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April 28, 2005

AAA Bond Ratings: Hard to Earn, Easy to Lose

Earlier today, bloggers at the Club for Growth included a link to a USA Today article, which noted that "As company priorities shift, fewer get AAA bond rating." The USA Today article identifed the current 8 companies with AAA bond ratings as well as several reasons for the declining number of AAA-rated companies. The paper noted that the "AAA club" might soon be down to 7 members, and is a significant decrease from 1980 to 1983 when 32 "non-financial companies carried" this "gold standard" debt rating. The Arlington County Board rightly trumpets the county's AAA-ratings. However, as ACTA has pointed out on numerous occasions, the ratings are due more to Arlington's strong economy, tax base, and the apparent willingness of Arlington's citizens to pay higher taxes and take on more debt than the financial management of the Board and county staff. This view is supported by our reading of the two 2004 rating agency reports (Fitch's and Moody's -- Adobe required) posted on the county's website. One of the reasons listed in the USA Today article is that companies are "more toleran(t) of risk. As noted in last night's entry about the increasing cost of Washington-Lee High School, it seems that willingness to tolerate more risk has seeped over to local government management. As USA Today also noted, "bad things happen to good companies."

April 27, 2005

Cost of Washington-Lee High School: Beyond $100 Million?

One of the handouts at the School Board's budget worksession this evening (Adobe required) was an internal memo, dated April 21, 2005, from staff to the Superintendent "forwarding updated information regarding the project schedule and probable project cost for Washington-Lee (High School) reconstruction." The memo went on to say, "Since the CIP was approved in June 2004, the estimated cost for the W-L reconstruction project has increased from $82,838,462 to $95,238,500. This represents an increase of $12,400,038, or 15% . . . Although there are adjustments to construction and soft cost estimates, $12.3 million (99.9%) of the total project cost increase is due to escalating costs for construction." For the record, last fall, voters approved (with 80.3% approving) a $78.1 million school bond referenda that included $72.7 million for constructing a new W-L. More details about can be found in the Schools Fiscal Year 2005-2010 Capital Improvement Plan (Adobe required). School Board members seemed opposed to putting another bond issue on the 2006 ballot because it would raise a "credibility issue" with the community. The Superintendent noted that everybody understands the problem of rising costs, and, further, there seems no desire to reduce the scope of the project. When Board members turned to the possibility of setting aside windfalls and other one-time revenues into a capital reserve account, school staff reminded them this represents "borrowing from the community." Stay tuned for more information.

April 25, 2005

Arlington Residents Say "Nyet" to County Board

Thanks to the leadership of ACTA member Wayne Kubicki, about 30 Arlington homeowners turned out to greet the Arlington County Board on Saturday, April 16, during its "public comment" period. We've Growled about the results on two previous occasions -- April 16 and April 17 -- with links to stories in both the Washington Post and Arlington Sun-Gazette. We were presently surprised, though, to learn that the Arlington Connection featured two ACTA members on the front-page of their April 20-26 issue -- complete with their individualized placards. In addition to devoting the entire cover to the two ACTA members, there was another photo with the online story featuring other ACTA members. The 'pullout' quotation also features ACTA member John Berthoud, who said, "Our taxes keep going up and up, and the County Board seems oblivious to the concerns of homeowners." If you would like to receive the Arlington Connection, the paper notes you can request a free copy by calling (703) 917-6465.

April 18, 2005

Happy "Tax Freedom Day," We're Finally Working for Ourselves!

