Think Henrico Government Has Cut Back? How about Henrico Citizens?

No cherry picking of data on Bacon's Rebellion.
No cherry picking of data on Bacon’s Rebellion!

by James A. Bacon

As Mark Twain famously said, there are lies, damn lies and statistics. Anyone can slant an argument in his favor by cherry picking statistics. I try to avoid that. As proof, I will offer some numbers regarding Henrico County government expenditures over the past decade that make my opposition to the Henrico meals tax a tad more difficult to maintain — but only a tad.

As faithful readers of the Rebellion know, I oppose the 4% meals tax that the Henrico County political establishment wants to impose upon its citizens, making its case with all manner of facts that are literally true but highly deceptive when shorn of context. It is in my partisan interest to suggest that Henrico has been less than parsimonious in its taxing and spending in order to undercut its justification for the tax. I could make my case by citing total government expenditures (which excludes, I believe, state and federal school funding) reported in the county’s Comprehensive Annual Financial Report for 2012:

2003: $514,193,000
2012: $691,000,000
Percentage increase: 34.4%

That sounds pretty profligate. But those numbers are misleading. The county’s population increased 13.6% over the same decade, and inflation was 24.8%. A fairer measure would be to compare county spending per capita adjusted for inflation. Those numbers look like this:

2003: $2,315
2012: $2,194
Percentage decrease: 5.2%

County officials would stand on much firmer ground citing those numbers than the phony-baloney claims that they whacked $115 million from “the budget,” which includes back-tracking on budgeted spending increases, and eliminating 646 positions from “the budget,” which includes deleting positions budgeted but never filled. (The county has a no lay-offs policy.)

Honesty compels me to acknowledge that Henrico County has cut real spending over the past decade. However, that’s not the end of the story.

While Henrico did restrain spending, that achievement has to be seen in the context of what’s been happening to the income of Henrico residents over the same period of time. Unfortunately, I wasn’t able to find the numbers this morning for Henrico residents specifically, but I did find them for residents of the Richmond metropolitan region. Between 2005 and 2012, regional per capita incomes declined on an inflation-adjusted basis from $32,399 to $28,943 — or 12%.

Now, one more adjustment to make sure we compare apples to apples. My source on Richmond regional incomes went back only to 2005, so we need to compare inflation-adjusted expenditure cuts and income cuts since 2005 (not 2003, as I did above).

Decline in Henrico spending: 10.8%
Decline in Richmond regional incomes: 12%

Assuming Henrico incomes fell in line with Richmond regional incomes, that means citizens retrenched more over the past eight years than the county did.

Consider also the state and federal tax increases that citizens have endured — the 2.3% medical device tax and reduced income-tax deduction for medical expenses thanks to Obamacare, Gov. Bob McDonnell’s transportation tax hikes, and the Obama tax hikes on “millionaires and billionaires.” Then throw in the sky-rocketing cost of medical insurance and college tuition, and it’s entirely understandable that ordinary citizens in Henrico (and Chesterfield, which wants a 2% meals tax) feel besieged. The last thing they need is a tax on their catered and restaurant meals. Local governments need to find a way to make do.

Population: Weldon Cooper Center for Public Service, here and here.
Inflation: Bureau of Labor Statistics Consumer Price Index calculator.
County expenditures: 2012 Comprehensive Annual Financial Report.
Richmond per capita income: Department of Numbers

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12 responses to “Think Henrico Government Has Cut Back? How about Henrico Citizens?”

  1. Consider also the state and federal tax increases that citizens have endured — the 2.3% medical device tax and reduced income-tax deduction for medical expenses thanks to Obamacare, Gov. Bob McDonnell’s transportation tax hikes, and the Obama tax hikes on “millionaires and billionaires.” Then throw in the sky-rocketing cost of medical insurance and college tuition, and it’s entirely understandable that ordinary citizens in Henrico (and Chesterfield, which wants a 2% meals tax) feel besieged. The last thing they need is a tax on their catered and restaurant meals. Local governments need to find a way to make do.

    I don’t disagree with you, but I think it’s a bit misleading to include the medical device tax and the tax on high income taxpayers with the transportation-related taxes.

    The medical device tax is imposed on manufacturers of medical devices, not citizens, and it specifically doesn’t apply to items sold directly to citizens. While I understand (and agree) with your underlying assumption (that taxes on manufacturers are passed down to citizens), I think it’s extremely unlikely that citizens in Henrico are feeling anything as a result of the medical excise tax.

    And the “Obama” tax hikes on income, which were approved by the GOP, only apply to a very small percentage of citizens. While Henrico is certainly an affluent county, statistically speaking, most Henrico citizens won’t pay additional taxes due to new tax brackets and rates in the American Taxpayer Relief Act of 2012. So I doubt that most Henrico citizens are actually feeling any pain as a result of the ATRA.

