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February 29, 2008

Politicians Reorganizing for Next Attack on Taxpayers?

The Virginia Supreme Court, in a ruling today (requires Adobe), saves taxpayers and the Virginia Constitution from politicians. But let Kristina Rasmussen of the National Taxpayers Union say it much better in this press release, than ElGrandeGrowler:

"Today's Virginia Supreme Court decision marks a well-deserved victory for the Commonwealth's taxpayers. America is founded on the principle of no taxation without representation, and Virginia's Constitution allows the allocation of taxing powers only to directly elected legislative bodies and units of government. The law we challenged in this case (HB 3202) bestowed the ability to tax upon two bureaucratically structured regional authorities in Northern Virginia and Hampton Roads. Simply put, the Northern Virginia Transportation Authority (NVTA) was not an elected entity. Even so, NVTA tried to levy $300 million in new taxes on local residents, and began collecting taxes at the start of 2008.

“This ruling puts a halt to the insidious practice of subjecting the electorate to higher taxes at the hands of people they never had a chance to vote for (or against) at the polls. The decision also sends a strong message to the Virginia General Assembly that it can't wantonly disregard the rights of taxpayers in attempts to find politically expedient revenue sources. This case wasn't decided on a technicality, and the Court's unanimous decision stands as a serious rebuke to lawmakers. This need not have happened if elected officials had actually read the Constitution they swore to uphold before passing HB 3202. Equally important, the decision provides a clear warning to over-reaching legislatures in other states.

“The homeowners, small business owners, motorists, and taxpayers of Northern Virginia look forward to having the 'null and void' taxes levied by the NVTA refunded to them."

The transportation plan was challenged by Delegate Bob Marshall (R-Prince William), among others, according to the DC Examiner, which also  wrote:

“The court agreed with Marshall's contention that the Virginia Constitution allows only officials directly elected by the people to levy taxes.”

Although the county government is unable to build a fire station in 10 years even though voters approved the bonding authority, and it needs perhaps five years to install a 4-way stop sign after being requested by a civic association, the Courthouse Gang (aka the Arlington County Board) was able to produce this press release in less than eight hours. Will wonders never cease? Is the vaunted Arlington Way dead? Could the Gang of 5 (aka the Arlington County Board) be reorganizing another attack on taxpayers?

In addition to the Examiner’s news coverage, here is additional coverage of the story: Washington Post (here and here) and Washington Times. In addition, the Tax Foundation has a much better explanation, including a link to their recent report, for those wanting a more technical explanation. Rather than covering the politicians whining about the Virginia Supreme Court decision, the news media should be covering the real bad guys, i.e., the politicians who ignored the Virginia Constitution and unlawfully plundered Virginia taxpayers.

We take this opportunity to thank Delegate Bob Marshall and all the others who contributed their time and money to this important effort on behalf of taxpayers.

UPDATE (4/17/08): A friend from the Cherrydale Citizens Association tells me that the "10 years" in the third paragraph should actually be "17 years." 

February 28, 2008

Spinning With County Press Releases

Arlington County issued a press release today touting a work shop offering home buying and financing tips. The press release says:

“ With the nation's housing market in a slump and credit tightening, many would-be buyers are looking for tips on how to make their dream of home ownership a reality.

“Arlington County government can help!

“Did you know there is a County program that offers up to $25,000 in down payment and closing costs assistance for moderate-income first-time home buyers? That there are special mortgage programs for Arlington County municipal employees (including local government, school board, and law enforcement officers)?”

How about that? A program to help a national crisis become an Arlington County  taxpayer crisis by fronting $25,000 of taxpayer funds to borrowers seeking to make risky investments? So Arlington County wants to join the national crisis, which fortunately has mostly missed us, by encouraging citizens to buy homes they can’t afford by fronting downpayments so any dip in prices will leave them owing more than the house is worth. Walk away time, eh? Taxpayers lose their contribution while the homebuyers lose their credit rating.

