In the face of a billion-dollar state budget surplus and a sterling economy, top elected officials in 29 Virginia jurisdictions have called on Gov. James S. Gilmore III and the General Assembly to share the wealth with their stretched local governments.
The mayors and board chairmen, who collectively represent two-thirds of the state's population, sent a letter and position paper Thursday to the state officials criticizing the current revenue formula and asking for change by the 2001 legislative session, if not sooner.
"The bottom line is our revenues are not increasing at a very fast rate at all," said Arlington County Board Chairman Paul Ferguson (D). Raising taxes is an option, he said, but no one's first choice.
"We're not for raising anybody's taxes," he said. "We think there's enough for everybody now."
The 29 signatories--including officials from all Northern Virginia jurisdictions except Manassas Park and Fauquier County--wrote that three broad options exist: Give localities the power to raise taxes beyond real estate, share the state's surplus generously, or pick up a current expense, such as school construction, which is critical in many rapidly growing suburbs.
Local governments in Virginia have three sources of revenue: a portion of the 4.5 percent sales tax, real estate property tax and the "car tax," which is diminishing as promised by Gilmore (R). The only tax under local control is real estate.
The economic surge is producing income tax windfalls for the federal and state governments, but real estate assessments have been flat, leaving localities the choice to cut services or raise real estate taxes.
Fairfax County's pocketbook has grown just 3 percent to 4 percent since 1992, leading officials there to slash 477 positions and raise taxes two years ago. State revenue during those same years has increased from 11 percent to 16 percent, said Board Chairman Katherine K. Hanley (D). That's the same growth rate Fairfax enjoyed during the 1980s.
Prince William County had to build 13 schools in 10 years, said Board Chairman Kathleen K. Seefeldt (D), and the trade-off is a "very high tax rate."
"It isn't fair that we should continue to have such high real estate taxes when the state is siphoning off income taxes," she said. "We want them to share the wealth."
Alexandria Mayor Kerry J. Donley (D) said state mandates that require local expenditures but don't provide extra money to pay for them are part of the problem.
"The bottom line is our expenditure levels have increased, yet we're still relying on a stagnant and antiquated revenue structure," he said.
The criticism comes on the heels of demands by Northern Virginia officials for more transportation money from state officials in Richmond, who may or may not be sympathetic to local demands.
"I've never seen local government say they had enough money," said Del. V. Earl Dickinson (D-Louisa), co-chairman of the House Appropriations Committee.
Mark A. Miner, spokesman for Gilmore, said that the governor would consider the request but also said that Gilmore already "provided localities with unprecedented money concerning lottery proceeds" and law enforcement funds.
Del. Marian Van Landingham (D-Alexandria), another appropriations committee member, scoffed at the governor's local funding.
"It's not exactly generosity in terms of what we got from state income," she said. "And this is only after he took away the car tax."
The position paper signed by the mayors and board chairmen was directed in part to a newly forming Commission to Study Virginia's State and Local Tax Structure for the 21st Century. No local officials will sit on the commission, but they want a voice in the work.
Complaints from local governments during the nation's economic boom are common, said Scott Mackey, chief economist for the National Conference of State Legislatures, and some states have responded. For example, he said, Iowa's government boosted state funding of local mental health services this year, and secondary education funding by states is up more than 7 percent nationwide.