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Earlier
this week, a judge found Fairfax Board of
Supervisors Chairman, Gerald Connolly, not guilty of
a hit-and-run charge. In handing down his finding
the judge said “[Connolly’s] position and his
duties have caused him to be oblivious to what is
going on in his car.”
Without
doubt, this is a precedent-setting case. Henceforth,
drivers involved in traffic infractions can testify
to their defense that that they were oblivious to
what was going on. Only, I somehow doubt that many
other judges would be prone to accept such an excuse
from ordinary citizens like you and me.
Perhaps,
that’s also the reason that the Fairfax County (FXCO)
government – the local government body over which
Gerald Connolly presides – conveniently forgot to
advise the voting public of some crucial details
regarding the $325 million in new bond sales that
will appear on the November 2 ballots in this
County.
FXCO
has spent $100,000 of taxpayer funds just to mail a
brochure to every resident in the county. And its supervisors
have been spending countless of hours campaigning in
favor of the bonds. Considering that taxpayer
dollars were spent to convince voters to vote in
favor of permitting the county to incur an even
greater debt load, we should accept nothing less
than an honest disclosure of the facts at stake.
Unfortunately,
FXCO is engaged in a misinformation campaign to
snooker the voters into voting for the issuance of
the new bonds without disclosing all the facts –
or, more importantly, the financial consequences of
voting in favor of the bonds as advocated by
county
officials.
For
starters, what’s not being told to the voting
public is that the costs of borrowing are not cheap.
The county’s flyer does not spell out the
borrowing costs; rather, it alludes to low interest
rates and the county’s favorable bond rating.
The
nasty little secret is that in selling $325 million
in new bonds, taxpayers will pay an additional $160
million in interest – irrespective of the low
interest rates or the county’s Triple-A bond
rating.
Furthermore,
the county’s flyer misinforms the voters on the
question of whether the new bonds will cause a tax
rate increase. The flyer is silent on the fact that
FXCO currently owes $2 billion – yes, that’s
billion with a “B” – on bonds already sold.
Consequently, the flyer omits disclosing that
taxpayers will pay $234 million in debt service this
year.
The
debt service costs amount to 16 cents of the
County’s $1.13 real estate tax rate or about 14
percent of the current rate.
The
flyer also omits to state that for years now,
revenues from annual bond sales have been about the
same as the annual debt service. Yes, that’s
right, this year FXCO expects to raise $221 million
from bond sales, while it expects to pay $234
million for debt service.
So
you say, what’s the point of selling new bonds?
Good question!
Like
any junkie looking for a quick fix, FXCO now finds
itself having to sell new bonds each year to support
its borrowing habit. Otherwise, it would have to go
cold turkey, cease spending on new infrastructure
projects and increase tax rates just to cover the
debt service on its outstanding $2.0 billion debt.
This
is an act of desperation, not a fiscally sound
approach to managing the County’s resources.
Had
the County refrained form going on a bond-selling
binge over the last decade, it could have spent the
amounts now earmarked for debt service to fund its
infrastructure projects. This novel concept is
called “pay-as-you-go financing.” Had FXCO
followed this path, it would be in a position to
spend approximately the same amount each year
without the additional $2 billion debt burden.
The
Fairfax County Taxpayer Alliance (FCTA) has been a
lone voice in trying to educate the public.
Unfortunately, its pleas against the Bond Referenda
are falling on deaf ears. Somehow a lot of people
are convinced that when the county issues new bonds
it’s akin to getting a free lunch. However, with
the stock market bubble of the late 1990s etched in
our recent memories, we should all know by now that
there is no such thing as a free lunch.
Furthermore,
the FCTA’s efforts to have FXCO spice its rhetoric
on the bonds with a modicum of truth have also run
into a brick wall. And given the apparent inability
of FXCO residents to sue their government into
compliance with existing statutes (e.g., statutes
mandating full disclosure in referenda campaigns), a
misinformed and unwitting voting public will
undoubtedly vote in favor of the bonds and pass on
our current financial obligations to future
generations.
So much for fiscal responsibility or truth in
governance. But then again, we can all blame it on
poor Gerry Connolly, who was found by a court of law
to be oblivious to what’s going on in his own car
– never mind in his own bureaucratic fiefdom.
--
November 1, 2004
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