Is this the same Arlington County that was pleading poverty two days ago when they issued this press release that accompanied the Manager’s proposed FY2009 budget?

What a county. Poor one day, but able to front $25,000 downpayments the next. How do they do it? Do they have too much money or just too many idle ‘planners’ charged with finding ways to spend it? 

February 27, 2008

Still Whining With An 8% Tax Rate Increase

As we Growled on Monday, politicians never have enough of our tax money to spend. Yesterday evening, the County Manager proposed his budget for Fiscal Year 2009. And while the Arlington County Board will tell you they only advertised a 2-cent increase in the real estate tax rate, it means a computed “effective tax rate increase” of 6.2%.

However, that does not include a 1.4 cent increase in the real estate tax for stormwater management and/or  sanitary district, which they also voted to advertise last night. Together that effectively increases the real estate tax rate on residential property of 8%. Nor is the 12.5 cent real estate tax on commercial properties for  "transportation purposes” included in the computed effective tax rate increase.

The bottom line is that the Grand Poobahs on the Board will have more means to slither out of accounting for the real tax burden they impose on Arlington County taxpayers. In dollars, according to Wayne Kubicki, Arlington's Uber-Taxpayer Watchdog, the County Board will have about $63 million more to play with this year, if they approve all advertised tax/fee increases.

The FY2009 budget documents were not available until after last night’s Board meeting concluded at 10:30 pm. If you wish to be alerted to future Growls about the FY2009 budget, e-mail ACTA's president (president + acta.us).

In the meantime, here is the initial FY2009 budget news reports from the Arlington Sun-Gazette, the Washington Post, and Arlington County’s press release. Especially noteworthy in the reporting was the Post's sub-heading -- "decade-long spending spree ends." (emphasis added)

The same as years past, the county budget is available in two large budget books. However, the Manager and Chief Financial Officer are to be congratulated for producing a 114-page executive summary, which may be  far more understandable for citizens not familiar with more arcane format of the larger books. All three documents are available at the Department of Management & Finance’s website.

February 25, 2008

Do Politicians Ever Have Enough to Spend?

The San Jose Mercury News reports today:

“ Gov. Arnold Schwarzenegger and seven other governors vowed Sunday to press the Bush administration, Congress and the presidential candidates to commit more federal spending to upgrade the nation's roads and bridges.

“They plan to lobby Bush officials and members of Congress today as the National Governors Association holds a conference in Washington. The governors will meet with President Bush this morning in the White House and will call for infrastructure spending to be part of any new economic stimulus package.

“Schwarzenegger, a Republican, and Gov. Ed Rendell, a Pennsylvania Democrat, last month formed a bipartisan coalition called Building America's Future, along with New York Mayor Michael Bloomberg, an independent. Citing crumbling roads nationwide and last year's bridge collapse in Minneapolis, the group seeks a big boost in spending on such projects.”

It’s time for taxpayers to tell politicians they have enough of our hard-earned money, and they need to start learning how to prioritize the money they currently plunder from us. Looks like this NEA is another special interest group just like the other NEA (the teachers’ union’s National Education Association). And don’t you just like the attitude of California’s governor, who is quoted saying:

"We are going to ask the federal government, we are going to inspire them, we are going to force them to rebuild our infrastructure." (emphasis added)

Sheesh!

H/T to Foundation for Economic Education.

February 24, 2008

Congratulations Arlington 6th Grade Recyclers

Each Saturday, the editorial staff of the Washington Times awards its “Nobles and Knaves” of the week. Yesterday, their Nobles were a group of:

Arlington sixth-graders who led a curbside-pickup recycling program during their free time.” (emphasis added)

Here is how the Times’ editorial explained their selection for Nobles of the Week:

“When students at H-B Woodlawn Secondary Program noticed litter clogging up Windy Run stream, they wanted to help clean it up. But what they actually accomplished was much more impressive. First, they determined that Arlington's drop-off recycling program wasn't working. They surveyed local parents and found that the options available to residents — which included hauling recyclables to a facility and sometimes paying fees for discarded electronics — were leading many to simply toss their unwanted goods.

