By Arthur Purves
President, Fairfax County Taxpayers Alliance
Updated and reposted from FxFC post on October 6, 2016
You have probably received the Fairfax County pamphlet “2016 Meals Tax Referendum: It’s Your Decision.” It was printed and mailed to 400,000 Fairfax County households at taxpayer expense. The pamphlet says that a meals tax is needed “… to reduce the county’s dependence on real estate taxes … ” Of the $99M in expected meals tax revenue, 70% will go to schools and 30% to the county. The pamphlet states that the county’s share “ … will be dedicated to county services, capital improvements, and property tax relief.”
The November 2016 ballot question states that the meals tax is “ … For the purpose of reducing dependence on real estate taxes.” Through these statements, the county misleads voters into believing that the meals tax will result in lower real estate tax hikes. Note, however, that the pamphlet and ballot question leave the amount of tax relief unspecified.
The meals tax revenues will not even pay for next year’s raises and projected increases for pensions and medical insurance. The county is forecasting a $52M increase for 3.5% raises and benefits. The schools are forecasting $146M for raises in excess of 3.5%, plus benefits. In the years after a meals tax, real estate taxes will again increase faster than household income, school programs will still be in jeopardy, and budget crises will continue to pay for 3.5% across-the-board raises, pensions with retirement at age 55, and Cadillac health plans.
The meals tax is a one-year burden, not a solution.
This is summarized in NOMEALSTAX.COM, a new website posted by the Fairfax County Taxpayers Alliance. Please publicize it. We do not have tax dollars to reach 400,000 households.
We are aware of only three forums in which an elected official defended the meals tax against an opposing speaker (Supervisor Pat Herrity). In contrast, The Fairfax Committee of 100 had a meals tax discussion where Pat Herrity spoke against, but a former school board member spoke for the meals tax. Unfortunately, rather than raise the points mentioned here, most of the arguments against the meals tax have been the restaurant-association arguments, for which the county has a detailed rebuttal. The Mt. Vernon Citizens Association is having a forum where a restaurant executive is speaking against, but a past-president of a teachers’ union is speaking for. The McLean Citizens Association is having a forum where incumbent Dranesville Supervisor Foust is speaking for the meals tax but no one is speaking against!
So the FCTA is sending an invitation to all incumbent supervisors and school board members to see if any incumbent is willing to speak in favor of the meals tax at the FCTA luncheon. Come to the luncheon and see if any of your elected officials are willing to “do democracy” by engaging in public debate with us about the meals tax.
The schools say that large raises are necessary because the Fairfax County Public Schools (FCPS) salaries are not competitive. An undated FCPS report states that since July 1, 2014, FCPS lost 316 teachers and 417 applicants to surrounding school districts. An exit-survey report states that 57% percent of teachers voluntarily leaving FCPS cite salary as a reason for leaving.
However, the same reports also state that 70% of teachers cited personal reasons for leaving, 48% percent cited workload, another 48% cited leadership support, and 44% cited burnout. Of the 316 teachers who left for surrounding districts, the reports do not say how many went to higher paying jobs. While Arlington County Public Schools (ACPS) pay more than FCPS, ACPS is much smaller than FCPS (4,600 employees vs. 23,900 employees). It is not likely that many FCPS teachers switch to ACPS.
FCPS compensation is competitive with the private sector. FCPS reports that for the 2015-2016 school year, the schools reviewed 15,102 applications for 1,477 job openings.
If FCPS does significantly raise salaries, then the teacher unions in neighboring jurisdictions will threaten to go to Fairfax unless their supervisors increase taxes for their salaries. Then the Fairfax teacher unions will say that FCPS is falling behind again and demand more taxes and raises, etc. This has been going on for years. The resulting tax increases have not helped the Fairfax economy.
The county meals tax pamphlet acknowledges that the county is in an economic downturn and has not recovered from sequestration. Meals tax supporters agree with the April 2, 2016, Washington Post article that Fairfax County is beginning to “fray” at the edges. A 9/24/16 Washington Post editorial supporting the meals tax states that Fairfax County office vacancies are at a 25-year high; federal procurement is 14% lower than in 2012; and job growth is anemic. This is after 16 years during which real estate taxes have been increasing three times faster than household income.
To revive the Fairfax County economy, the supervisors and school board need to address the causes of higher taxes. The major cause is raises. The best employees should be attracted and retained through merit pay, retention bonuses, and addressing the issues of leadership, workload (unnecessary ad- ministration), and burnout. It is too expensive to pay all employees the premium necessary to retain the best employees.
The next major cause is benefits. The supervisors commissioned a January, 2012, study, Fairfax County Post-Retirement Benefits Review. The study recommends that to cope with tightening budgets, the county should consider lower-premium, high-deductible health care plans that qualify for Health Savings Accounts or move to health care exchanges. Regarding pensions the study recommends tighter eligibility for employees who move on to other employment while drawing retirement benefits. It also recommends moving to defined-contribution plans and removing the Social Security supplement feature, which provides more generous benefits for employees retiring before they are eligible for full Social Security benefits.
Finally, the timing of the meals tax referendum is interesting. In 2014 the county convened a Meals Tax Task Force, which had four meetings in May and June. At the first meeting it was understood that the Task Force at the end of its deliberations would vote on whether to recommend putting the meals tax to referendum. However, at the second meeting, Co-Chairs Tom Davis and Kate Hanley announced there would be no vote. After the Task Force adjourned County Chairman Sharon Bulova announced there was so much opposition to the meals tax that it would not be put on the 2015 ballot. (It was legally too late to put a referendum on the 2014 ballot.) Supervisor Foust mentioned at a town hall that he understood that the Task Force was opposed to a referendum. However, in the deliberations the Task Force majority seemed in favor of a referendum.
Then it was announced that the meals tax referendum would be put on the ballot for the presidential election. This was a surprise because the meals tax would have had a better chance of passing in the 2015 supervisors election, where only 185,000 of the county’s 650,000 registered voters turn out. In such a low-turnout election, the 34,000+ county and school employees and their families are a significant proportion of the electorate, which would have favored the meals tax—it gives them raises.
For more information, see http://nomealstax.com.
Maybe there was a reason to put the meals tax on the presidential ballot. With the incumbent president not running, 2016 was expected to be a tight election. Virginia is a swing state. Virginia’s governor was chairman of Hillary Clinton’s 2008 presidential campaign. Fairfax County decides the outcome of Virginia. So a possible reason for putting the meals tax on the presidential ballot even though it lessened the chances of approval, was to give the 34,000+ Fairfax County and school employees an incentive to turn out in the presidential election. Whether it wins or loses, the real effect of the Fairfax County meals tax referendum might be to elect Hillary Clinton President.
So be sure to vote on November 8. Vote against the meals tax so the county is forced to cut expenses.