Follow the Money, If You Can

sara_carterby Sara Carter

With all the negative headlines about local government budgets these days, many people would like to know how to tell if their locality is fiscally well managed or headed for trouble. Are there indicators that can tip us off that finances are deteriorating before the situation spins out of control?

Local budgets can be deciphered, but only if you have a tremendous amount of time and energy. Unfortunately, few citizens do. Even more unfortunately, not all elected officials do either.

Frequently, people will point to a city or county’s Comprehensive Annual Financial Report (CAFR) as a source of information. The CAFR, the product of a locality’s annual required audit, does provide insight into a locality’s financial performance. It tells whether the locality is practicing good financial standards, and it gives valuable data about how much money a locality has and where it is going.

A good outside auditor is a valuable resource to a county’s staff and board of supervisors. Auditors review all the elements required to close out the books for a given year but also provide insight into how finances are trending over time. They act as consultants for staff regarding best practices, and offer suggestions on what could be done better. For rural localities, the auditor’s consulting insights can be even more important than the CAFR itself. The presentation of the annual audit is an opportunity to have one of the most informative discussions of the year. Unfortunately, in too many localities, the CAFR is never presented in public, or presented with no public discussion. That is a lost opportunity.

The CAFR provides only part of what citizens need to know. Another source on your community’s financial well being is its bond rating. Here is the thing, though: Most small communities aren’t even rated. They can follow the best practices of AAA localities, but they won’t get a rating from the big guys.

So, if you want to know whether your community is attractive to lenders, you could listen to the financial analysts who give presentations regarding options for refunding or taking out more debt. Bear in mind, however, that the job of these analysts is to find ways to do these things. So, in order to gain perspective as to whether or not your community is doing well, you should to compare these presentations to those of similar-sized jurisdictions.

There is no one correct answer for how much debt is too much. It depends. How much growth is occurring in the tax base? Will the increase in the base cover a higher debt burden? What is the overall state of the county’s facilities? If you have a high debt load but all new facilities, the maintenance costs will balance out with the debt costs. On the other hand, if you have a relatively high debt burden, and your facilities also have relatively high maintenance costs, you are going to have a nightmare.

Several measures give an idea of how the debt looks. One was highlighted here on Bacon’s Rebellion last week: debt as a percentage of the property tax base. Another is debt as a percentage of the total budget. Yet another is the cost of debt service as a percentage of the locality’s budget, and what percentage of the debt that will be paid off in ten years. Again, none of these are particularly useful without understanding the local conditions and the political will of the community.

Citizens tend to pay attention to only one indicator of fiscal health: the tax rate. If a locality has a “reasonable” rate, and is not raising taxes in a particular year, chances are that citizens will be happy with the locality’s overall situation, even if all other items are a mess. In a year when the rate is being raised, citizens will vociferously complain, even if the reasons for the increase are sound, and the financial practices are all correct.

Now, where the real indicators of financial health can be found is in the county budget. Where is money being spent? How is it being spent? Even those questions require a tremendous amount of knowledge of local conditions.

For example, in Appomattox County, we own a large number of buildings and facilities. There are four schools, an old school used for a variety of purposes, an old courthouse, four voting precincts, two community buildings, a county administration building, a court building, a school board building, a school maintenance shop, and four other buildings housing various departments that serve the public. There are also seven places to take trash, an old landfill, a community park, and an industrial park. The money that is spent to heat, cool and maintain these buildings and facilities is spread throughout the line-item budget. Every facility has a constituency that would like to see it maintained, and likely improved. But there is no real constituency for the fiscal hard choices of eliminating some of these facilities or considering consolidation.

That is the level of complexity in a locality of 15,000 people for just one budget consideration. Then consider other basic services and state mandated programs like the Child Services Act (CSA, previously the Comprehensive Services Act) or storm water. Adding another layer of complexity is assessing how thoughtfully and efficiently your locality is spending money. This may be the most tedious and challenging part of the equation, but it is also the one most likely to be ignored. Both citizens and elected bodies tend to focus on whether the budget balances and whether a tax rate increase will occur.

Really, given the complicated nature of public finance and the competing pulls on local elected bodies, it is a credit to professional staff and auditors that more localities don’t have serious issues. The real challenge for citizens is this: Don’t wait for your locality’s fiscal problems to explode. You’ll have plenty of warning… if you are paying attention.

Sara Carter serves on the Appomattox County Board of Supervisors.

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42 responses to “Follow the Money, If You Can”

  1. LarrytheG Avatar

    Excellent commentary and I have a question since you are actually walking-the-walk.