“The students then planned their own program: "We'll Bring it to You." Last March, the kids — with the help of some high-school students, parents and teachers — provided their own recycling pickup service. The Arlington County Board even waived the fees for recycling electronics. Not only did they help clean up their town, but the students were also awarded the Mid-Atlantic region's 2007 President's Environmental Youth Award from the Environmental Protection Agency as well as the Staples Earth Force Award, which earned the school $1,000. They will be honored at award ceremonies in March and April.

“For showing that every little bit helps in cleaning up the environment, the sixth-graders at H-B Woodlawn Secondary Program are the Nobles of the Week.”

Let’s hope the county employees who are paid to design and operate the county’s recycling programs learn a thing or two from these Nobles of the Week.

February 23, 2008

Arlington County Taxpayers Achieve a Victory

On Monday, we Growled about an indulgent Arlington County plundering its hardworking taxpayers so staff could ship a World War II tin-can house to New York City’s Museum of Modern Art for a summer exhibit. We noted that staff was asking the Arlington County Board to approve $60,000 for the project.

So even though the Board in 2006 approved acquisition of the home, this morning, the Board virtually killed any further effort to use taxpayer money to ship the house to NYC for exhibit at the MoMA. Here are the first three paragraphs in the online Arlington Sun-Gazette, as reported by Scott McCaffrey’s:

“After facing a mini-rebellion from the public, County Board members have decided Arlington taxpayers won't be asked to spend nearly $60,000 in support of a New York City museum's art exhibition.

“Board members removed the appropriation from consideration prior to the Feb. 23 board meeting, and made it plain they won't try to sneak the appropriation through any other way.

“It's our intention not to spend any public funds,” board member Mary Hynes said.”

A hearty thanks for the victory this morning is owed to fiscal watchdog Wayne Kubicki, according to the Sun-Gazette’s McCaffrey. Taxpayers should also thank the the Arlington County Republican Committee for sending “a pre-recorded phone message to local residents, alerting them to the situation and urging them to contact county officials in opposition.”

By the way, the County Board had already removed the item from their consent agenda even before the meeting started. Consequently, the link, which Growls referred to on February 18, will no longer access the Manager’s report. However, the report posted yesterday by the Sun-Gazette provides much of the background.

February 22, 2008

Presidential Wisdom on Taxes

Tax Foundation blogger Alicia Hansen posted a list of tax quotes by various American presidents in honor of this year’s Presidents’ Day, February 18:

  • Excessive taxation ...  will carry reason and reflection to every man's door, and particularly in the hour of election.
        — Thomas Jefferson
  • The taxpayer—that's someone who works for the federal government but doesn't have to take the civil service examination.
        — Ronald Reagan
  • The goal to strive for is a poor government and a rich people.
        — Andrew Johnson
  • A government which lays taxes on the people not required by urgent public necessity and sound public policy is not a protector of liberty, but an instrument of tyranny. It condemns the citizen to servitude.
        — Calvin Coolidge

Here’s guessing that President Andrew Johnson would be shocked to find out just how rich today’s government is. And just how close are we to the tyranny and servitude that President Calvin Coolidge talked of?

For those of us who were around beofore the start of Presidents' Day, today is the birthday of the nation's Founding Father, George Washington. 

February 20, 2008

2007 "Porker of the Year" Named

It probably won’t come as much of a surprise to most Arlington County taxpayers that Citizens Against Government Waste named Rep. John Murtha (D-Pa) their “Porker of the Year” today. Details are in this CAGW press release. Murtha “won in a landslide victory, receiving 63.4 percent of the vote. A distant second, Rep. Don Young (R-Alaska) received 10.6 percent . . .”

