Category Archives: Finance (government)

Time for a Fairfax County Salary Freeze

by Arthur Purves

Local government compensation is better than private sector.

On April 30 the Fairfax County Board of Supervisors will vote on next year’s (FY2025) tax increase. The supervisors have advertised a 7% increase in real estate and car taxes to help pay for $360 million in raises for 38,000 school and county employees.

School raises are 6% and county raises range from 4% to 10%. By comparison, the county says that inflation is 2.5%. For next year, the Fairfax County Board of Supervisors, under Chairman Jeff McKay, is proposing a 7.1% or $618 tax increase for the typical residential household. This is the second largest tax hike in ten years, exceeded only by last year’s 8.9% increase.

Next year’s tax hike is made up of an average 6.5% or $531 increase in the combined real estate and stormwater tax, both of which are based on household assessments, plus a 16% or $87 increase in the car tax.

This continues the supervisors’ quarter-of-a century habit of increasing residential taxes three times faster than household income. They are advertising a 4-cent increase in the real estate tax rate, from $1.13 to $1.17 (includes the 3-cent stormwater tax), on top of a nearly 3% average increase in residential assessments.

Unless they hear from homeowners, the supervisors will probably adopt a rate of $1.16 when they finalize the budget on April 30, in hopes that homeowners will be relieved that the rate increased 3 cents instead of 4 cents. Continue reading

The Case for an RVA Meals Tax Amnesty

Richmond City Hall

by Jon Baliles

Today we are posting a special edition featuring an email from former restaurateur Brad Hemp that he recently sent to City Council about the meals tax fiasco you have probably heard about as a result of seven years of neglect at City Hall. The Mayor raised the meals tax in 2018 to help build new schools and pledged in return he would also help the restaurants. He raised the tax, and three schools were built, but he forgot about helping the restaurants.

Now, here we are, years later, and the only thing coming from City Hall are vacillating and daily changes and pledges to fix the problem on a “case-by-case” basis (in a vain attempt to get the media stories to stop). As someone who lived and breathed the restaurant business (and could teach the Mayor and Council a few things about it), Hemp has some suggestions to fix the mess. The question is, will the Mayor and City Council finally listen and do something?

The best government is almost always the one that listens. It makes it easier for people to enjoy their lives, better their neighborhoods, open or run a business, and have fun. The worst government is almost aways one that pretends to know everything and thus ignores listening to or helping the people by doing things like, just as an example, forcing through a second casino referendum right after the first one lost. Another way to demonstrate bad government is to find straw-man excuses for erroneous billing of residents for personal property, real estate and water, and misapplying payments of meals taxes for restaurants and never notifying anyone when a bill is late while interest and penalties skyrocket. The “leaders” at City Hall say it’s the fault of state code, or the postal service, or bad technology, or the current lunar cycle. Don’t look inward to see if it’s an internal problem, blame it on everyone and everything else. Continue reading

But It’s Just a Little Bit of Money

Rep. Ben Cline (Va.-6th District)

by Dick Hall-Sizemore

Ben Cline, the Commonwealth’s Republican member of the U.S House of Representatives from the 6th District, is very upset about the level of federal spending and the state of the federal deficit.

Cline is chairman of the Republican Study Committee’s Budget and Spending Task Force.  In a press release last year, he lamented the trillions in new spending authorized by the Democrats in recent years and the $31.92 trillion in national debt. (He does not mention the trillions in debt rung up during the Trump years.)  The study committee has a proposal that would “balance the budget in just seven years, cut spending by $16.3 trillion over 10 years and reduce Americans’ taxes by $5.1 trillion over 10 years.”

As part of that overall plan, Cline’s task force produced an alternative budget for 2024.  I have to give Cline and the task force some credit.  Usually, when conservatives call for spending cuts, they refuse to say what specific items should be cut or eliminated.  That is not the case with this document.  It has over 120 pages listing specific programs for elimination or reduced funding.  After dealing with Social Security, Medicare, and defense, the budget has about 30 pages of specific mandatory and discretionary spending programs it recommends eliminating or reducing. Continue reading

The Mailman Did It

by Jon Baliles

They say bad news comes in threes, and this week is no exception for news from the City of Richmond’s Finance Department. This week wasn’t just raining; it has been a monsoon when it comes to sloppy administrative work, penalties, interest, and deflecting blame.