    What do you NEED to do this job better – for you to know for yourself if your county is in good shape and proceeding on an even keel?

    And what would help citizens know that your county is in good financial condition other than “pay attention”?

    thanks for contributing!

  2. TooManyTaxes Avatar

    Ditto re: Larry’s complement. An excellent article.

    In point of reference, Fairfax County has had, revised and followed ten principles of sound financial management since the 1970s – a time when I probably didn’t even know there was a Fairfax County. The County Executive and BoS have worked hard to comply irrespective of politics or economic conditions. While there are many things about which criticism of the County is appropriate, this long-term commitment to some level of fiscal sanity is not one of them.

    1. Sara E. Carter Avatar
      Sara E. Carter

      There is no doubt that these kinds of policies are EXACTLY what needs to happen in order to manage a locality’s fiscal resources over the long haul in a way that is responsible and responsive to the locality’s political landscape. Many of the larger jurisdictions have had similar policies in place for decades. Henrico, for example, saves when times are good, and spends down the savings when times are bad. I understand their real estate rate has been stable for decades. Chesterfield, too, has a series of policies in place to address financial responsibility in a way that honors the values of the community. I think the question for me becomes- how do we have that conversation, and set those values, in a rural jurisdiction, with fewer financial and staff resources? It’s a good challenge. Thanks for the thought.

  3. LarrytheG Avatar

    @TMT – that could serve as a model for other counties.

    Do they address the Petersburg problem of not paying vendors on time? How about their pension funding?

    how about levels of service and quality of life?

    does Fairfax have guideline metrics they follow for those?

  4. Hill City Jim Avatar
    Hill City Jim

    The Commission on Local Government attempts to measure the Fiscal Stress of Virginia’s local governments. Unfortunately, a few years ago they changed the methodology when they stopped factoring the rates of change from previous years with respect to their Revenue Capacity and Revenue Effort ( for their stress calculations) although they do show a rankings for that measure over the previous few years. When I was a legislative aide there was discussion about financing local units via this stress index but reasonable legislators prevailed saying that “if you paved your streets in gold it was a self imposed stress…and we are not funding that.”
    Their reports can be found at

    1. LarrytheG Avatar

      HCJ – Thanks !, fyi – the link you gave just goes to the overall directory

      when you drill down to this year’s report – you get this :

      is this the one you are referring to? it looks like they compare all th way back to 2005 on a trend basis…

      and for instance, Petersburg looks not good all the way back to 2005… page 56

      Buena Vista pops us also….as well as Martinsville , Lynchburg is up there also

      am I going wrong somewhere?

      I wonder how many folks in most localities know that this report exists and is available?

      I bet it’s not on most localities website…

    2. Sara E. Carter Avatar
      Sara E. Carter

      I think you have given me my weekend reading assignment.

  5. Les Schreiber Avatar
    Les Schreiber

    There is something amiss at the state level. The unemployment level is one of the lowest in the country .But the state has a billion dollar plus shortfall.This is a bit infusing.We would usually equate this type of employment with a good fiscal condition,

    1. TooManyTaxes Avatar

      Les, things are still quite ugly, albeit better, in NoVA, most especially in Fairfax County. Commercial real estate vacancies remain at levels not seen since the early 1990s. Government contracting, while up some, is down, down, down, from last decade. There is very little job growth at upper levels. Rather, businesses are hiring low-paid jobs, in the service industry. And more and more middle class people from all races are leaving Fairfax County because of higher taxes and cost of living and traffic. I’ve read that, but for foreign immigration, Fairfax County population would be declining.

  6. Cville Resident Avatar
    Cville Resident

    I applaud you, Ms. Carter. I’ve posted on this blog a lot about how complicated the world is becoming and how difficult it is to actually “know” what’s going on. It’s simply not the 1980s or even the 1990s any more. I think your post should remind all of us that the world of contemporary finance is difficult even for accountants and lawyers to understand. A lot of criticism is unwarranted as those tossing the darts would be just as lost if they were sitting in “the big chair.”