Here is a bit of explanation of why Murtha won his award:

“Rep. Jack Murtha has long been known inside the Beltway for using threats, power plays, and backroom deals to control spending decisions.  There is an area of the House floor known as “Murtha’s Corner,” where the legendary appropriator dispenses earmarks.  The overwhelming vote for Porker of the Year vote shows that his shameful behavior is attracting attention throughout the country.  The congressman inserts pork whenever he can to serve himself and his district.  In fiscal year 2008, he brought home 72 pork projects worth $149.2 million.”

Kinda makes Arlington’s own Rep. Jim Moran seem like a piker by comparison!

February 19, 2008

Homestead Amendment as Tax Relief

As homeowners saw their property taxes ratchet-up in the first half of this decade, Virginia’s politicians galloped in and proposed tax relief measures. Voters will recall the 2005 Virginia gubernatorial candidates proposed competing tax relief proposals. Gov. Tim Kaine (D) supported a homestead exemption constitutional amendment while Jerry Kilgore (R) proposed a 5% cap on annual increases of the assessed value of residential property.

With a distinct possibility that voters will see such a proposed constitutional amendment on the ballot in November, the January 2008 issue (requires Adobe) of The Virginia News Letter contains a detailed analysis of the problems with such an amendment. It is written by John Knapp, Professor Emeritus at UVa and an expert in Virginia state and local finance.

Although there is a great deal of analysis, following is just a portion of the conclusion:

“The proposed homestead amendment would represent a major change in Virginia local government finance sine it is aimed at the real property tax, the most important single source of locally raised revenue . . . Given the large rise in property tax levies during most of the new century, it is not surprising that taxpayer frustration has found its way into the proposed amendment. It is unfortunate that a simpler solution -- restraint on spending by local government -- was not adopted. Instead, market-driven increases in assessed values were used to bring in  significant amounts of new revenue.”

We’ve said it before, but it bears repeating: Arlington County does not have a revenue problem, but rather has a political elite that is unable to control its urge to splurge!

February 18, 2008

An Indulgent Arlington County, Today’s Example

Author and journalist H. L. Mencken once said:

“All government, in its essence, is organized exploitation, and in virtually all of its existing forms it is the implacable enemy of every industrious and well-disposed man.”

So how many industrious and hard-working Arlington taxpayers are being plundered “to loan and transport” a World War II era, all metal house to the Museum of Modern Art in New York City this summer? But think of it, only 2,680 of the homes were built in the late 1940s, and “Arlington only has five remaining of its original eleven.” Besides, the one being loaned to MoMA “is a Westchester Deluxe 02 model,” acquired in 2006 when the County Board “unanimously accepted (its) donation.”

On Saturday, February 23, the Arlington County Board is being asked to approved spending almost $60,000 to transport the house to New York City, and then return it to Arlington. Here’s the “fiscal impact” statement from consent item 23 of the Board’s Saturday, February 23 agenda:

“MoMA has earmarked $16,000 for Arlington County to transport the Krowne Lustron House to and from its present location to MoMA in NYC and for the assembly and disassembly of the Krowne Lustron House at MoMA.  This amount is not, according to estimates prepared by the Historic Preservation Program staff, enough to accomplish these goals.

“A draft budget has been developed and the cost of this total project is $75,600.  Deducting the $16,000 that MoMA is contractually responsible for, the total project cost to Arlington County becomes $59,600 (see Attachment 4).  This $59,600 would be dedicated from the existing FY08 Historic Preservation Program budget.  Of the $59,600 amount, $7,000 would be from the FY07 Carryover; $59,600 from the currently uncommitted Historic Preservation Program Consultant fund.

“The draft budget is limited to expenses directly related to the shipping, assembly, and disassembly of the Krowne Lustron House at the MoMA for its July 15 – October 20, 2008 exhibit.  It does not include any expenses related to the opening festivities of the exhibit or any other social activity surrounding this exhibit.  It also must be understood that this draft budget is for a project that has no precedence here or elsewhere in the country.  It incorporates the best planning estimates by staff, in consultation with our Indiana and Ohio, as well as with staff at MoMA.”