Madison McNamee with NBC12 filed a story last night that says a number of residents in the West End, all in the same area/street, never received their real estate tax bills and were fined with penalties and interest by the city for untimely payment. The residents on a street just off of Grove Avenue never got their bills and never knew about it until they were sent a hefty late fee with interest, and the residents were told it was the fault of the Postal Service.

Resident Ken Davis is a former Deputy Attorney General who said he always pays his city taxes and has lived in the neighborhood for decades, but got hit with $800 in fees and fines, which he paid immediately. He said under Section 58.1 3916 of Virginia Code that “penalty and interest for failure to file a return or to pay a tax shall not be imposed if such failure was not the fault of the taxpayer.” Continue reading

Subsidizing a Billionaire

Ted Leonsis, owner of the Washington Wizards and Washington Capitals; Gov. Youngkin on left. Photo credit: Virginia Business

by Dick Hall-Sizemore

If approved by the General Assembly and the City of Alexandria, the deal reached between Gov. Glenn Youngkin and the owner of the Washington Wizards and the Washington Capitals for those teams to move from Washington, D.C. to the Potomac Yards site in Alexandria would constitute the largest public subsidy for a sports team in the nation’s history.  That is the conclusion of a report by JP Morgan commissioned by the state, a copy of which was obtained by The Washington Post.

The total estimated cost of the project is $2.2 billion.  The owner of the sports teams, Monumental Sports and Entertainment would contribute $403 million up front.  The City of Alexandria would be on the hook for $106 million.

The state would create a sports and entertainment authority which would own the land and the buildings and lease them to Monumental. The company would sign a 40-year lease with rent beginning at $29.5 million annually and increasing to $34.5 million.  In addition to the arena for the two sports teams, the project would include a concert hall, underground parking, a conference center, a Wizards practice center, and Monumental’s  corporate offices and media station. Continue reading

Youngkin Team Cautious Despite Revenue Surge

Finance Secretary Cummings showed this chart to legislators this week and noted the deceleration in job growth, citing that as another reason he and Governor Glenn Youngkin remain cautious despite strong revenues. Click for larger view.

by Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy. 

Virginia’s state budget grew 90% in the past decade, far faster than in previous decades. After adjusting for inflation and population changes, spending still jumped 4% each year, a high rate of compound real growth.  At the same time, the state continues to see explosive growth in its revenue, pointing to cash surpluses continuing for some time.

These facts emerged from two presentations to the Virginia General Assembly this week.  The Joint Legislative Audit and Review Commission (JLARC) issued its annual report on state spending growth on Monday.  That same day, Secretary of Finance Stephen Cummings reported on the revenue results from July through September, the first quarter of Fiscal Year 2024.

In just those three months, revenue exceeded the revenue estimates by more than $412 million.  Other months, with larger pots of projected revenue, are still ahead.  Should this revenue trend hold, surpluses similar to the historic surpluses of Fiscal Years 2022 and 2023 could result next June.

During the elections two years ago, Virginia’s flush financial condition was inspiring debates about tax reductions and tax reform.  Some, but not all, of the proposals went on to pass.  But with General Assembly elections just over two weeks away, few candidates in either party are promising more tax reform or reduction efforts in the next session. Continue reading

Virginia’s “Runaway” Budget Negotiators

by Derrick A. Max

(This column was first published by the Thomas Jefferson Institute for Public Policy)

Fear of commitment is a common theme in Hollywood — where romantic comedies are replete with characters that sidestep long-term commitment primarily out of fear that someone better may come along. Think of Runaway Bride, where Maggie, played by Julia Roberts, keeps running away from her betrothed at the altar out of such fear.

The budget amendments passed last Wednesday with bipartisan support and praise from Governor Youngkin are replete with commitment issues. The approved tax cuts and new spending were written to have very little impact beyond the current budget cycle. Like Maggie, both Governor Youngkin and the Senate Democrats are clearly standing at the budget altar hoping for better options after the November elections. Continue reading

The Virginia State Budget and the Rising Costs of Registered Nurses

by James C. Sherlock

I was asked yesterday by a reader about the relationship between nursing homes, rising registered nurse salaries and the new Virginia budget agreement.

Good questions. Virginia’s workforce includes nearly 70,000 registered nurses.

The state pays its workers, but it also pays its Medicaid share for private sector nurses. Pay for private sector workers is based upon market conditions. The market wage for registered nurses nationwide increased dramatically during COVID.

