Editorial: Fiscal Conservatism v. Arbitrary Conservatism

There’s a scene from the movie “The Princess Bride” that a lot of people can quote from memory.  In the scene, the villain Vizzini has just cut the rope that the Dread Pirate Roberts is using to scale an immense cliff:

Vizzini:  He didn’t fall?! INCONCEIVABLE!

The movie’s hero, Inigo Montoya, then delivers his now classic response:

Montoya:  You keep using that word. I do not think it means what you think it means.

We’ve got a term like “Inconceivable” being used a lot here in Clarke County, especially around budget time.

Several Clarke County Supervisors have taken to labeling themselves as “fiscal conservative” in order to explain their decisions to either spend taxpayer money or not spend it. But if Inigo Montoya were here he’d probably take one look at some of those spending decisions and deliver the same message for the Supervisors as he had for Vizzini:

“You keep using that word. I do not think it means what you think it means.”

Fiscal conservatives support limited government, limited taxation, and a balanced budget. They argue that low taxes produce more jobs and wealth for everyone, and also that, as President Grover Cleveland said, “unnecessary taxation is unjust taxation”.

Here’s a few recent examples of why “fiscal conservative” doesn’t quite describe some of the recent spending decisions that our Supervisors have taken:

Enterprise Resource Planning Software

After nearly a year-and-a-half of study and recommendations for change, Clarke County’s automation infrastructure is still in the stone-age. What is worse, four out of five Supervisors are poised to remove the County’s half of the proposed $650K funding for the recommended enterprise resource planning (ERP) system from the budget. (Interestingly, the funding-strapped School Board looked at the same recommendations and decided that something needed to be done and agreed to approve its half of the ERP purchase.)

An enterprise resource management system drives down the cost of government by automating government processes and improving government efficiency. In fact, the proposed Clarke County ERP system was said to have a pay-back period of only five years.

OK, so an ERP will reduce government cost and pay for itself in five years. That sounds a lot like a formula for reducing the need for future tax increases, as well as reducing the need for government employees. Both benefits are consistent with fiscal conservatism’s core values; lower taxes and smaller government.

So, why would a fiscal conservative vote against something like that?

Senior Center Catering Facilities

The Clarke County Supervisors just pitched in $1M of taxpayer funding for a new senior living center. Despite the open secret that many of the seniors using the present facility like the fact that its downtown and that they don’t need an automobile to get to it, why would a fiscal conservative vote to fund a new center when the senior’s needs were already being met by the private sector?

But wait, there’s more…

There are three County-owned commercial kitchens within a quarter-mile of the new Senior Center, yet the Supervisors approved an additional $72K to build a new kitchen at the new center.

One of the justifications for adding the additional kitchen money? The new senior center will now be able to generate money by catering events using its new commercial kitchen.

But wait a minute… If the senior center caters events, doesn’t that mean that one of the many existing Clarke County catering companies won’t get that same catering deal because the senior center is using use of tax dollars to compete with private enterprise? And why expand government intervention (a fiscal conservatism no-no) to build a senior center when it would have been just as effective – and cheaper – to simply provide additional  funding to the private churches that have been doing the job for years?

So, why would a fiscal conservative vote against something like that?

Riverside Park     

Under section 303(d) of the Clean Water Act, states are required to develop lists of impaired waters and calculate the Total Maximum Daily Load (TMDL) that a water body can receive and still safely meet water quality standards.  EPA has asked jurisdictions like Clarke County to make key stakeholders – local governments, conservations districts, farmers, builders and others – aware of their roles in cleaning up the region’s waterways, and to strengthen pollution-reduction strategies for the Chesapeake Bay TMDL limits issued in 2010.

TMDL pollution abatement will soon be a significant expense for Clarke County’s agricultural activities. Even so, removal of pollution sources generated by the Virginia National Golf Course would have reduced the County’s overall TMDL score and improved the water quality of the Shenandoah River in Clarke County – a potential cost saving to Clarke County agricultural concerns.

How much TMDL value would the park have generated for the County?

As the crow flies, the Shenandoah River travels 14 miles through Clarke County. That’s roughly 28 miles of shoreline.  The proposed park’s two miles of shoreline would have meant 7-percent of the river was protected from fertilizer runoff and pesticide pollution. While there isn’t enough hard data yet to accurately calculate exactly what the park would have saved in TMDL costs to area farmers, if the County’s final TMDL avoidance price tag were only $1M, the park was worth $70K annually just to farming interests alone.

So, comparing the park’s “pay-back period” of the Northern Virginia Regional Park Authority’s $65K annual membership fee to the number of hamburgers that would have to be sold to cover the cost really misses the mark.

What’s even more astounding is that between the money offered by outside groups and money already set-aside in the County easement authority and park authority, the park fee would have had no impact on County tax rates for at least three years.

One Supervisor even argued that with the recovering economy the now-defeated park would have likely not cost County-taxpayers anything in increased taxes.

So, the idea that the proposed park would have increased taxes seems questionable at best, especially in a County where open-space and agriculture interests are core-land use values.

So, why would a fiscal conservative vote against something like that?