  7. Kudos to Ms. Carter and I echo all the good things that has been said about her post.
    As one who dug through local government budgets and CAFRs for years, it takes work. The former generally does not has a standard format while the latter is pretty much restricted in how the information is laid out. Both documents are likely available on a locality’s website; if not, there they should be copies for public inspection at the library or at the government offices. But it takes an involved public to review the information. Unfortunately, there is usually a cadre of public watchdogs who do the work and drive the discussion.
    Yes, no one likes to have their property taxes raised or remain level when their assessments go up. On the other hand, everyone likes the services they receive from government, to a varying degree, and are surprised when governments are subject to the same economic forces as everyone else. Then there are mandates. Citizens don’t understand how much of the local budget and tax rate are driven by state and federal mandates. Ms. Carter does a good job of talking about that.
    There is also the argument, made prominent by Governor Wilder during his administration, of choosing between necessities and niceties. And, what are the appropriate functions of government.
    RE: Fiscal stress – The original fiscal stress measurement was developed by the Joint Legislative Audit and Review Commission in the early 1980s and taken over by the Commission on Local Government after JLARC moved on to something else. The CLG staffer who nurtured the fiscal stress report for decades was a thorough researcher and no one could ever find fault with his input data or results.
    You can find fiscal stress measures going back as far as 1985 or 86, and the methodology remained the same with one or two minor tweaks due to changes in available data or seeking a better measure. It never gained universal acceptance, but was used as a component of a number of grant programs for years.
    I chuckle at the comment reported by Lynchburg Jim. Paving the streets with gold. I can see the local government saying to its taxpayers, “Look, if we lay down a couple of courses of bullion instead of cobblestone, we will get more money from the state!” And people wonder why I walked away from a career dealing with legislators…Bosun

    1. Sara E. Carter Avatar
      Sara E. Carter

      There are quite a few people in Appomattox who have heard me use the same phrase you did- “Is that an appropriate function of government?” The things we need to do, we need to do well. But, by the same token, we need to not pick up someone else’s functions. Every new idea/program/policy should be weighted against the question of whether it is a legitimate function of local government, or if the need would be better met elsewhere.

    2. TooManyTaxes Avatar

      There also seems to be a big disconnect between those who want more services and those who have to pay for them. Watch parents of school-aged kids at a budget hearing. And watch them after their kids have graduated from high school.

      Also, there is a big difference from what a state or federal mandate requires and what the local government does to fulfill those mandates. Fairfax County Public Schools are notorious for arguing their spending on X is mandated by X or Y statute. But dig deeper and one can often find the Division goes way beyond what is required. This is plain dishonest government.

      My favorite example is Special Ed services for children with Autism. Not cheap by any means. Several years ago, I asked the state Dept of Education what was required. I was told one teacher per six students or one teacher and one aide for eight. At the time, FCPS was generally staff at one teacher for two or three students and, in many cases, it was one-to-one. Yet, the Schools had the brazenness to insist they were just meeting a mandate. Lies, lies, and more lies.

      1. TMT – And you can find many localities that do not or barely meet the mandate you described and others.
        Yes, Fairfax County has what many people consider “gold plated” services. That’s one of the reason people want to live there.
        It has been article of faith, but hard to document, that the revenue the state receives from Fairfax pay for services in many other localities in the Commonwealth. The citizens of places like Wise County, Brunswick County and many others, thank God every day for Fairfax County.
        To you point about parents with school children being active in budget hearings and then disappear when their children move on, that’s me. But I am reminded that the quality of the education my children received was due to citizens before I arrived here pushing for better quality services. Also, there is a reason that every real estate agent in Fairfax or where I live keeps a copy of the latest SOL scores in their pocket and routinely mention ads in which school district a particular property is located.
        Maybe what you and others could do would be to find out how much Fairfax County spends above the required minimum of the 500+ mandates, then calculate the savings on the tax rate it would be if the county did not do that.

        1. TooManyTaxes Avatar

          Bosun – I (and a number of others) have been trying for years to get Fairfax County and its Schools to prepare a budget that shows exactly what it costs to comply with requirements of the federal and state governments. This would form a base, upon which they could propose alternatives as to what they would like to do in addition, along with the extra costs, expected benefits, and how those benefits would be measured. We’ve been ignored by staff, high level administrators, school board members and supervisors. Why? IMO, because they want to mislead the public and fund what they want to fund while blaming the feds and Richmond. (It’s the Dillon Rule’s cousin-a handy tool.)

          Please note that I am not arguing that Fairfax County or FCPS should do the bare minimum. There may well be very good reasons to do more. But then the case should be made to the public.

          This is not good and open government.

          1. TMT – I understand your point and I applaud your efforts. Sometimes it’s too easy to hide behind state and federal mandates.
            OK, I am going to resurrect some long unused brain cells here…probably back in the mid-2000s I attended a meeting at the Fairfax County complex to talk about mandates. It was revealed at the meeting that there was someone within the bowels of Fairfax government who, at that time, kept track of all the mandates with which the county had to comply. They had the massive document listing all of them [some of which were mandates, but not really, like required to have a clerk of court, etc.]. I THINK that there was a cost associated with each mandate, but could not find out at the time how they came up with the cost figures. I kept trying to get an updated copy of the report to no avail..
            Hey! I’m not totally ready to throw in the towel. Did a quick search on the County webpage and found the report for FY 2004!
            Perhaps you could request that the county begin producing the report once more. Bosun

          2. TooManyTaxes Avatar

            Bosun – I remember the document well. A number of us tried to probe what was under the hood. As I recall, the cost figures included what the County spent on the function/program, rather than what it would cost the County to comply with just what is required.