    None of this justifies a meal tax, or the poor manner in which the county has handled the discussion of the tax.

  2. Jim does a pretty good job on these analyses but as JFT points out sometimes something fly through the air which seems wildly not germane…

    I LIKE Jim’s analysis but what it causes me to do is ALSO think about how spending increased – perhaps on a per kid basis in the schools… or on a per capita basis for law enforcement or education, etc.

    and then I think about the State and how it funds education – at least in part on a per-kid basis… and I wonder if that’s how they go about building the education part of the state budget.

    if we went back say 10 or 20 years and looked at what the state was providing – per kid and then looked at it again ten years later.. would we learn much?

  3. Justine Avatar

    I’ll assume that you are opposed to any tax increase at any time for any reason, real or imagined. Which makes it difficult to provide any fact or evidence that would convince you this is not the evil you make it out to be, but I’ll try anyway.

    Henrico spends the second LEAST amount of money per pupil of any county in Virginia – just about $9,000 a year – when the state average is about $1500 a year per pupil more than that. Considering that Henrico has a number of well-regarded schools, I’ll use that as evidence that the school system is spending its money pretty efficiently.

    Criticize the 646 positions eliminated all you want, but the fact is that those are real positions that other employees have had to cover. But the result is that no one was laid off. How many other localities in Virginia haven’t laid off anyone through this entire recession?

    It seems pretty evident that Henrico is not just about spending money willy nilly. The county has a statistic that shows the top 15 localities sizewise in the state, and what an average resident pays in monthly taxes. Henrico is the lowest on the list – something like $160 a month. Loudoun was first at about $325. Chesterfield was about $180 and Richmond $225. That’s not insignificant in my book.

    In fact, let’s compare Henrico to Chesterfield for a second, since they’re similar in many ways. Henrico’s real estate tax is 8 cents lower than Chesterfield’s. Henrico does not charge for ambulance service and does not have cash proffers. Chesterfield does and does. Seems to me if you want to pick on a county for being inefficient, it should be Chesterfield, not Henrico.

    Henrico could raise its real estate tax 7 cents AND implement a 4 percent meals tax and it would STILL be cheaper to live there than in Chesterfield.

    I get that your schtick is just to criticize everything about government spending , no matter what it is or how real the perceived need is, but to me you’re barking up the wrong tree with this one.

    If you’re going to criticize Henrico, why not criticize the 210 other localities in Virginia that currently have a meals tax?

    1. Justine, I typically do oppose tax increases — but just the real ones, not the imagined ones. I take it that you do accept that Henrico’s 4% tax is real, not imagined.

      You make some good points. Henrico does keep taxes low, and it is not extravagant with its expenditures. But, then, I have acknowledged that in previous blog posts. You left out the county’s AAA bond rating. I have lauded the county for that, too.

      I offer three responses.

      First, I pick on Henrico because I live in Henrico. The meals tax affects me directly.

      Second, I expect my county officials to be straight with me and to obey the law. Our county officials have told only one side of the story regarding the meals tax. No objective person can pretend that they have been “neutral” in explaining the referendum to the citizens.

      Third, “good” is not good enough. We must relentlessly strive to be better. Henrico needs to look ahead to the next-generation of governmental reforms: reinventing K-12 education, deploying smart-city technologies and fostering more tax-efficient human settlement patterns.

  4. Justine Avatar


    In response to whether they have told both sides or not, I think that’s a tricky line to walk. Obviously the county favors the meals tax – they’re the ones who put it forth as a question. No one would assume that they would put it on a ballot if they were opposed to it. And the fact is that they’ve held or will hold a bunch of meetings inviting comment and questions about the proposal. I went to one, and sure, the information they presented explained why they believe it is necessary and what the money would be used for.

    But what is the alternative? Do nothing? Hold no public meetings? Don’t explain anything about what they intend to do with the $18 million they are asking for? I understand that the law forbids them from taking sides, and I don’t believe they are. Inherent in the process of explaining themselves to residents is the idea that the facts, as they view them, could be perceived as an endorsement of the issue. But to me, you could just as easily perceive them as facts and then make your own decisions.

    I haven’t heard any appointed official say “You should really vote for this tax!” Elected officials, of course, can say whatever they want to.

    Good is never good enough. Everyone could always be better, more efficient, etc. My point would just be that Henrico seems to be better than most others. So criticize it if you must, but realize that you’d need to be even more critical of everyone else. At some point, you also need to be realistic about how much “better” things can be.

    You want to re-invent K-12 education? With what money? HCPS spends 90% of its budget on salaries and benefits for its employees and anotehr 5% or so on fixed costs like electricity. So can you reinvent an educational system with 50,000 students with 5% of your total budget? I’d be curious to hear how.

