The
Warrenton Miracle
George
Fitch, mayor of Warrenton, proved he can cut
spending and lower taxes. Jerry Kilgore, who's
seeking the Republican gubernatorial nomination as
a status quo candidate, better watch out.
Warrenton,
Va., is a small township with a population of
about 7,000 residents. It’s located in the heart
of Fauquier County, some 50 miles southwest of the
District of Columbia. This is not a place where
one expects to discover new economic models. Yet
what’s being referred to as the “Warrenton
miracle” should get most economists to
reconsider what they learned in school.
A
few years ago, a gentleman by the name of George
Fitch became very unhappy with the way things were
being managed by Warrenton’s town council. At
the time, the town was no different than many
other local government bodies, which are caught in
an endless cycle of increased operating costs,
followed by higher property and business taxes.
George
felt that the town was mismanaged and that things
would only get worse if something drastic wasn’t
done to stop the endless tax-and-spend cycle. So
he threw his hat in the ring and ran for the
office of mayor.
A
political neophyte, George was told that his
campaign did not stand a chance. But he persisted
and beat the odds given to him by the pundits and
the political establishment. George’s platform
of lower taxes and smaller government greatly
appealed to the voters--in this regard, Warrenton
was no different from the rest of the state.
Unfortunately, time and time again, the majority
of politicians fail to get this simple message.
Once
elected, George applied performance-based
budgeting principles while reforming the
government from the ground up. The principles were
the same as those of the private sector, where the
bottom line governs most business decisions.
George’s
accomplishments over the last six years have been
nothing short of an economic miracle. They are
classic examples of out-of-the-box thinking, which
should be studied by every government
administrator in our Commonwealth. Today,
Warrenton stands as the lowest taxed community in
Virginia!
At
a time where most local governments continue to
raise the property tax burden on their residents,
Warrenton cut real estate taxes by 80 percent! The
real estate levy charged per $100 of assessed
value was slashed from 18 cents to only 3 cents.
Compare
this rate to other towns in our Commonwealth,
where some townships levy as much as 60 cents per
$100 of assessed value. For example, the
neighboring town of The Plains, which is located
less than 15 miles north of Warrenton, assesses a
real estate levy of 50 cents. I’m certain that
the residents of The Plains do not receive many
more services than the residents of Warrenton to
justify the 47 cents premium in additional taxes.
But
the positive results are not limited to real
estate taxes. Personal property taxes were reduced
by 55 percent, from $2.20 to $1.00 per $100 of
assessed value. And certain business taxes were
reduced by more than 20 percent.
At
a time when other localities can’t control their
spending, Warrenton enjoys large operating
surpluses. This is a truly astonishing record; no
wonder George was re-elected with more than 60
percent of the vote.
These
accomplishments were achieved through wholesale
spending reform. Not just small, temporary
reductions in the rate of spending growth but
long-term permanent structural reforms.
Examples
include extending the life of public vehicles from
75,000 miles to 125,000 miles, and reducing of the
workforce through attrition. The workforce today
in Warrenton is 10 percent smaller than it was
five years ago, even though the town has grown by
more than 30 percent.
The
economic development department had cost the town
more than $1 million, but hadn’t brought one
single new business to Warrenton. So George
abolished it. Instead, he cut taxes and promoted a
quality of life that attracted new businesses.
More than 125 new businesses were established in
Warrenton in the last five years; up from 18 in
the previous ten years.
Now
George wants to bring his economic miracle to
Richmond. He thinks that our state government
budget is way out of control. He believes that by
applying the same no-nonsense budgetary reforms,
he can slash state spending.
This
should come as no surprise to anyone. Contrary to
the rhetoric we’ve been bombarded with this
year, culminating in the largest tax increase in
the history of Virginia, a number of studies show
that state government is wasting billions of
dollars.
For
starters, the Wilder commission identified more
than $1 billion in potential savings. The report
established that a tax increase was totally
unnecessary. Instead Gov. Mark R. Warner shelved
the report and proposed a commensurate $1 billion
tax increase. Why bother cutting the budget when,
in an out-of-control Republican Senate, no tax
increase proposal is small enough for the likes of
Sen. John Chichester, R-Fredericksburg, the
chairman of the Senate Finance Committee?
Evan
Mark Warner has sporadically mentioned that
savings of $2 billion or more could be achieved by
streamlining services and by consolidating IT
functions across the government. But talking about
budget cuts doesn’t compare to implementing
budget cuts, so our governor found it easier to
raise taxes instead.
On
the other hand, if George Fitch’s approach is
implemented on our state budget, we may be in for
significant--not cosmetic--reforms. That’s why
it was so refreshing to hear that George is now
exploring a run for the Republican nomination for
governor.
When
it comes to Republican Party politics, Attorney
General Jerry Kilgore is sporting himself as the
presumptive nominee for governor. However, Kilgore
has been an uninspiring and disappointing
candidate for the grassroots activists of the
party. Other than stating that he’s against
higher taxes, Kilgore has not articulated any
concrete policy proposals.
At
a time when our Commonwealth’s treasury is
running a $1 billion surplus--which clearly shows
that this year’s tax increase was
unnecessary--Kilgore has been quiet on whether he
will campaign on a proposal to roll back the last
tax increase. Kilgore is conflicted as he supports
the status quo and has gone on record rebuffing
any attempts to hold accountable the Republican
legislators that voted for the tax increase.
In
the meantime, George Fitch is spending his time
reviewing Virginia’s budget and identifying
areas that are prime for the type of treatment he
likes to dish. Hopefully, his review will
culminate in concrete proposals that will help him
launch a successful statewide campaign.
Those
who think that we should keep on raising taxes, as
proposed by Sen. Chichester and other
tax-and-spend Republicans, clearly will be rooting
for Kilgore. However, the grassroots activists who
yearn for a candidate that will uphold the
Republican Party’s core beliefs in lower taxes
and smaller government should rejoice when George
announces his candidacy.
Virginia’s
budget cannot withstand many more years of the
current tax-and-spend groupthink that permeates
the halls of the Legislative Assembly and state
Government. Once George Fitch enters the race, we
should finally be presented with some contrasting
choices.
--
November 29, 2004
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