Perhaps the only good thing to come out of that mess was that registered nurses, of whom Virginia has 11% fewer than demand calculated by the federal Health Resources and Services Administration, got very large pay and bonus raises, and the new wage points appear to have stuck.

If the laws of economics work here, that will over time increase the number of nurses if we can educate and train them in the required numbers.

The latest figures from the Bureau of Labor Statistics for all states show that the median wage for an RN in Virginia was $79,700 a year. In Northern Virginia portion of the D.C. metro area, the median was $92,800.  The underlying data are a couple of years old.

Wages and bonuses can vary a lot among Virginia hospitals, nursing homes, home health agencies, nursing school staff and government employees, and are higher or lower depending on specialty. The private sector offers $10,000 to  $20,000 signing bonuses paid out after the first year.

Employers of course must pay payroll taxes and other expenses related to employees, and thus their costs will generally exceed $100,000 per RN.

Virginia RNs are still underpaid compared to national figures. The mean annual wage for America’s 3 million registered nurses in May was $89,010 compared to Virginia’s $79,900.

The federal Centers for Medicare/Medicaid Services, aware of some of the questionable business models of bad actors in the nursing home industry, published last week a proposed rule to both increase the minimum number of RNs in nursing facilities and to require all nursing facilities to reveal every year how much of the Medicare and Medicaid payouts go to salaries and related expenses.

So, Medicare and Medicaid costs will go up yet again. Continue reading

Is Hopewell the Next Petersburg?

Downtown Hopewell. Photo credit: Richmond BizSense

by James A. Bacon

Long-time Bacon’s Rebellion readers will remember the fiscal saga of Petersburg, a struggling rust-belt city whose finances were so mismanaged that the city had to call in outside consultants to fix them. The City of Hopewell, another struggling rust-belt industrial town, may be facing the same fate. City Council has appointed Concetta Manker — its former information technology manager — to lead a financial turnaround.

Finances had deteriorated to the point where Virginia State Secretary of Finance Stephen Cummings ordered an outside audit and outlined steps the city should take to get back on track. According to the Richmond Times-Dispatch, Cummings stressed the need to bring in experienced help to get the municipality’s books in order. He even offered $200,000 to help the city find such an executive.

But Council voted “no” yesterday on the idea, and elevated Manker, who was serving as interim city manager, to step into the role officially. Manker’s job would be tough under any circumstances: the city with a population of 23,000 cannot take on debt because it hasn’t even had a credit rating since 2017. Making the challenge even greater, her professional background is IT, not finance. Continue reading

Check Out Which New Virginia Laws Go Into Effect July 1st

by The Republican Standard staff

The Virginia General Assembly passed several small bills due to the split between the Republican-led House of Delegates and the Democratic-controlled Virginia State Senate. Yet the areas where they did find co-operation could matter to many Virginians as we head into Fourth of July weekend.

Enhanced Penalties for Fentanyl Manufacturing or Distribution
Reeves SB1188 Senate 35-5 House 50-42
Provides that any person who knowingly and intentionally manufactures or knowingly and intentionally distributes a weapon of terrorism when such person knows that such weapon of terrorism is, or contains, any mixture or substance containing a detectable amount of fentanyl is guilty of a Class 4 felony.

Universal Occupational License Recognition
McDougle SB1213 Senate 40-0 House 99-0
Establishes criteria for an individual licensed, certified, or having work experience in another state to apply to a regulatory board within the Department of Professional and Occupational Regulation and be issued an occupational license or government certification if certain conditions are met.

Police Chiefs May Enact Local Curfews during Disturbances
Norment SB1455 Senate 27-12 House 53-45
Enables the chief law-enforcement officer of a locality to enact a curfew under certain circumstances during a civil disturbance.

Making Sure Every District has a Legislator
Suetterlein SB944 Senate 39-0 House 99-0
Requires special elections to fill a vacancy in the membership of the General Assembly be held within 30 days of the vacancy if the vacancy occurs or will occur between December 10 and March 10 which coincides with time right before and during the General Assembly session. Continue reading

Light Rail: Idiotic Idea In 2016. Idiotic Idea Now.

by Kerry Dougherty

Virginia Beach voters THOUGHT they drove a stake through the heart of the absurd plan to bring light rail to the city after an overwhelming vote in 2016 against the nutty, developer-driven boondoggle.

But never underestimate cultists with an agenda. You know, developers who believe taxpayers have a duty to open their wallets to help THEM get rich. Or climate kooks who don’t understand a cost/benefit analysis.

