From: Arthur Purves, President, Fairfax County Taxpayers Alliance

Presentation to the Fairfax County Board of Supervisors on the County Budget - 04/08/2014

Madam Chairman and Members of the Board:

My name is Arthur Purves. I address you as president of the Fairfax County Taxpayers Alliance.

Like you, we want county employees to be well compensated so we can attract the best, and we would cut compensation only as a last resort. But we need to balance compensation with taxpayer resources.

My employer, an aerospace firm, has reduced our vacation time, adopted high-deductible health insurance, and replaced pensions with 401Ks. Where I work another company has cut the salaries of security guards 20 to 40 percent. A third company is cutting the salaries of analysts 30 percent.

Meanwhile real estate taxes for the typical Fairfax County homeowner increased from $2400 at the start of the housing bubble to $5100, a 114 percent increase compared to 47 percent inflation. This does not include the $450 (8.8 percent) increase proposed for next year.

We used to think that increases in enrollment, special education, low-income students, and county population drove tax increases. We were wrong. The primary cause of higher taxes is compensation. Between FY2000 and FY2014, FCPS spending, before offsets increased $1.6 billion. Seventy-seven percent of that was for compensation and only 23 percent for enrollment growth. When we asked the county what percentage of its spending growth since FY2000 was for compensation as opposed to population growth, the county refused to answer. However, it is reasonable to assume that county compensation mirrors school compensation.

Salary increases for FCPS employees average 4.6 percent annually since FY 2000. This is in addition to zero-deductible health insurance and pensions with retirement at 55 at 75 percent of salary. When I tell this to my private-sector peers, they gasp. A 4.6 percent raise would be given to only a handful of top-performing employees.

The market knows that a county job is a good deal. Annually there are about 30,000 applicants for 1,000 FCPS job openings, and 200,000 applicants for 1000 county job openings.

In return for high taxes, only 54 percent of FCPS graduates are prepared for college. Poverty is increasing in the county while high-income taxpayers are leaving the county. We are becoming Detroit.

The tax rate that would offset the 6.5 percent increase in residential assessments is $1.04, which is 9 cents less than the advertised rate of $1.13. $1.04 would reduce projected revenues by $200 million. This could be achieved without layoffs and without cancelling programs by rescinding proposed pay increases, adopting high-deductible health insurance, by immediately raising ERFC and FCERS retirement ages and using the $100M available from county and school position turnover. This is not a tax cut and does not cut salaries; it only prevents a tax increase.

To reverse poverty, the county should attract jobs by eliminating the BPOL tax, which raises $160 million. This loss of revenue could be offset by a ten percent cut in county and non-teacher school salaries. Even with a ten percent salary cut, county and school employees will have had a much higher average annual raise over the past 15 years than their private-sector counterparts.

Let's not become Detroit.

Thank you.