            Similarly, at a community meeting, then School Superintendent Jack Dale tried to blame certain cost increases on NCLB. When pushed, he admitted the Schools would have spent the money irrespective of NCLB. But it was an easy out to try to blame the feds for the spending increase. Fairfax County is far, far away from full and complete disclosure on the costs of mandates.

            I’m not arguing mandates are not real and costly. But they are also used regularly to justify optional spending decisions.

          3. TMT – I did not look at the number closely in my most recent viewing of the document, but I seem to remember that they were just line item budget numbers transferred to the appropriate box, not the true cost of the mandate.
            As I have said before and from my experience, it would take a lot of work to even determine what FCPS spends to comply with the minimum standard of the number of mandates in the education field, which is the largest sector of the state and federal mandates on local governments. If the task could be accomplished on the top ten, it might be helpful.
            Fairfax and other urban counties, Henrico, Chesterfield, Prince William, Loudoun, etc. have the “luxury” of being able to provide high quality services, especially in education, because that is what their residents have come to expect and why they have no trouble attracting new residents. It is a shame that they have to “hide” behind state and federal mandates as the reason for providing those above mandated standards services. It is nothing to be ashamed of, in my judgment.
            It’s the 80+ other counties and many cities that often have to “bite the bullet” and raise taxes/reduce spending/cut non-mandates services in order to meet minimum mandate standards. On the whole, many of their residents are OK with that and accept it, some reluctantly. Bosun

  8. S. E. Warwick Avatar
    S. E. Warwick

    Curious that you do not mention Goochland County.
    In 2011, the county had public utility bonds rated lower than those of Detroit, abysmally dysfunctional local government, and a treasurer that was dipping into public coffers. Voters replaced four of the five supervisors and the entire school board at the polls.
    In 2015, Goochland obtained a AAA bond rating from Standard and Poor’s.
    Along the way, the bond issue that looked ready to swamp county finances was tamed, our schools became highly rated, and economic development is on the rise. The county real estate tax rate remained steady at 53 cents per $100 of assessed valuation.
    No magic, just a lot of careful thought and hard decisions by appointed and elected officials committed to getting a handle on finances, and making transparency a policy, not just a buzzword.
    The annual county budget, which is posted in its entirety on the website,,provides a great deal of information about Goochland and how its money is spent. Our school division has a similar policy.
    Most people pay little attention to local government until it is too late.

    1. Sara E. Carter Avatar
      Sara E. Carter

      I didn’t mention Goochland only because I was sticking with what I know best, and I am sure that there are far more qualified people out there who can make their case better than I can. However, Goochland is a great example of a small locality doing an amazing job. They are, in fact, the smallest locality to achieve a AAA bond rating in the Commonwealth. There is no question that the achievement stems from a focused board, an involved public, and an incredibly qualified, energetic County Administrator. The assembled team turned finances around there in a timeframe that would have been unbelievable if promised in advance. All deserve kudos. The question now is this: can even smaller localities, without Goochland’s enviable tax base, achieve similar results? It is difficult, as well, to attract the kind of talent that Goochland has. On the suburban fringe, there is a much higher community threshold for what is seen to be a “reasonable” salary for the incredibly talented and hard working staff members that such a transformation requires. But, I suspect that you and I would agree that the expertise of well-qualified staff pays for itself, especially when they are able to directly impact the bottom line.

  9. Cville Resident Avatar
    Cville Resident

    Agree Bosun. I chuckle when I hear a neighbor complaining about property taxes. I can point to a lot of federal and state gov’t services that are redundant or unnecessary. But I really can’t say that I have a lot of heartburn about local taxes. I tend to find I get actual tangible services from local gov’t. I also find the “don’t raise taxes” mantra a bit tiring…..anyone in the private sector understands that yes, in most years, costs go up. And the private sector may cut a little more than the public sector at times, BUT…the private sector raises prices for goods and services quite often as well to pay for those costs. If a gov’t provides city streets/maintenance and the cost of asphalt and other materials go up, I imagine that I’ll pay more in local taxes. I don’t get the screeching that I sometimes hear. Ms. Carter makes a good point about “the tax rate.” To so many people, the only thing they care about at a local level is the real estate tax rate. Most years of “cutting a penny or two” to satisfy a taxpayer group come back to bite you later on in deferred maintenance/capital items.