Even though Arlingtonians got sucker-punched by the Arlington County Board on Saturday (see previous two days of Growls), I hope some were able to celebrate "Tax Freedon Day" yesterday, April 17. According to a special report from the Tax Foundation, Americans were finally able to celebrate "the day when Americans will finally have earned enough money to pay off their total tax bill for the year . . . Taxes at all levels of government are included, whether leveled by Uncle Sam or state and local government." The study further notes that "Tax Freedom Day gives Americans an easy way to gauge the overall tax take, a task that can be quite daunting due to the multiplicity of taxes at each level of government, especially the "hidden" taxes and fees that are often buried in the cost of living." Virginians actually were able to celebrate Tax Freedom Day on Saturday, April 16. However, if Governor Mark Warner (D) and Senator John Chichester (R), had not engineered their billion dollar plus tax increase through the 2004 General Assembly, Virginians could have celebrated on April 14. So we have those two big tax-and-spenders to thank for causing us to work two extra days this year. The Tax Foundation's special report provides several nice charts and graphs that put today's tax burdens in a historical perspective. For example, in 1900, the average American worked 8 days to pay their federal tax bill and 14 days to pay their state and local government tax bills. By 2005, the two numbers increased to 70 and 37, respectively. Sheesh!

April 17, 2005

Wash. Post Coverage of Arlington's "Tea Party"

Starting "above-the-fold" on page 1 of today's Washington Post's Metro section, the Post's coverage notes, "Discontent over government spending has been sharper in Arlington and neighboring Arlexandria this year than in recent years as property values have skyrocketed and local spending and pricey capital improvement projects have increased." (The Post really, really said that!) The Post also reported that "real estate tax bills have doubled since 2001" in Arlington. Best part of the story, though, was on page 6 where the Post included a picture of ACTA member Richard Kelsey addressing the Arlington County Board during yesterday's "public comment" period accompanied by fellow Arlingtonians holding up placards containing comments such as "Arlington is Not McDonald's, Don't Supersize My Tax Bill, In 4 Years - 77.6% More Heartburn." We're still confused, though, by the comment of Board chairman Jay Fisette who is quoted by the Post describing the county's new FY2006 budget with words such as "strong" and "constrained." Last night, the Washington Post's story included the color version, taken by ACTA member Wayne Kubicki, of their page 6 picture, but unfortunately they have since taken it down. Let the revolution continue!

April 16, 2005

Can You Spell "Tea Party?"

For anyone who believes in low taxes, limited government, and having government provide only essential government services, this morning's action by the Arlington County Board approving a real estate tax rate that cut the rate only 8 cents but leaves the average Arlington homeowner still paying a tax bill 13.6% more than last year can only be described as outrageous. Thanks to the initiative of ACTA member Wayne Kubicki, the Board was greeted with an "Arlington tea party" this morning as about 30 people, including several ACTA members, showed off placards carry such messages as "My Taxes are Up 54% in 4 Years, Where can I get my 54% Increase in Services? and "Minor Hill Townhouse . . . With Major League Tax Bill!" The Arlington Sun-Gazette (to be dated April 21, but already online) has a nice write-up of the meeting. We also anticipate a picture in next week's Arlington Connection since their reporter took pictures that included the tax protest placards. If you prefer the county's version, read their press release, which touts that they "focused" on "targeted tax relief and affordable housing." Will the Board's action this morning start a revolution in Arlington? Perhaps not, but oak trees begin from small acorns. Have no doubt, ACTA will have more to say about this morning's Board action in the days ahead!

April 12, 2005

County Board Says Nyet on Cutting Real Estate Tax Rate

In their final wrap-up budget worksession this morning, the Arlington County Board decided "it will approve an 8-cent tax rate reduction, dropping the rate from 95.8 cents to 87.8 cents per hundred dollars of assessed value," according to the county's press release issued after the Board's morning meeting. It will officially approve this rate when it adopts the Fiscal Year 2006 budget on Saturday. Buried near the end of page two of the press release is a key fact that all Arlington homeowners need to keep foremost in mind when they vote in November: "with the 8-cent tax reduction, taxes for the average residential property will increase 13.6 percent." Keep in mind that while inflation over the past year has been under 4%, the average home increased 24% in value. Guess the Board's new policy is that it's now more important to plunder the taxpayers and feed the beast of government rather than being fiscally responsible with the taxpayers' money!