Schools and Public Safety Funding

By many accounts, most of our teachers and cops find Clarke County to be a desirable place to live and work. Many even say that they are willing to earn a little less in exchange for being part of such a wonderful community. But some of our best teachers and police officers are also saying that they are being forced to leave their jobs here because they can’t survive on the County’s low pay structure.

Now, a fiscal conservative might argue that wages are part of the free-market system and labor goes where it can find the highest rate of return. But that argument only takes into account the wage-side of the free-market labor economy. On the investment-side, Clarke County taxpayers are being forced to continually pay the cost of training entry-level teachers and police officers to become job proficient only to then lose the job-training investment to higher paying jurisdictions like Loudoun and Frederick County after just a few years.

So, when the Sheriff’s Department or the School Board literally struggle to both manage expenses and cut their budgets so that some money can be set aside for a staff-retaining pay raise and the Supervisors, at least in the School’s case, slap on an additional last-minute “arbitrary” $150K budget cut, what impact does that act have on retaining staff and preserving the taxpayer’s investment in its police and teachers?

Why would a fiscal conservative vote for something like that?

Clarke County’s $15M Rainy Day Fund and a Proposed Tax Hike   

So why would a fiscal conservative vote against the things mentioned above?

The most often cited reason, of course, is “We’re in tough economic times and we can’t afford it.” As the final budget vote nears in April, “tough economic times” will almost surely be cited with increased frequency in support of the proposed tax hike which would generate between $322K and $429K in new taxes.

But why would a fiscal conservative vote for a tax hike when Clarke County has $15M in unused taxes currently sitting in the bank?

The $15M fund source, referred to as “pay-as-you-go” accounts, contain money being saved for future expenditures that the County Supervisors has deemed important for the future. You know, things like conservation easements ($153K), parks master plan ($100K), unspent government carryover from government savings ($373K), and energy efficiency ($200K).

Things like that.

But wait a minute, setting aside funds now for future spending sounds a lot like “saving for the future”, doesn’t it? Surely, saving for future spending rather than financing government programs with deficit spending is consistent with fiscal conservatism, right?

The answer is “yes,” but not when “saving” begins to morph into “hoarding” at a time when the same “fiscal conservatives” are arguing that County taxpayers can’t afford to take on any additional expenses (like pay raises for teachers, and cops, a new County park, ERP software, etc.)

You know, those kinds of things.

When does “saving for the future” turn into “unnecessarily hoarding” of taxpayer dollars? Well, there may not be a black and white answer, but consider this;

Clarke County’s 2011 Financial Trend Analysis report compares spending and demographic information between Clarke and the similar Virginia counties of Amelia, King George, King William, Madison, Rappahannock, and Greene. In 2011, the average of General Fund Balance over Total Revenue for the six-county reference group was 53.4%. Clarke County’s General Fund Balance over Total Revenue for the same year was 113% of the six-county average.

In other words, Clarke County’s “rainy day reserve” was thirteen percent above the average of the other comparative counties in the survey yet the Supervisors are proposing to raise taxes.

What’s up with that?! and why would a fiscal conservative vote for something like that?

“Fiscally Conservative” or “Arbitrarily Conservative”?   

It’s fine if our Board of Supervisors wants to label itself “fiscally conservative”, but as the saying goes, “if you are going to talk the talk then you have to walk the walk.” However, there is a growing dissatisfaction with many County because there doesn’t appear to be a logical fiscal strategy in place that is likely to solve the problems facing the County even though it appears that there is plenty of money in the County’s coffers to accomplish just about anything we need done.

Fiscal conservatives understand that in order to achieve the goals of limited government, limited taxation, and a balanced budget you must have a balanced strategy that includes more than simply saying “No” to anything that involves spending.

Saying “No” to the ERP  means that the County now effectively has no information technology plan.

Saying “No” to the river park calls into question support of the County’s comprehensive plan and the advice provided by its own appointed open space leaders.

Saying “No” to Civil War battlefield park that would have been part of a national battlefield network further enforces the public perception that Clarke County is “closed to new business” of any kind.

With no “pay-as-you-go” savings account in place for funding a future employee salary raise the County demonstrates that it has no meaningful long-term plan for retaining experienced staff.

Arbitrarily slashing $150K from the School Budget demonstrates a lack of support for County departments that do have a plan for retaining the taxpayer’s investment in fully trained employees.

President Grover Cleveland statement rings as true for fiscal conservatives today just as it did in 1887; “unnecessary taxation is unjust taxation” (Grover Cleveland, “The President’s Message, 1887” online p 37).

Simply increasing taxes without plans in place to address the County’s issues is unjust and unacceptable.

But why would a fiscal conservative vote for something like that anyway?

Clarke County General Fund Balance as of March, 2012 (Click to enlarge)

 

Editor’s Note:  An earlier version of this editorial incorrectly stated that Clarke County’s General Fund Balance to Total Revenue ratio was double that of the other counties in the reference group and could support a large tax refund if the County desired. The General Fund Balance to Total Revenue ratio cited in the previous version was incorrect.