    1. TooManyTaxes Avatar

      There is a lot more complaint about real estate taxes in Fairfax County. And I hear that from both Democrats and Republicans. Tax bills have increased well above the rates of inflation, population growth and increases in personal income. A number of supervisors have called the tax increases unsustainable even as they vote for them.

      While I’m not a member and don’t subscriber to all it advocates, the Fairfax County Taxpayers Alliance publishes data showing that, since 2000, real estate tax bills are up by 154%, with inflation increasing by 49% and personal income up by 35%. I think that these facts will cause voters to approve the meals tax referendum this fall.

      Several things are causing these levels of increases: County, but not teacher, salaries that are generally above market; pension plans that significantly exceed what employees of neighboring jurisdictions receive; health care plans that are much more generous than Uncle Sam provides (and his is an excellent one); the LCI formula (state K-12 funding) that unfairly ignores the higher cost of living in Fairfax County; a historic failure of the County to negotiate reasonable proffers; a general failure to specify and use performance metrics; a culture in Fairfax County government and Schools to want to be all things to all people; a generally clueless media; a generally weak commercial real estate market; and a massive change in demographics. While there are still many very wealthy people (who can buy and sell my a** several times over) and quite comfortable people (including me) in the county, a lot of the comfortable and middle class people have left Fairfax County and have been replaced by a large number of poor people, often with larger families, and almost always in need of more and more expensive services. Immigration has brought the county a significant number of engineers, doctors, scientists, professors and entrepreneurs, who have added immeasurably to the county and its coffers. But they are outnumbered by unskilled workers who, despite generally being hardworking and law-abiding, have a need for many more services and who tend to pay fewer taxes. Keep in mind, changes in demographics are not right or wrong – just real.

      When you combine a County that likes to spend money with a change in demographics that adds people who pay less in taxes, but need more in services, the result may be an unsustainable path where something has to give. Fairfax County and its Schools need to reinvent themselves to operate successfully in a radically different world than which it has operated in the past.

  10. Hill City Jim Avatar
    Hill City Jim

    The stress reports allocate a factor to revenue capacity, effort, incomes but I think (underlined) that it no longer assign a factor to trajectory. I have been following these reports for more than 20 years…they normally come out just as the GA is in town in January. One big problem is using motor vehicles as a proxy for a portion of capacity, in particular when they assume every motor vehicle has the same worth…and I know here in Lynchburg we do not have many Bentleys . Because every local Commissioner establishes which methodology to assess vehicles, unlike Real Estate which is reverted to TVOP (100% FMV), there isn’t an accurate measurement of that part of the taxable base, or capacity. I believe this alone understates the richer localities capacity and extraction rates (effort) while at the same time overstates the poorer localities capacity.

    There is a coalition of Virginia cities called First Cities which attempts to lobby on behalf of the Richmonds, Lynchburgs and Petersburgs and have been complaining about the levels of fiscal stress in cities for years.

    The money cities get from the annexation moratorium is not enough to solve these issues.

    1. HCJ – the only money that cities got because of the moratorium is what’s known as “599” funds for police. It got froze several time because of state budget problems and never kept up with where it should be if it had not been frozen. In one of the recessions, the cities tried to either get the moratorium on all cities lifted or an increase in “599” funds, but were not successful at either as I recall.
      It is interesting that if you look at the “temporary” moratorium law that is passed every so often that covers all cities, there is usually a phrase that states if the budget does not contain “599” funds, then the moratorium is lifted. I use to have to go around and remind the patron of the extension bill because they forgot to include that language. Been funny if the moratorium got ditched because someone was not doing their job. The race to the courthouse to file for annexation would put Usain Bolt to shame. Bosun

  11. Sara E. Carter Avatar
    Sara E. Carter

    Thank you all for your kind comments and productive thoughts! You all have given me much to think about, and probably fodder for the next missive.

  12. LarrytheG Avatar

    Very nice thread!!! I’m still a little intrigued by the Commission on Local Govt report , especially when I look at the top-ranked stressed localities.

    I know school funding is based on it but aren’t other county govt positions for things like law enforcement, courts, social services also based on it?

    the State money for this is not shown the way that state money for SOQs is shown.. not as easy to see or understand although DSS is extensively reference in the narratives.
    And again – I bet if you asked 100 taxpayers in a given jurisdiction if they knew of that report and their localities numbers, 99 would not have even heard of it much less know where to go find it and it would not be on the local website on in the budget/CAFR.