Yet the solons on the Board keep getting reelected!

February 17, 2008

And The Meaning of “Progress” Is?

Not to mention the meaning of “live dialogue,” another term used by an Arlington County Board member to describe the twists and turns on the relocation of the Cherrydale fire station, according to a July 9, 2007 report in the Arlington Sun-Gazette. The paper also noted that Arlington voters had:

“approved two separate bond issues to help fund the project, in 1990 and 1994.”

A report by the newspaper the previous month said that:

“After an extensive, and noisy, public process, board members in late 2004 agreed to spend $4.5 million to purchase part of the Koons site, and spend another $5 million to construct a two-story, three-bay fire station on it.”

It was no surprise, therefore, that Civic Federation delegates wanted to know the status of the new  Cherrydale fire station when the County Board made their annual visit on February 5, 2008. According to the February 7, 2008 Sun-Gazette:

“County officials say they are “making progress” but still do not have a deal in place to move forward with construction of a new fire station in Cherrydale.

“We are confident that a shovel will be in the ground soon,” County Board Vice Chairman Barbara Favola told delegates to the Arlington County Civic Federation on Feb. 5.

“It's likely that no one will be more happy to see that day come than Favola. She was County Board chairman in 2004, when community anger over delays and the location of the project spilled into open verbal warfare with county officials.”

The paper also reported:

“When the land-swap agreement with Koons was announced in 2004, county officials estimated it would take 30 to 36 months to design and build the new fire station. That three-year period has come and gone, and no dirt has been turned.

“The bottom line is, land-swap deals are extraordinarily complicated,” Favola said. “We are making progress.””

Anyone taking bets on whether a shovel will be in  the group before the end of the year?

February 16, 2008

Some Sense in Richmond

With a projected shortfall of $1.4 billion in the budget for 2009-2010, one would think the solons of Virginia government would be looking to neither start or expand programs. Unfortunately, that would not be what is going on. This morning’s Washington Post reports:

“Because of a projected $1.4 billion shortfall in Kaine's 2009-2010 budget, GOP leaders say they will focus on paying for existing programs, such as public education and aid to local governments, instead of starting new programs or expanding existing ones.

“Kaine (D) and Senate Democrats say they will fight to protect the governor's priorities, setting up a battle over the budget in the remaining three weeks of the legislative session.

“Senate Democrats also said they would fight for transportation funding. On Friday, the Senate voted 25 to 15 to approve an increase in the state's gas tax by a penny a year over the next five years. House Republicans oppose the idea.”

In addition, the Post reports:

“Kaine wants to close the budget shortfall by transferring money from the state's reserve fund and cutting money for school construction by more than $100 million. He also would cut aid to local governments by 5.4 percent and reduce grants to public colleges and universities by 2 percent.

“But Kaine also is proposing an estimated $400 million in new spending, ranging from new wastewater treatment plants to an expansion in a program that pays for mammograms for the poor.”

But the common sense is this quote by House Speaker Bill Howell (R-Stafford):

“This is not the time to be doing new programs.”

Stay tuned as the two parties battle over how to divvy-up the taxes we pay.

February 15, 2008

Cost of Government Benefits

Yesterday’s USA Today reported that the costs of senior benefits have increased 24%, after inflation, since 2000. According to the newspaper:

“The cost of government benefits for seniors soared to a record $27,289 per senior in 2007, according to a USA TODAY analysis.

“ . . . Medical costs are the biggest reason. Last year, for the first time, health care and nursing homes cost the government more than Social Security payments for seniors age 65 and older. The average Social Security benefit per senior in 2007 was $13,184.”

USA Today’s report provided two additional facts of interest:

  • “The cost of senior benefits is equal to $10,673 for every non-senior household.”
  • “About 35% of the federal budget is spent on senior benefits, up from 32% in 2004.”