    I think what I hear the county saying is that in order to do more for its school system, it simply needs some additional resources. If you cut back the budget now, you’re either laying off teachers and making it a less attractive place for the best and brightest teachers to work or you’re increasing class sizes and cutting budgets for things like teacher development – which incidentally have historically been a big reason why Henrico attracts excellent teachers.

    If you have a plan for reinventing the system while keeping the best employees, low class sizes, renovating old buildings and building new ones while spending less money, I’d love to hear it and I bet the county would, too.

  5. I’m thinking EVEN if Henrico offered to reduce the property tax by the amount the meals tax would increase revenues – that Jim would still be opposed because it’s a “new” type of tax that makes transparency and accountability a big more difficult since most counties tend to not tie spending to specific revenues but basically collect taxes from all sources put in big pot and then build budget…

    I think some fiscal conservatives would be happier if the sources and percentage of sources were identified OR if the county, like the state – would fund on a per student basis, etc… something more akin to how water and sewer are done where there is a bounded fund with identified sources – a separation between capital facilities and operation and maintenance costs, etc.

    Up in Stafford and Spotsylvania – both counties have attempted to fund schools by categories (which the law allows them to do). I think there are five….

    I’d like to know, for instance, how much is spent on elementary, middle and high school and similar.

    In other words there is a feeling that there is not enough transparency and accountability to monitor spending… so the trust is lacking.

  6. Justine Avatar

    There’s the feeling that there is not enough transparency? I suppose there’s not, if you close your eyes and only see what you want to see.

    The school and general government budgets are available for anyone to look at online or in person at county offices. Here’s the school system budget:

    Check it out and you can see exactly how much was spent last year, how much is budgeted this year and what the difference is. You’ll see, for example, that they cut $1.5 million from staff development (which I referenced above). That really limits the appeal of teaching in the county for a number of teachers who otherwise would have gone to Henrico.

    No, the school system isn’t going to knock on everyone’s door and hand them a copy of the budget, so if that’s what you expect from “transparency” I suppose you’ll be disappointed.

    But at the same time, let’s suppose at each of these 80-something meetings the county is having about the meals tax it went line by line through its planned expenditures and discussed what it can’t do now and what it could do with the meals tax money. Then people like James Bacon would argue (as he has here) that the county was “promoting” the meals tax illegally. To me, you can’t have it both ways.

  7. There’s lot of data but not true transparency especially with regard to what increases are for.

    there is absolutely no guarantee as to what gains will be achieved from increases – whether they are going to pay for more at-risk K-3 specialists or more soccer coaches.

    Schools always want more money and they want no metrics on what is actually provided that is better than now.

    We want/need – cost-effective schools. We want to see the schools produce more and better qualified graduates for LESS money or at least money comparable to our European and Asian counterparts.

    we cannot have a system where more and and more money is wanted and there is little or no accountability for the value added.

    this lack of accountability engenders opposition to increases in taxes and funding.

    I do not agree with Jim Bacon on a lot of issues but on this issue – our schools spend money hand over fist – and it has little or no connection to performance… or metrics…

    the budget documents are classic rope-a-dope devices that evade and avoid real transparency and accountability.

    they talk about the expense of teaching the at-risk demographics – for instance, but where in the budget is the money devoted to that purpose?

    How much money is spent for K-3 reading vs 9-12 sports?

    how many SOL teachers are there and how much are they paid as a percentage of the entire budget?

    how much of local-provided money goes for things that are not SOQ/SOL?

    1. DJRippert Avatar

      “there is absolutely no guarantee as to what gains will be achieved from increases – whether they are going to pay for more at-risk K-3 specialists or more soccer coaches.”

      You got it! Always a need for more money. Never a commitment to better results.

  8. forget the commitment – just a simple true accounting of the money relative to performance.

    The “temerity and arrogance” of citizens actually wanting a PROPER accounting!

    it’s this kind of thing – IMHO – that is driving the anti-tax, starve the beast movement and they are gaining support.

    and the Henrico meals tax issue – is an example of it.

    there is no “bright line” – ” we have serious money issues trying to achieve this in the schools”.


    It’s a standard, generic, ” we need more money to teach the poor kids”.

    People want MORE transparency and accountability.

    they want the increases – justified and they want something that is going to measure what the money is being spent on.

    I get labeled as a “libtard” here all the time and my views about the need for school and education is pretty clear –

    but listen to what I’m saying here – it’s direct and to the point – people are losing faith in how govt spends money and they are less and less willing to see tax increases – especially at the local level – for “generic” reasons – even for well run counties.

    Adding a meals tax to the existing array of taxes would not be near as problematical if the money was promised to go to a particular thing for which both money and performance accounting would be provided downstream.

    We are already hiring more teaches than we can afford – because we are not accounting properly for their full benefits – to include their pensions.

    what is the solution to that? more money ? How would we know the money would actually go for pensions – and WHY would we spend that money on pensions without at least some balancing on current employment levels?

    we’re killing our schools – from both sides.

    the “we pay too much tax and are not going to pay more” are attacking from the right and the ” it’s our money, give us more and shut up” from the left.

    time to fix this.