April 11, 2005

Outlook not Good for Significant Cut in Real Estate Tax Rate

A press release this morning from Arlington County reported on the results of the first of two Arlington County Board "wrap-up" budget worksessions.The release noted the Board "endorse a comprehensive package of measures addressing housing affordability and homeowner tax relief -- most significantly, a program that could reduce or freeze tax bills for an estimated 3,500 Arlington households. We growled about on this so-called targeted tax relief homeowner grant program last week, and according to the press release, the Board adopted the program much like the Manager proposed. Assuming the Board adopts the remainder of the Manager's budget, the Board would cut little more than the Manager's proposal, which was to cut the real estate tax rate by 5 cents. As we noted last week, the Civic Federation prepared a budget balanced with a cut of 11 cents while Arlington's Sharp Pencil is guessing a final rate cut of 7 to 8 cents. This week's Sun-Gazette's "Political Notes" (currently online) also contains several predictions.

The Board's second "wrap-up" budget worksession is schedule for tomorrow morning. Two years ago, ElGrowlerGrande attended the Board's final wrap-up worksession, and notes the Watchdog editor called it the "potlatch affair" where the Board rewards various special interest groups with small presents. Tomorrow's meeting is expected to be much the same.

April 10, 2005

Caps Not Needed. Just Cut the Tax Rates!

An editorial in today's Richmond Times-Dispatch takes dead aim at the Arlington County Board, and this week's decisions (formally on Saturday, April 16) by the Board regarding the new tax rates and budget for Fiscal Year 2006, which starts July 1. The editorial takes note of how much the Board may cut Arlington's real estate tax rate and the tax plan of gubernatorial candidate Tim Kaine (D), which calls for a consitutional amendment allowing local governments to exempt up to 20% of homeowner assessments as a "homestead exemption." Cutting directly to the chase, the editorial closes by asking, "Doesn't the Constitution already allow local officials to cut the tax rate by however many percentage points they wish?" Perhaps the recent run-up in property taxes will help voters focus on the fact that the amount of property taxes is a function of both increased assessments, which the Board has little control of, and tax rates, which the Board has complete control of. If so, the Board will find it more difficult to continue singing their "we have the lowest tax rate in the region" song.

See Gary Brookins' cartoon, which accompanied the above Times-Dispatch editorial.

April 09, 2005

Understanding the Competing Tax Plans

The two major gubernatorial candidates in November's election have released plans to provide tax relief for Virginia's residential property owners. We growled about the two plans on Monday, based upon a Richmond Times-Dispatch column. Now comes Arlington's Wayne Kubicki to shed a bright light on the competing plans of Jerry Kilgore (R) and Tim Kaine (D). In a letter to the editor in Thursday's Richmond Times-Dispatch, on which the paper bestowed their "Correspondent of the Day" award, Kubicki makes two key points. First, he addresses the whining of a lobbyists for local governments that the tax plans will cause revenue problems for local government officials, but Kubicki notes that neither plan caps the tax rates, which are controlled by city and county officials. Kubicki's second point is that both plans will change the direction of who shares the burden of the real estate property tax. He notes that over the past four years in Arlington, residential assessments have risen three to four times faster than commercial assessments. Just asking, but why haven't Arlington's Grand Pooh-Bahs been making this point? Instead, they keep repeating the "lowest tax rate in the region" mantra.

For additional reading on the competing tax plans, here's analysis from the Augusta Free Press, the Washington Post, and the Roanoke Times. And here's a Washington Times article explaining the tax relief offered by Delegate Jeff Frederick from Prince William County.

April 08, 2005

Oink, Oink! Arlington Feeds from Congressional Pork-Barrel

Citizens Against Government Waste (CAGW) released their 2005 Congressional Pig Book earlier this week. According to the CAGW press release, the "little book" is "a compendium of the pork-barrel projects in the federal budget," which this year amounted to $27.3 billion for 13,997 projects. Pork projects, or 'earmarks' as they are sometimes referred to, allow members of Congress to bypass the normal budget process. Seven projects totaling a little over $2 million are 'earmarked' for Arlington from the fiscal 2005 federal budget:

Gang Supression, $250,000
Sheriff's office, test a geo-location network, $100,000
Arlington Free Clinic, facilities and equipment, $375,000
Marymount University, scholarships for dual certification, $100,000
Shirlington Incubation Center, economic development, $97,000
Arlington Housing Corporation, property acquisition, $97,000
Four Mile Run, watershed improvements, $1 million, split with Alexandria

You can access all 13,997 projects or 'earmarks' at their searchable database (keyword = Arlington).