Unfortunately, in trying to provide perspective, the report contained quotes by a lobbyist for the AARP and the liberal Center for Economic Policy and Research (CEPR), which do nothing to further inform discussion. According to the AARP lobbyist, there’s a health care crisis rather than an entitlement crisis. And an economist with the CEPR equates focusing on the cost of senior benefits to “granny bashing.”

A comment by a blogger at Citizens Against Government Waste correctly identifies the problem of entitlements for seniors:

“When the current elderly were younger, they were supporting their elders.  Just as today’s youth is supporting the current elderly.  The problem is that the youngest generation can not expect to receive the same benefits when they grow older because the proportion of workers to retirees is getting smaller.”

On the topic of income redistribution, an article in the December 1994 issue of The Freeman provides a worthwhile discussion of the many "neglected consequences of income redistribution." 

February 14, 2008

How Cost Efficient Are The Arlington Public Schools?

ACTA has long argued that Arlington’s motto should be “ordinary services at extraordinary prices.” And now we have proof of that assertion.

The Clare Booth Luce Policy Institute recently completed a study the rated “the cost efficiency of Virginia school districts.” The study placed APS in the “good achievement” category (the second of four), but also placed it in the “worst price” category (the lowest of four categories). Three other Northern Virginia county school districts made it into the “good achievement” category (Prince William, “best price”, with Fairfax and Loudoun rated “moderate price”).

The study’s author, Lil Tuttle, a former member of the state board of education, notes that Gov. Kaine (D) recently told the General Assembly finance committees:

“As public servants, one of our obligations is to give Virginians our guarantee that we are putting their tax dollars to the best and highest use by providing services and programs that meet our standards for excellence.”

She concludes the report’s executive summary by writing:

“The Commonwealth of Virginia does not currently assess the cost-efficiency of its public school districts. Absent such an assessment, the Governor and state legislators can make no guarantee to Virginians that tax dollars devoted to the state’s public school system are being put to the best and highest use.”

If our elected officials are unable to tell taxpayers exactly how efficiently our tax dollars are used, why should taxpayers consent to having our tax dollars pour into inefficiently run school districts?

The Arlington Sun-Gazette reported on this study in January.

February 13, 2008

Taxes and Migration

Yesterday’s Wall Street Journal contained a “review & outlook” article, which looked at migration patterns, and whether taxes are a motivator in why people move from one state to another. The column begins:

“An old adage says high taxes don't redistribute income, they redistribute people. For new evidence look no further than migration patterns within the United States, as documented in a new survey by the moving company United Van Lines.”

While admitting that people move for a host of reasons, they make a strong case “to conclude that taxes are also a motivator is because the eight states without an income tax are stealing talent from other states.”

The column has a warming for politicians who seem to think nothing of adding a tax here or “enhancing” a tax there. The following two paragraphs should be required reading by our legislative solons not only in Richmond but by Arlington’s grand poohbahs as well.

  • “Politicians who think taxes don't matter might want to explain the Dakotas. North Dakota ranked second worst in out-migration last year, while South Dakota ranked in the top 10 as a destination. The two are similar in most regards, with one large difference: North Dakota has an income tax and South Dakota doesn't.”
  • “Our friends on the left say Americans are willing to pay more taxes to get better government services, but their migration patterns reveal the opposite. Governors would be wise to heed these interstate migration trends as they try to cope with what may be one of the worst years in recent memory for state finances. The people who tend to be the most mobile in American society are the educated and motivated -- in other words, the taxpaying class. Tax them too much, and you'll soon find they aren't there to tax at all.”

Carpe Diem makes much the same point. A few reader comments are especially interesting.