  9. Justine Avatar

    Back to my original response – there are a certain number of people who simply do not trust any government at any time in any situation and will ALWAYS find a reason to be critical. That’s fine. I accept that this site attracts them, and so be it.

    But I think a reasonable argument can be that we should elect the best people and trust them to appoint the best people, then judge the results for ourselves and decide whether they succeeded or failed. Do you think Bill Gates was himself involved in every single aspect of Microsoft as it grew – from coming up with every idea to checking on every single employee, to paying every bill and sending every invoice, to washing the floors and picking up trash? Or do you think he selected the best and brightest to lead his various departments, then trusted them to hire their employees and so on?

    Do the best sports organizations have owners who fancy themselves managers and general managers, and who stick their noses into every decision that’s made, overruling coaches on player decisions or sending in special plays to be run?

    The answer is: Of course not.

    What you are suggesting is not quite that extreme, but not too far off, either. If you need to know right this second that of the $18 million raised by the meals tax, exactly $1,264 is going to pay for more ballpoint pens for elementary schools whose name starts with H, then more power to you.

    I am of the opinion that you allow people to do their jobs, then judge them on the outcome. If you have children in HCPS, then you are somewhat able to do this already. If you don’t, there are any number of standards by which learning and educational performance can be, and are, measured. Check them out. If they don’t show you the results that you deem appropriate, then complain, offer better solutions, vote out your School Board member or vote against the meals tax.

    But if they DO meet your standards or demonstrate a system that largely is well-run and is effectively educating 50,000 students, then I would encourage you to trust those in charge to know what they are doing.

    Frankly, I don’t have enough time in my day to micro-analyze every single decision made in the school system. If you do, feel free to report back on your findings. There are certainly problems that need to be addressed, but I don’t believe these are all governmental or school system problems. Schools in the East End underperform in large part because more students there live in poverty, come from single-parent homes or do not receive adequate mentorship in stable environments when compared to those kids in the West End.

    I don’t expect government to subsidize those students, but I also don’t mind providing additional resources that might help close some gaps. I don’t think the School Board is going to take this $18M and throw it all on red in Vegas.

  10. I’m a supporter of education and I strongly dislike the anti-govt types and I’m concerned not about the “certain number” but what feels like a growing number and a generalized anti-public-school mentality.

    But I also believe that schools should always be fully and completely accountable for the dollars and are not – as much as the should be and I’m from the “trust but verify” school for ALL public spending. I just feel it’s bad practice to turn over money to “people you trust” when the personnel do change and money not well accounted for sometimes gets spent on things that the people paying might not agree – but especially those who say we do not pay more that the schools have to live within their means.

    and that point, in my humble opinion, when I myself – a strong school supporter, cannot find simple information, I start to get a sense of frustration and a sense of why anti-tax, anti-govt, and anti-school folks seem to be, if not larger in numbers, certainly larger in voice.

    folks are losing trust in our institutions.

    as to the “subsidy , I personally think it’s the explicit duty of schools to educate all kids to 21 century academic standards including these kids as a priority over other things that are discretionary and not core-academic.

    I do not mind extra money devoted to that purpose but I do want to see an accounting for it – to convince me that it’s not being used for other purposes – AND it’s actually making a difference. I want to see the gap improve AND I want to know if more resources are needed when we are succeeding but need more. I want assurances that we’re not getting money for one reason and spending it on another – things that are not core-academic – when we still are not achieving the level of core academic performance we need to and 1/2 basic proficiency (according to NAEP) in a 21st century job world means we need to do more.

    We all want accountability even in our non-school, non-govt transactions. When you and I pay to repair a furnace or auto or buy something with certain extra features, etc… we are looking for that same thing “what did I get for my money”….

    What’s going on with pubic schools nowdays – that I absolutely hate – is that public sentiment seems to be building to take public education money and spend it on alternative competitive schools – that do not seem to have the same standards nor the same transparency and accountability.

    that concerns me – if these other school continue to expand and they have no more real accountability for spending than we do now – I think we end up in even worse conditions.

    I want the public schools to succeed but I want them more accountable also because I feel it weakens them in the current political environment if they are not scrupulous in their accountability.

    I do not feel that I’m advocating an unreasonable standard. we ought to be able to know simple things like how much we spend on elementary, middle and high. How much we spend on SOL instruction vs non-SOL instruction. What local funding pays for and how much – that is not SOL funding.

    Basically – the accounting that is provided for the Federal Title spending is about what I think is reasonable so I’m not asking for more than that.

    Sorry to be so wordy …. but hope that I did lay out more about the why.

    I just think schools are one of the most important things we do and I take it seriously.

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