To repeat the Voltaire quote we used yesterday, " . . . the art of government consists in taking as much money as possible from one class of citizens to give to the other." Or as the CAGW noted in their press release, "The true legacy of pork is its contribution to the $7.8 trillion national debt." If you really want to confuse your Congressional representatives, ask where in the Constution they find the authority to make such 'earmarked' appropriations.

April 07, 2005

Arlington County Board -- Master Artists?

Yesterday, we blogged about the Manager's proposed initiative to provide "targeted" tax relief to selected homeowners. This initiative, if adopted by the County Board on April 16, confirms something Voltaire said about government more than two centuries ago, and would confirm for us that the Board's Pooh Bahs are indeed master artists. Voltaire said, according to OnPower.org, " . . . the art of government consists in taking as much money as possible from one class of citizens to give to the other." Unfortunately, in Arlington, the Grand Pooh Pahs have convinced the masses that they are doing good and meeting our unmet needs. Sheesh! A hat tip to the National Taxpayers Union's new blogsite for the pointer to the Voltaire quote.

April 06, 2005

Tax Relief, or More "Feel Good" Spending

In an effort to provide tax relief to Arlington's needier homeowners, the County Manager included a "targeted homeonwers' grant" in his FY2006 proposed budget (tab A, page 16), which would be paid for with 1/2-cent of your taxes. Unfortunately, the Manager's guidelines raise the question of who is being helped. For example, the Manager's initial guidelines in the budget would help anyone making less than $72,000 of income, or having less than $240,000 (for exemption) or $340,000 (deferral) of assets, not including the value of your home, be eligible for a $500 grant. The County Board chairman also appointed a task force to advise the Board on this particular grant program. According to the March 31 Arlington Sun-Gazette, there was little unanimity among the members on who should receive these grants. In addition, the ACTA president attended one of the task force's meetings, where county staff told the task force that four new county staff would need to be hired to review the paperwork for grant eligibility. At last night's Civic Federation meeting, delegates were equally split on the merits of whether the program provided tax relief, or just another 'feel good' county program. As with virtually all county programs, once implemented, it is not likely to go away after a few years.

April 04, 2005

Tax Relief is Good; More Tax Relief is Better

Yesterday's Richmond Times-Dispatch contained a useful analysis of the hurdles faced by the tax-relief plans put forth by the two major candidates for Virginia governor. According to the newspaper, the candidates "will have to change a lot of minds if they hope to get their proposed constitutional amendments offering tax relief through future General Assemblies." The article notes a bill identical to Republican Jerry Kilgore's "proposal to limit property-tax-assessment increases to 5 percent a year was dismissed out of hand by the 2005 General Assembly" while a variation of Democrat Tim Kaine's "proposal to allow local government to grant a homestead exemption to homeowners fared better. It got out of committee and passed the House of Delegates, but it ran into a formidable obstacle: the Senate Finance Committee." The dueling tax-relief plans should make for vibrant political campaigns as we move to November. In the meantime, we urge taxpayers to evaluate both plans against the plan put forth by Virginians Over-Taxed on Residences (VOTORs).

April 03, 2005

"Unhappy about Gas Prices?" Call Congress!

Everyone likes to blame foreign oil producers or to "demonize" the big oil companies. However, the biggest beneficiary when you fill-up at your local gas station is non-other than politicians, according to the head of the National Taxpayers Union. He also writes that "Of course for some, such as Chairman of the House Transportation Committee Don Young (R-Alaska), that's not enough. Mr. Young wants to take even more of your money and raise taxes even higher!" According to the graphic at this blogsite, taxes take 23% of the average gallon of gas. Keep up to date with all the efforts of the political elites' efforts to plunder taxpayers at NTU's new blogsite.