February 09, 2008

The Nation’s Unsustainable Fiscal Path

Is the nation’s long-term fiscal outlook as bad as many think? Are our politicians leading us over a cliff? According to this testimony before the U.S. Senate’s Committee on the Budget, David Walker, Comptroller General of the United States says, “Action is needed to avoid the possibility of a serious economic disruption in the future.” Here’s an excerpt from the summary of the report:

“As we enter 2008, what we call the long-term fiscal challenge is not in the distant future. Already the first members of the baby boom generation have filed for early Social Security retirement benefits—and will be eligible for Medicare in only 3 years. Simulations by GAO, the Congressional Budget Office (CBO), and others all show that despite a 3-year decline in the budget deficit, we still face large and growing structural deficits driven primarily by rising health care costs and known demographic trends. Under any plausible scenario, the federal budget is on an imprudent and unsustainable path.”

“Rapidly rising health care costs are not simply a federal budget problem; they are our nation’s number one fiscal challenge. Growth in health-related spending is the primary driver of the fiscal challenges facing the state and local governments. Unsustainable growth in health care spending is a systemwide challenge that also threatens to erode the ability of employers to provide coverage to their workers and undercut our ability to compete in a global marketplace. Addressing the unsustainability of health care costs is a societal challenge that calls for us as a nation to fundamentally rethink how we define, deliver, and finance health care in both the public and the private sectors.

“The passage of time has only worsened the situation: the size of the challenge has grown and the time to address it has shrunk. The longer we wait the more painful and difficult the choices will become, and the greater the risk of a very serious economic disruption.”

After reading the entire report, you’ll wonder just what your Congressional representatives are thinking when they vote on appropriations bills. If you prefer that GAO send you a copy of the report, visit the General Accountability Office’s website, and order report GAO-08-411T. The main switchboard number on Capitol Hill is (202) 224-3121 if you wish to call Senators Warner or Webb or Representative Moran.

February 08, 2008

A Matter of Perspective

As reported in both the Richmond Times-Dispatch and the Roanoke Times, the effort to provide tax relief to Virginia's residential homeowners through the “homestead exemption” (SJ6) ground to a halt yesterday in the Virginia General Assembly’s Senate Finance Committee on an 8-8 vote.

A constitutional amendment passed in the 2007 General Assembly, and must be passed a second time before it can be put on the ballot in November 2008. Last week, the Republican-controlled House of Delegates voted unanimously to pass their version of the bill. However, Sen. Chuck Colgan (D-Manassas), committee chairman, “cast the swing vote on the panel, which otherwise voted along party lines,” reported the Roanoke Times.

The Richmond Times-Dispatch reported:

“Industrial and corporate interests oppose the amendment, fearing it could drive up their taxes. The Council on State Taxation, a business organization, described the proposal as a ‘tax shift, not a tax cut.’”

In their reporting, the Roanoke Times wrote:

“Colgan, who also voted against the amendment last year, said he shared concerns raised by business leaders. Even though the amendment merely gives localities the option of offering the tax break, Colgan said political pressure would be hard for local governments to withstand.”

For Arlington, tax relief was needed earlier in the decade when assessments were skyrocketing, but what is really needed is a means of controlling local spending.

February 04, 2008

"Where (Do U.S.) Oil Imports Come From?"

With gas prices bouncing on both sides of $3.00 a gallon recently, politicians of both stripes talk about “energy independence.” As Ray Keating, chief economist for the Small Business & Entrepreneurial Council, writes, that it is nothing but a:

“bit of political hyperbole (that) seems focused on pandering to certain voters on such topics as trade, energy prices and, in particular, the war against terrorists (including in Iraq) and the general state of affairs in the Middle East. The underlying assumption seems to be that all of our oil comes from OPEC members in the Middle East.”

So what are the facts? Based upon data from the U.S.Energy Information Administration, Keating says the U.S. produces 5.1 million barrels (34%) of crude oil per day while importing 10.1 barrels (66%) per day. The top five countries we import from on a daily basis are:

  • Canada - 1.8 million barrels
  • Mexico - 1.6 million barrels
  • Saudi Arabia - 1.4 million barrels
  • Venezuela - 1.1 million barrels
  • Nigeria - 1.0 million barrels

In total, he says 79% of all imported crude oil came from non-Middle East OPEC countries in 2006. Keating concludes by writing that energy independence requires:

“two things on the policy front. First, remove governmental restrictions on domestic energy exploration, development and production. Second, allow for free trade so that U.S. consumers and businesses are able to meet their energy needs in the international marketplace.”