    I think – the theory behind it – and the fact that is is actually implemented and real money from the state actually involved is very relevant. I’m not even sure how this shows up in the local budget… except for the SOQ money which is shown clearly in the first pages summary info.

    just went a looked – and yes – down in the budget..

    “Compensation Board Revenue ($5.5M) State Code §15.2-1600 et seq.

    Revenue Description: The County receives partial reimbursement from the State through its Compensation Board for the costs of elected officials and their staffs, who perform State- mandated and local functions. Elected officials for whom partial reimbursement is received are the Clerk of the Circuit Court, Commissioner of the Revenue, Commonwealth’s Attorney, Sheriff and Treasurer.”

    1. Larry-the fiscal stress measures themselves are not used as a sole factor in any funding decisions. There are some programs, which I use to know, that either uses the stress measure or one of its components, revenue capacity and revenue effort, in deciding funding decisions.
      The Compensation Board’s funding decisions are the ultimate black box, but they are better than they use to be. The Board is an artifact from the Byrd Machine era when it was use to enforce discipline at the local level. Back in the day, counties did not do much, so the state funded positions were valued. That all changed as counties became more urban, but the Comp Board positions still are powerful in the local political machine. Use to be that even up into the 2000s when the D’s controlled the board, the local constitutional officers who were D’s were ‘favored’ in request for additional positions. When the R’s took over, then the funding decisions went to their local people. Not sure that has changed, but the Board appears to try to be more even handed.
      It is interesting to note that using the Comp Board calculations for local positions, the last time I checked there were many authorized, but no funding was available in the budget. Bosun

      1. LarrytheG Avatar

        the concept of calculating “stress” and “revenue capacity” are interesting…. and yes.. subject to claims they are flawed.

        but it is an attempt at the State level to assure some minimal level of services for PEOPLE in those localities – that in some cases, those localities would not provide services for.


        isn’t that a central aspect of the concept?

        1. I am not sure that was the initial purpose of the fiscal stress measures. They were meant to be one of a relative number of way to gauge the health of Virginia’s counties and cities. Many tried to make them the be all and end all [Virginia’s First Cities Coalition], but that was resisted by the CLG who fell heir to the measures. Bosun

  13. Hill City Jim Avatar
    Hill City Jim

    Basic school aid is somewhat based upon the Composite Index formulated many years ago when local government’s revenues came from 50% Real Estate taxes, 10% from sales taxes and 40 % from other tax & fee revenue. Because of the various taxes that were collected, cities could do meals but counties could do a coal tax, they decided to use Income as a proxy for that 40%. Through the years this ratio has changed, last I remember the ratios are closer to 49% /9%/42%. , JLARC and now CLG have been trying to reduce the income proxy for years. One thing they can measure is the average cost of vehicle decals and they then multiply that by how many vehicles are in your locality times your decal rate and thus we have a new measure of revenue capacity. And they could do this with vehicles if there was a statewide uniform vehicle assessment, i.e. NADA wholesale, but the Commissioners will fight this to the death as they believe it is their God given choice. So CLG knows the average tax revenue collected per vehicle is around $250 and every locality is assigned that much capacity times their vehicle count…and this is very inaccurate.
    By using these 2 measurements, they have been able to reduce the “income proxy” down to about 28%.
    You should read the report in it’s entirety and then check some of the reports they footnote.

  14. LarrytheG Avatar

    I’ll head back and read more but I thought the State with the Gilmore thing had a uniform system for valuation, no?

  15. LarrytheG Avatar

    I did some more looking around but did not see anything much more than a slew of slice and dice of the various metrics they use in assessing the potential ability and actual capacity.

    What I’d like to better understand is the rationale for doing this – and what specific functions of local government are subjected to it.

    We know that roads are VDOT, k-12 is SOQ and that to some level Constitutional officers, social services, etc.. etc.

    I presume the intent is to ensure some level of services is provided at the county and city level commensurate with what the state has decided is minimally required.

    I think that concept is significant in that localities are not left alone to decide what they want to decide is “an appropriate govt function” but rather the state has decided what is (and by omission what is not).

    so localities are forced to provide services to kids, the elderly, handicapped, etc… it’s not optional.

    VDOT enforces road and sign standards… and the SOQs require certain staffing levels of certain kinds of staffing…

    Ditto with Courts and laws…. auto registration, licensing.. etc.

    what’s not clear is what services are optional AND not funded by the state – and left up to the cities and counties to provide – or not…

    What I DID find was a catalog of mandated Federal and State laws which was 500+ pages long.