No surprise, then, they’re back. Some shadowy online group is beginning to push a bad idea that was buried in a landslide 7 years ago.
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Major Actions to Reduce Corporate Overhead Offer Lessons and Opportunities to Virginia Government

Courtesy Wall Street Journal

by James C. Sherlock

The chart above shows that management and administrative overhead growth has been a trend not limited to government. The difference is that corporations are making quick and decisive strides in reversing the trend.

It is axiomatic that government should minimize overhead to maximize efficiency in delivery of services. And to lower its costs.

Efficiencies need to be found:

  • to maximize value for citizens;
  • to speed decision-making;
  • to minimize administrative consumption of the time and attention of front line workers; and
  • to restore freedom of speech suppressed by government bureaucracies assembled for that purpose.

All senior government managers would sign up for those goals — as theory. But execution is hard. Internal pressures against change are seldom exceeded by external ones that demand it.

An excellent report in the Wall Street Journal makes an observation that they may wish to consult for inspiration.

Companies are rethinking the value of many white-collar roles, in what some experts anticipate will be a permanent shift in labor demand that will disrupt the work life of millions of Americans whose jobs will be lost, diminished or revamped partly through the use of artificial intelligence.

‘We may be at the peak of the need for knowledge workers,’ said Atif Rafiq, a former chief digital officer at McDonald’s and Volvo. ‘We just need fewer people to do the same thing.’

Continue reading

As U.S. Teeters On the Brink of Recession, Virginia Beach Hikes Taxes

Clouds gather over Va Beach. (Bob Rayner)

by Kerry Dougherty

Do you mind if I’m brutally honest for a minute? Good. Because there’s no stopping me today.

Any member of the Virginia Beach City Council majority who voted Tuesday to approve an obscene $2.5 billion budget as the country teeters on the edge of a recession is a liar if they try to tell you they didn’t raise taxes.

I mean it. Join me in calling them LIARS.

While it’s true these politicians left the tax RATE alone, assessments jumped an average of 9%, with some of us seeing much sharper increases.

That means almost every homeowner in Virginia Beach just got a big fat tax hike. Combine that with an inflation rate of about 5%and the average working family trying to stay above water in the resort city is drowning.
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Is Stingy State Funding to Blame for UVa Tuition Increases?

by James A. Bacon

In explaining the cause of rising tuition & fees at the University of Virginia, we described last week how the driving force over the past 20 years has been a relentless increase in spending. Expenditures in the academic division of the University of Virginia, fueled by an expansion in salaries, increased 135% between 2002 and 2022, far outpacing the 59% rise in the Consumer Price Index and 20% increase in enrollment.

But that’s not the whole story. While expenditures were surging, state support for UVa and other public universities in the Old Dominion lagged far behind. Colleges and universities, the higher-ed lobby has argued, have had little choice but to offset public parsimony by raising tuition & fees.

A Jefferson Council analysis suggests that there is some truth to this assertion at UVa but it falls woefully short in explaining the ascent of tuition & fees to stratospheric levels. After adjusting for inflation and enrollment growth, roughly 30% of the tuition hikes have offset the decline in state funding while 70% went toward higher spending.

While coping with stagnant state funding, UVa presidents and Boards of Visitors looked to increased gifts and higher tuition to pay for their aggressive spending increases. Gifts have surged over the 20-year period and now equal state support as a source of funding at UVa. But the bulk of new revenue has come from tuition hikes. Continue reading

Sens. Warner, Kaine Visit Roanoke To Tout New Bridge But City Council In The Dark About Scope of Project

by Scott Dreyer

On a picture-perfect April 12 with a backdrop of the sparkling Roanoke River and dogwoods and redbuds in bloom, Virginia’s Senator Mark Warner (D) and Senator Tim Kaine (D) visited the Roanoke Greenway at Roanoke City’s Smith Park.

The occasion was for the two senators to present a cardboard poster representing a check to Roanoke City for $2.5 million for the replacement of the low water bridge on the popular Greenway just a few yards downstream from Smith Park. The senators stated the funds came from the roughly $1.2 trillion bipartisan infrastructure bill.

An email invitation from the City to reporters claimed the new, higher bridge will not only allow kayakers to travel under the bridge unimpeded (at low water levels) but also help the endangered Roanoke logperch swim up and downstream more easily.
Continue reading