The next time you hear a politician talking about “energy independence,” ask her or him what they mean by “energy independence,” how they plan to achieve it, and how likely it is that America will achieve energy independence? The answers should tell you a lot.

February 02, 2008

Where Does Arlington County Stand Against The Others?

By “others,” I mean America's 50 state and 87,525 local governments for which the U.S. General Accounting Office says they face “growing fiscal challenges (that) will emerge during the next 10 years.”   In a January 2008 report (requires Adobe), the Comptroller General, head of the GAO, says:

“In speeches and presentations over the past several years, I have called attention to our large and growing federal fiscal challenge and the risks it poses to our nation’s future.  For over a decade GAO has run long-term simulations showing that absent a change in policy, the combined effects of demographic changes and growing health care costs drive ever-increasing federal deficits and debt levels , , , The findings . . .  new simulations indicate that the state and local government sector faces fiscal challenges that in many ways mirror those of the federal government.  In particular, GAO has found that in the absence of policy changes, large and recurring fiscal challenges for the state and local sector will begin to emerge within a decade.”

While both Arlington and Virginia are in better shape fiscally than many other state and local governments, the report’s message is clear: now is not the time for state and local governments to be undertaking new programs or to be enhancing existing programs. Yet that is just what the Arlington County Board and Virginia government are inclined to do. For example, Virginia Gov. Tim Kaine (D) continues to push his so-called universal pre-K program. And as growled here last Saturday, members of the Virginia General Assembly want more taxpayer money allocated to a slew of state programs.

Virginia’s state and local politicians should heed the following advice of the Comptroller General:

“Addressing the nation’s long-term fiscal imbalances constitutes a major challenge for all levels of government.  There are no “quick fixes,” and all levels of government need to work in tandem to address the complex and interrelated reforms that need to be made.  Continuing on this unsustainable path will gradually erode, and ultimately damage, our economy, our standard of living, and potentially our domestic tranquility and national security.  This is a challenge that needs to be addressed with a greater sense of urgency by policymakers since time is currently working against us.”

The question is whether the politicians follow that advice, or will America’s citizens need to take back their government from the political elite?

February 01, 2008

The Things Government Does With Your Taxes

In testimony before the U.S. Senate’s Subcommittee on Federal Financial Management, Government Information, Federal Services, and Homeland Security, the U.S. General Accountability Office (GAO) found:

“Agencies reported improper payment estimates of almost $55 billion in their fiscal year 2007 (performance and accountability reports) PARs or annual reports, an increase from the fiscal year 2006 estimate of about $41 billion. The reported increase was primarily attributable to a component of the Medicaid program reporting improper payment estimates for the first time totaling about $13 billion for fiscal year 2007, which we view as a positive step to improve transparency over the full magnitude of improper payments. The $55 billion estimate consists of 78 programs in 21 agencies . . . and  represents about 2 percent of total fiscal year 2007 federal executive branch agencies’ government outlays of almost $2.8 trillion. In addition, the $55 billion largely consists of improper payments made in eight programs”

What are improper payments you ask? An old-time auditor remembers them primarily as overpayments although federal agencies also make underpayments, but sometimes, apparently, the federal government makes payments without any documentation at all.A couple of sentences from the report are worth highlighting, however. These two were our favorite:

  • “Our work over the past several years has demonstrated that improper payments are a longstanding, widespread, and significant problem in the federal government.”
  • “(The Office of Management and Budget) noted that further reductions in error rates are expected as agencies take steps to address payment errors resulting from insufficient or no documentation.”

$55 billion in improper payments. Sure sounds like the federal government takes far too much of our money.

Don't want to wade through the 33-pages of the full-report? Here is a one-page summary.