    Even then – there is latitude and most of all – ironically on fiscal discipline. There are no apparent thresholds where the state asserts control – just requirements that some level of required budget and disclosure to the citizens.

    Finally I do not see huge costs attributed to Federal and state regulation – but instead things that the localities cannot not – like pollute… or damage property rights, etc.. I’d actually like to see an accounting for mandatory costs.

    1. First, understand that the catalog of mandates contains all mandates, but divided into categories. I’ve forgotten the proper names, but the first two are mandatory and optional if you provide a service [i.e., if you have a sewage treatment plant, you are subject to the state and federal clean water regs.].
      Second, there are unfunded mandates and under-funded mandates. Localities will contend that the SOQs are an underfunded mandate, the Gen’l Ass will say, “Nay, nay”. It is an argument that occurs every budget year when they rebenchmark the SOQs.
      What is an appropriate function of government? Do you really need a library in the era of new and used bookstores, Kindle, free books on the internet, etc.? It is an argument that has been going on in Virginia since 1607.
      The best thing is to look at the state and federal laws. Free schools, clean water and air, highways, etc. That’s how it is decided.
      Generally speaking, the feds pass the responsibility to the states who then dump it down to the local level with some funding. Standards are set – 1 special teacher per X number of Autism students, etc.
      There was an interesting study done in the 1980s or 1990s about the constitutional officers and who should pay for what. All constitutional officers provide both state required services and local services. Think about the sheriff. He provides state services – court security, court process, etc. and local services – law enforcement and jails. The state pays for the former but not entirely for the latter. Same with the other four constitutional officers. The SOQs are similar as TMT pointed out. Fairfax is paid for the state minimum requirement and kicks in extra $$ for Autism students. Many localities also do the same, especially in education.
      Cost of regulations and mandates. That’s the holy grail. There was and perhaps still is a program to assess the cost of a certain number of mandates on local governments on a yearly basis. Good thought, but hard to implement, and it went through at least one revision in the mid-2000s and the process collapsed on itself. How do you determine the cost? Do you survey all 135+/- counties and cities in the state? For each, say, mandatory mandate? Now you are talking about another mandate that would require more state employees to manage the program. We had a hard enough time getting responses back from four or five localities on most mandates.
      Most localities only have a rough estimate, at best, of the cost of the more expensive mandates [e.g. SOQs, CSA, etc.], but how about the one that requires sheriffs’ cars to be painted a certain color? Or that his officers receive mandatory training on a regular basis? Then what do you do about the “optional” mandates? If you don’t want to comply with clean water regulations, then don’t operate a sewage treatment plant.
      Around state budget time, you will see figures provided by the local government associations and other lobbying groups about the cost to localities of the big, expensive mandates. They are usually the worst-case scenarios, but worthy of consideration.
      As one who labored in the vineyards of mandates for too many years, it’s a difficult task. A few other states have tried to get their arms around the costs, but with little success. There are too many variables. Bosun

      1. LarrytheG Avatar

        well SOQs would be easy – they appear as a line item “required match” in most budgets.

        but without actually detailing such costs – we never get a real answer to the folks who spend most of their time asserting that regulation is ‘bad’, expensive, kills jobs.. takes food out of the mouth of babes.. etc.

        right now we have no shortage of think tanks and agenda-driven organizations who have a hay day of cherry-picking examples of “bad” regulation to support their premise that regulation, in general, is an evil top-down aspect of govt and today that sentiment fuels a generalized anti-govt political agenda.

        so I’m all for breaking it out in numbers and letting people understand what it might mean to drop SOQ match..especially given the fact that most counties add local discretionary money on top of it

        I think what we’d find is that poorer counties would , if they could, not pay for such minimum standards. really bad schools, no trained LE, no 911, no social services, etc…

        1. TooManyTaxes Avatar

          SOQs – Fairfax County School Board members regularly add functions/positions to the SOQ that are not included with an argument that the functions/positions are impliedly required. Then they argue it’s proper to set funding obligations for those functions. This is crooked government.

          Rural Virginia, like the rest of rural America, needs to consolidate local government entities and/or the provision of services. Using Cooper Center population estimates for July 1, 2015, the average population of cities/counties in Virginia is 63,000 and the median is 24,400. Consolidation should, at a minimum, result in localities with a population of at least 25,000. This can occur over time. State aid should be adjusted where there is no progress to consolidation.

          1. LarrytheG Avatar

            well, lets be clear – Fairfax, like a lot of other school districts in Va CHOOSES to spend more on education that the SOQs require.

            And, invariably, they also CHOOSE to NOT identify those discretionary expenditures in the budget but instead assert that they are “like” the rest of the budget in terms of what is “needed”.

