Testimony to House Appropriations and Senate Finance Committees Regional Public Hearing on the Governor's Proposed 2010-2012 Budget on January 8, 2010

Greg Crider
Alexandria, VA

Thank you for the opportunity to speak on the Governor’s budget proposal. I come here today serving several roles. First, as a Virginia resident and taxpayer, second as a representative of my neighbors in a homeowner association of over 100 homes, and more recently as a member of a growing grassroots organization called “Voters fighting for Fairfax” which has the goal of securing a fair share of state resources for Fairfax County.

Here’s a few facts:

Northern Virginia provides 40% of the state general fund revenues, yet receives only 21% of the state general fund appropriations.

Regarding transportation, Fairfax County’s Secondary Road Program has declined from $29 million in FY2004 to $240,000 in FY2010 to literally zero for FY2011 and beyond.

Regarding schools, Fairfax County funds 74% of the Fairfax County school budget, while the average Virginia school district receives half from its local government.

Fairfax County school system receives less than 19% of its funding from the state, while the average Virginia school district receives 48% from the state, due to the Local Composite Index or LCI.

And now that the LCI has finally been adjusted in Fairfax’s favor due to the fall in our real estate values, Gov. Kaine’s budget proposes to “freeze” the LCI at last year’s percentages. This is patently unfair. A freeze will result in Fairfax receiving $60 million less for schools than we deserve and will penalize us by not playing by the same rules as when times were better in our county. I specifically ask that legislators not freeze the LCI and instead enforce the same rules that we have been playing in this revenue game.

While Fairfax County is considered wealthy relative to other areas of the state, not everyone in Fairfax is wealthy. And certainly Fairfax is not as wealthy as we were several years ago which is reflected by the recent LCI adjustment.

The county does not have a diverse revenue stream and since we do not have ability to tax income or other sources of revenue, 80% of our revenue comes from property taxes. Any shortfalls in funding from the state ultimately fall on the property owner. And there is the predicament. County residents pay state income taxes, but receive back only about 19 cents for every dollar we send to Richmond. To make ends meet, the County must raise property taxes primarily to fund the schools. This tax burden falls unfairly on homeowners, many who are elderly and on fixed or reduced income now-a-days.

The long-term solution to this unfairness requires a structural change in our tax system. In the meantime, though, at least enforce the rules of the revenue game and Don’t Freeze the Local Composite Index.

Note: The Local Composite Index is a formula that determines state funds to local schools. It is adjusts every two years and is based on the locality’s income, real estate value and sales tax collections.