State Budget Crisis Looms

The following article was published in the Mount Vernon Gazette and Mount Vernon Voice on February 18, 2010:

Last week we had a big victory in protecting funding for Fairfax County’s Public Schools. Governor Bob McDonnell announced his opposition to former Governor Kaine’s proposal to "freeze" the "rebenchmarking" or readjustment of the local composite index (LCI), part of the funding formula that determines state funding of local schools. If Kaine’s decision goes into effect, it will cost us about $61 million or $438,000 per Fairfax County school. I am working to prevent these cuts and enact Governor McDonnell’s proposal.

I have been consistently clear in opposing freezing the LCI. Hundreds of Fairfax County residents, including a particularly dedicated group of parents from the Stratford Landing area, have lobbied the Governor and state legislators to prevent these cuts. While the existing formula does not benefit Fairfax County, it does avoid biennial regional warfare and provides some measure of predictability. Governor McDonnell’s decision was the right decision for Virginia and I applaud him.

However, preliminary reports are that budget negotiators are discussing a $700 million cut from elementary-secondary education. These cuts could generate opposition from other localities that are more dependent on the state’s money (really mostly Northern Virginia’s money) and these jurisdictions will start to face the same kind of pain Fairfax County has been discussing recently. Do not be surprised if the rebenchmarking issue gets put back on the table.

The Fairfax County schools’ budget hole is still massive — over $100 million — with more state budget cuts about to hit. Nearly 60 percent of the Mount Vernon families who responded to my survey said that their number one priority is protecting elementary-secondary education funding. I will fight any effort to reduce our public school funds and continue to look for ways to fund our schools and do so without relying so heavily on residential real estate taxes.

This week, we start work on the Senate’s bills and the state budget. This budget is the worst we have seen since the Great Depression and the 44th District has some of the highest concentrations of people most likely to be affected. I expect proposals like massive "cuts" in Medicaid, the federal-state program providing health care to disabled and low-income people, and even more proposals to cut college funding.

These changes are not "cuts" but are simply shifts of government responsibilities to Mount Vernon’s middle-class families in the form of higher tuition, higher insurance costs and a raft of fees for students’ tests, sports and activities. I will fight as hard as I can against these efforts to dismantle what have traditionally been community responsibilities.

Finally, please visit my blog, The Dixie Pig, at scottsurovell.blogspot.com for three to four more articles per week and many of my floor speeches. You can also comment on legislation, set up a meeting or request a Capitol tour at http://www.scottsurovell.org/. Good government requires your input so please communicate with me so I can best represent your concerns in the General Assembly. It is an honor to serve as your state delegate.

More School Cuts Are Coming

Governor McDonnell recently announced that he would support the rebenchmarking of the Local Composite Index. This will restore about $61 million of Fairfax County education funding. This still has to be agreed to by the House and Senate.



However, the Governor has also refused to support any revenue adjustments so there are another $2 billion in cuts that need to happen. People have started to ask me what that means for Fairfax County. The budget is a fluid document and these things are hard to calculate. Additionally, when you are in the minority party in a Chamber, it is hard to get good information.



Here's an idea of how you can start to get at the numbers. Governor Kaine's Budget says the State and Fairfax County are budgeted for the following Direct Aid to Public Education:

Year	Commonwealth	Fairfax County
2011	$5,906,146,765	$451,067,422
2012	$5,777,515,603	$504,898,114

The Washington Post is reporting that the McDonnell Administration is discussing a $700,000,000 cut to K-12 Education. If this cut were only to Direct Aid to Public Education, this would equate to about 6% cut ($700M/$11.6B). A 6% cut to Fairfax County's funds would be $26 million per year, $150 per Fairfax County student per year. My guess is that we are heading for at least $20 million or losing about a third of what Governor McDonnell just proposed to restore in by changing the LCI rebenchmarking decision.



On the other hand, these cuts will be much more significant to other jurisdictions that are more dependent upon state funding for their local education. When these cuts hit, the rest of the state is going to be looking at cuts similar to what Fairfax County has been talking about for the last three months.



We will see the final numbers in about one week. These budget cuts are significant, unprecedented, and very serious business.

