 approximately 1,180 households received grants, with 52% receiving the higher grant amount.”

That would reduce tax support for the homeowner grants by $428,000, but why even continue awarding the grants when the economic reasons for initiating them no longer exist. Not to mention reducing staffing by as many as 4 FTE, which were hired in 2005 to process the paperwork submitted by grant applicants.

Will the Arlington County Board prove The Gipper wrong? Let’s hope so.

Posted by ElGrowlerGrande at 04:05 PM | Permalink | TrackBacks (0)