Another “Unsustainable” Tax Increase

Supervisor Pat Herrity
By Pat Herrity
Reposted with permission of the author from The Herrity Report of May 4, 2018

On May 1, the Fairfax County Board of Supervisors voted 8 to 2 for a 2.25 cent increase in the tax rate on homeowners (2 cent real property and .25 cent increase in storm water tax). Together with the rise in assessments, taxes on the average homeowner will go up over 4.5% this year and 26% over the last five years. In addition, the Board voted to increase a number of other fees and taxes including the sewer rate. It is clear that taxpayers were an afterthought and not a priority in this budget. Supervisor Cook and I voted against the tax increases and budget.

Just over a year ago our taxpayers sent a message they had been taxed enough—soundly defeating the meals tax referendum. Over the last several years, numerous opportunities to review and reduce spending have been identified—from the Lines of Business Review to firefighters bringing in six figures of overtime pay alone. Yet again described as unsustainable, this year’s budget process did nothing to address the spending issues and savings opportunities identified over the past several years.

The budget mood was described as “harmonic” and reflective of the Budget Chair’s desire to “fund all of the needs.” This is likely because no difficult decisions were made, let alone reviewed, and almost everyone got what they wanted. From my perspective this was the most disappointing of the 10 budget processes I have been involved in because the entire burden was placed on the backs of our taxpayers. While I have supported budgets in the past, I could not begin to support this one for the following reasons:

Identified Budget Issues Not Addressed – This year the Board continued to avoid making the same tough budget decisions that our citizens have had to make when their wages are not increasing. The Budget Chair went so far as to remark about how this budget had the fewest budget adjustments of any in recent memory. Typically, we at least find some opportunities to reduce the burden on the taxpayer—this year the ‘big’ adjustment was an adjustment to account for an increase in state funding. Not a single meeting was scheduled to review or discuss potential reductions. Over the last three years there have been many areas for meaningful savings identified—I discuss a few of these further below.

Wages are Stagnant While the Tax Burden Goes Up 26% While the tax bills continue to grow in Fairfax, wages have not, especially for our growing population of seniors and our dwindling population of millennials. Wages in Fairfax County have been stagnant, forcing taxpayers to make difficult decisions in order to pay for the 4.5% tax increase (26% over the last 5 years). This is especially true for our seniors who live on fixed incomes. I received more feedback than I ever have from seniors saying they are being forced out of Fairfax County by high tax rates—these are the residents that have raised their families here and have supported our economic growth. We want them and their children to stay and help grow our economy.

Surrounding Jurisdictions Reduced Their Tax Burden – Most of our surrounding jurisdictions reduced the tax burden on their average homeowners this year. Fairfax County was the exception, leaving us with the distinction of having the highest real estate tax rate in the region—not good for our homeowners or for attracting businesses.

School Resources Need to Focus on Teachers and the Classroom –The FY2019 budget includes much needed raises for our teachers; however, it also includes significant increases for administrators—including one salary band for which the starting salary increased 38%. Supervisor Foust and I questioned these increases, which were not fully explained nor understood by the School Board, and we also asked if they could be phased in over three years like the teachers’ salaries were. The School System’s leadership was also unable to explain the impact of the changes over multiple years. Contrary to the remarks made by some Board of Supervisors members, I have always supported our teachers being the best compensated in the region. That said, I cannot support unexplained and therefore irresponsible increases for administrators. I talk to a lot of teachers, and many have just as much, if not more, concern about their administrative burdens than they do about their salaries.

The Way Forward:  Three years ago, the 6% tax increase was described as a “booster shot” explaining that it was a much-needed one timeincrease that was “unsustainable.” This year the 4.5% increase was described as needed to “shore up the foundation” and again the increase was described as “unsustainable.” Tax increases of 26% over 5 years are not only unsustainable, they were also unnecessary.

If the Board had been prepared to make difficult decisions on the budget, there were options that have been repeatedly identified both in its own Lines of Business (LOBs) reviews, by budget questions, and by me and other Supervisors. Some of these are included below; it is by no means an exhaustive list.

Follow up on the Lines of Business Review – Three years ago the Board went through a long process (LOBs review) and identified areas to investigate for savings. Since that time most of the opportunities for savings identified during those reviews have not been scheduled for discussion before the Budget Committee. Examples of these opportunities include:

  • The fact that many of our departments have their own Public Information Officers (PIO) in addition to the Office of Public Affairs. Currently, the county has 86 PIOs with an average salary of $140K (including benefits) for a total estimated cost of approximately $12M. Many of these positions are filled by hard working County employees and are justified, but we have not taken the time to review. There are many other areas where departments have duplicative services.
  • The overlap and need to address efficiencies in the Office of Public Private Partnerships, Volunteer Fairfax, and other agencies.
  • The need for business metrics and benchmarking with surrounding and like-sized jurisdictions.

Address the Overtime Issues – Last year one of my budget questions resulted in identification of overtime issues that included a firefighter with a $90K salary who was paid $260K in one year because of overtime. There will always be overtime in public safety and other agencies, but the results raise fiscal and safety questions that should be addressed. The Board approved my request for a review, but after a year it has yet to be presented to the Board.

Address our Compensation and Pension Issues – Since I joined the Board in 2008, I have been advocating to address our compensation and pension issues. Far too much of our compensation dollar is going to unsustainable pensions that provide a far greater pension benefit than our surrounding jurisdictions. These pensions are paid on top of a county-paid social security benefit to retirees as early as age 55. Because these changes will only impact new employees, the savings are not immediate. In 2013 the Board did “nibble around the edges” and raised the age from 50 to 55. Three years after indicating we needed to revisit this issue, the Board has not taken additional action. It appears poised to once again “nibble around the edges” of the pension and compensation issues—further delaying the impact and in my opinion our ability to hire, reward, and retain the best employees and teachers. See my newsletter on pensions here.

Grow the Commercial Tax Base – I have and will continue to stress the importance of a healthy commercial tax base. It is imperative that we refrain from creating additional tax burdens on our businesses, that we eliminate the time consuming regulatory and permitting processes and expensive comprehensive plan requirements. Redoubling our efforts to attract new businesses to Fairfax County is imperative and will relieve some of the tax burden this Board has placed on its residents.

In early 2015, Fairfax County contracted with Gartner Consulting to assist in a comprehensive review of Fairfax County’s land development processes with the goal of improving speed, consistency, and predictability. Since the Gartner recommendations were made, I have been persistent in the need for metrics in benchmarking our zoning and permitting processes. While we have made many improvements, we still do not have metrics or benchmarking and have a way to go on refining these processes.

Review the Many Other Areas Identified – Some of the areas that I have asked to look at over the last several years include a review of our the Deferred Retirement Option Program (DROP), Public/Private Partnerships, agency consolidations, competitive sourcing, a review of our proffer system, eliminating duplicative agencies, and privatizing and prioritizing the many programs we offer to our residents. These have been discussed in previous Herrity Reports and presented to the Board.

Although I was happy to see that this budget included my requests for additional resources to address our opioid public health crisis and gang issues, I am disappointed that these were not funded with cost savings.

Unfortunately, I believe we will again find ourselves with the daunting task of dealing with a significant shortfall in FY20. I am hopeful that the County Executive’s strategic planning process will lead to some priority setting and that these priorities will again include our taxpaying residents. I am also encouraged by the budget language that commits to beginning the long awaited LOBs part 2 process. I hope by setting priorities, the obvious and necessary spending reductions will become a reality.

Mr. Herrity is the Fairfax County Supervisor from Springfield District.

Feature photo credit: Fairfax County Supervisor Pat Herrity, Springfield District ( photo)

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