            As a result – almost no one really understands which courses are required and which are are not even though most that are actually required are SOL-tested.

            and make no mistake – if these non-SOL courses were no longer funded but removed – holy hell would ensue and schools boards would be voted out en masse -as well as BOS.

            This is a case where people SUPPORT “costly regulations”!

            the total amount of money so provided on a discretionary basis – that IS identifiable – it’s usually in the same line item areas of the budget where the required local match is.. often the line below it .

            In Spotsylvania county -the amount is about 40 million dollars – about 30+ cents of the 87 cent tax rate.

            and this also goes to that question: “is this an appropriate function of government?” – it’s not that education itself is or is not an appropriate function – it’s how much.

            I would posit that in many localities this extra money – over and above what the state “mandates” is more than all the other “mandates” in the county budget.

            I’m not arguing against it – but what I’m saying is that most folks do not have an accurate view of what is “required” spending and what is actually “discretionary” and has become a local “mandate”….

            again – most folks in most counties don’t have a clue as to what part of the School budget is not mandated by the State but instead is determined to be so by local govt.

          2. TooManyTaxes Avatar

            There is a good argument that larger school districts should offer a variety of electives. My kids took some while at Langley HS. And I don’t begrudge other people’s kids from doing the same. There reaches a point, however, as the questions: 1) is there sufficient demand for an elective and the same elective at each high school? and 2) could electives be offered more efficiently?

            Some electives have class sizes at or below ten. Meanwhile, class sizes for non-electives, middle school and elementary school classes are often going up year after year. My view is public schools should be geared to address the needs of the typical student. Of course, we need to address children on both ends of the spectrum, but not at the expense of the vast majority of kids in the middle.

            Schools should use electronic media to teach many electives on a multiple school or even district-wide basis or through “academies” where students are bused for certain electives. Some Fairfax County high schools offer automotive courses. Others offer foreign languages, such as Korean. Consolidation of instruction allows both the offering of more electives and a reduction in the number of teachers required to offer those classes. And salaries and benefits are the big cost drivers.

            Ditto for AP, IB and other advanced classes.

  16. LarrytheG Avatar

    All good things TMT but extra cost, not mandated and most folks have no idea how much that cost is – and it’s substantial.

    In all likelihood – a third or more of the Fairfax county school budget is for optional courses. Probably a third of your tax rate is for these courses – and remember you are paying for their health care and their pensions… their pension obligations…also.

    again, not opposed – but pretty convinced that most people don’t even what that cost is to the property taxes they pay.

    I see on page 57 of this SOQ cost document for Fairfax that their required match is about 820 million. How much is the total Fairfax school budget?

  17. TooManyTaxes Avatar

    Larry, FCPS’s budget is $2.7 billion. From the website Its $2.7 billion budget is primarily funded by Fairfax County (71.2 percent) with contributions from Virginia (22.9 percent), other sources (4.3 percent) and the federal government (1.6 percent). More than 85 percent of the budget goes toward instruction, and the average cost per student is $14,432.”

    1. LarrytheG Avatar

      TMT – when you say “instruction” you’re talking about 2/3 or more of courses that are not mandated for SOQ/SOLs.

      They are totally discretionary and Fairfax chooses to tax citizens extra to pay for it – that’s the truth.

      saying ” instruction ” like it’s all required is simply not true.

      2/3 or more of it is totally at the discretion of the county.

  18. Reader Shane Farthing recommends the following resource for anyone wanting to learn how to budget better: “An Elected Official’s Guide: Interpreting Local Government Financial Statements – How to Avoid 25 Common Mistakes eBook.”

    1. LarrytheG Avatar

      not free unfortunately for the curious but a good outfit – Government Finance Officers Association and I wonder how many elected officials read it .

      And I have a suggestion – that for the job of Board of Supervisor than it have a Job Description that includes a curriculum of learning like this – but also another – the VDOT Board of Supervisors Manual… VACO boot camp, Sorensen School of Leaderhsip, etc.

      In other words let people know that this is not a get elected and sit on your butt type job. That it takes real effort to be a skilled BOS and it’s not just what you want to do – there are skills and knowledge needed to do it right.

      And then I’d do this – I’d pay the ones that complete the training – substantially more than those who do not.

      establish a pecking order for those who really want to do the job right verses those who just want to sit on the board.

      Over and Over when I watch our own BOS antics – I cringe at their painful lack of knowledge about really basic things… and it’s not inconsequential – mistakes are made – costly mistakes – because they CHOOSE to be IGNORANT of things they need to know if they are going to be able to make good fiscal decisions.

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