Comments

  1. Kenny Gall says:

    Wow… Great article! Well said…

  2. jennifer says:

    Bravo Ed Leonard!

  3. Bocephis says:

    Some good points, but if you believe the Cool Spring park membership stops at 65k annually, you are sadly mistaken. Part of being a fiscal conservative, or even just a smart person in general, is being able to take ALL facts into consideration. My count is that the annual membership would easily cost us $90k annually. I guess understanding all facts is why I don’t live in the cess pool of NOVA. Taxes and big government are another reason we do not want to be associated with the NORTHERN VIRGINIA Park Authority.

  4. Can anyone show a report by DEQ or EPA that shows that Virginia National Golf Course was a pollution source for the river. Were test done before the golf course and at WV line that shows there were more pollutants after passing the golf course if not there is no valid proof.

  5. ERP software implementations are notorious fo rrunning way over budget and in many cases being total failures. Public projects are worse than the average. (google ERP implementation to see examples). Masive cost overrruns and non-working computer systems. Even the optimistic payback numbers were suspect. Avoiding wasting money down that drain was a good move.

    The park proposal would have traded tax revenue and jobs generated by the golf course for a tax bill and an unstaffed park that would be more of a burden than a benefit. As for pollution, a golf course is not a polluter of the river. There’s be likely more pollution from the park as “visitors” dump trash in the river (like the guys I saw who were changing the motor oil in their car by the river under Rt7 last summer – I wonder where that used oil went…). Another good vote – yes to jobs and tax revenue, no to a party park problem.

    • Tony Parrott says:

      Couldn’t disagree more.
      Yes software implementations can run over budget mostly because companies try to go cheap which always cost you more in the long run. Running a department where you must “Print” out a report then go and manually input that date into a totally different system is crazy; that is grossly inefficient. Besides Clarke Co. would not be on the cutting edge here as these types of systems have been implemented everywhere. Look to other counties and what they use and what the cost are. Let’s not reinvent the wheel here.

  6. Tony Parrott says:

    Overall great editorial Ed. Can’t say I totally agree but very good job in outlining these differences and shedding light on the $15,000,000 in tax payer money sitting around. My personal belief is both liberals and conservatives are the same when it comes to tax payer money. They both want to spend it the question is always where.

  7. This article does a nice job of breaking down some of the underlying issues surrounding recent budget discussions. However, to totally exclude an appropriate and nominal increase in taxes isn’t a fiscally responsible way to approach things.

    Do you believe that establishing funding (planning) for future endeavors is appropriate? The logical answer must be “yes” if in turn you favor spending some of the available “rainy day” resources on current needs. (Or you believe in pennies from heaven, in which case you should probably stop reading now).

    So, how far down do you spend those reserves and how quickly? Do they last 2 years, 5, 10? Now for the $64k question – how do you plan on replenishing those funds so the same luxury is available for the county and it’s residents in the future? Or are you not interested in “planning” that far ahead?

    It’s easy to take shots at the senior center for instance, but hasn’t that been planned and budgeted for years? Is your stance that any “planned” initiative be subject to a total scrapping and departmental budgets be totally interchangeable depending on the need du jour (perceived or real) a decade down the road? Or do we just stop planning entirely for the future?

    The school system, technical infrastructure, and public safety are products/services that deserve appropriate upgrades. These services have real value associated with them, and that value should not remain stagnant or mired in a 1990’s concept of worth. Think about it – how many other products or services that you utilize haven’t increased in cost over the years? Yet members of the community pay 2x the past price for things like cigarettes due to their perceived “value”, while screaming that we can’t afford to study an issue before making a big-ticket purchase like is the case with emergency communications.

    In the mid-2000’s the real estate tax rate was 20 cents per $100 of value more than it is today. The rise in assessed value required a reduction in tax rate because state law forbids localities from making a financial windfall via assessment increases. So the net result is that virtually no one is paying too much more out of pocket for County taxes than they did almost 7 years ago. So back to products/services again…. know of many things that have stayed the same price for 7 years? Exactly – so how can you argue that your price (your out of pocket for taxes) should remain the same for the products/services you buy via your residing in the County (schools, infrastructure, public safety)?

    If you’re going to pull equity from your rainy day fund you need to be responsible enough to replenish what’s spent. A reasonable increase in real estate taxes does just that – for a property w/ assessed value of $500k, a nickel increase per $100 adds up to approx. $21 per month in additional expenses. But, I can hear the cries of “hardship” now! REALLY? You own property worth 1/2 million $ and you can’t cover $21 per month (which after you’ve taken the federal tax deduction is likely closer to $12 per month).

    Save the tea party-libertarian-fiscal conservatist BS…. if you aren’t willing to invest peanuts in the 3 most key needs of this County, then there’s but one word that applies to you – SELFISH. Wear it with pride as you spend down County reserves with no plan to replace them. I’m sure we’ll all be in a much better place when you’re done, right?

  8. Harrdware says:

    Very well stated editorial, Ed. Great points. Let’s hope our elected officials are reading this.

  9. Ann St. C. Lesman says:

    I was in favor of the park and think it was shortsighted to turn it down. Is the issue absolutely dead?