The Right Decision for Virginia

Today, Governor McDonnell announced that he intended to support a budget amendment reversing Governor Kaine's proposal to freeze the Local Composite Index ("LCI"). This decision had the effect of denying Fairfax County $61 million of new education funding and nearly $150 million for all of Northern Virginia. I previously blogged about this in the following articles:

Fighting for Education Funding

"Fairfax's Own" Proposes to Short NOVA's Schools $144 Million

LCI Games: Where's the Washington Post?

Richmond's Attack on the Middle Class

Governor McDonnell should be commended. While the LCI disadvantages Northern Virginia, it is an arrangement that Virginia's jurisdictions agreed upon after negotiations, litigation, and hours of work by hundreds of people. It is at least an impartial and predictable method of determining education funding on an annual basis.

When the Former Governor proposed to use old historically inaccurate data to calculate Fairfax County's school transfer, it harkened back to the days before Baker v. Carr when Fairfax County was denied fair representation in the General Assembly and Congress due to the Assembly's refusal to apportion representation based on actual population.

Governor McDonnell's decision signals to all jurisdictions in the Commonwealth that the existing formula will not be manipulated to benefit regional preferences. I am certain that given that many Hampton Roads jurisdictions and other parts of the Commonwealth will not stand to benefit from reversing Former Governor Kaine's decision, it was a difficult decision for the Governor. I applaud Governor McDonnell for doing the right thing.

Mt. Vernon Voice Endorses Fairfax Meals Tax Option

Earlier this session, I introduced HB 830, a bill to give Fairfax County the authority to enact a meals tax without a referendum, but by a unanimous vote of the Board of Supervisors. I wrote about the bill in my article Fighting for Education Funding where I explained my rationale - that Fairfax County is over-reliant on residential real estate taxes, that restaurant meals are a luxury already taxed by most surrounding jurisdictions, and that Richmond over-restricts Fairfax County's flexibility.

This option coupled with reversing Governor Kaine's decision to "freeze" the Local Composite Index could cover $140 million of Fairfax County's $176 million school budget hole.

The bill was killed by a subcommittee of the House of Delegates Finance Committee on a 5-2 vote. However, there is other legislation supported by Senator Toddy Puller that passed the Senate on a 25-15 vote that accomplishes the same result.

This week, the Mount Vernon Voice endorsed my efforts and legislation in a lengthy editorial. I have quoted the last few paragraphs below.

None have us HAVE to eat out (although I might argue this point on a personal level). If we want to go to a restaurant, it is our choice not a necessity. And let's be honest. We have never chosen a restaurant in Fairfax over a restaurant in Alexandria becaues that city has a meals tax.

Have you?

Mount Vernon Supervisor Gerry Hyland has been trying to make this point with his fellow supervisors for some time. Now we are running out of time.

We strongly support Del. Scott Surovell's (D-44th) bill to allow the Fairfax County Board of Supervisors to unanimously approve enacting a meals tax without a referendum seeking approval of voters. Sometimes you just to take action.

THIS is the time.

Thank you to the Mount Vernon Voice for stepping up and standing with me on this issue.

Fighting for Education Funding

The following appeared in the Mount Vernon Gazette and Mount Vernon Voice on January 28, 2010.

Since travelling to Richmond, I have been focused on getting Mount Vernon and Lee residents our fair share of resources from the state. Last week, I discussed my transportation initiatives including a U.S. 1 Transportation District and modernizing the Commonwealth Transportation Board by using current population instead of Virginia’s 1932 population.

Most people and businesses move here for our quality schools. Fairfax County delivers education with some of the lowest administrative costs in the Washington D.C. area. School officials are predicting a $176,000,000 shortfall resulting in a series of historically unprecedented service "cuts" or what are really decisions to shift public responsibilities to Mount Vernon’s families.

The State provides only 19 percent of our school budget because of Fairfax County’s relatively strong economic showing under the state’s Local Composite Index or "LCI" which weights our relative real property value, per capita income, and student population against the rest of the Commonwealth. Additionally, the LCI is "rebenchmarked" every year for changed economic conditions.

Governor Kaine proposed to delay rebenchmarking by one year to save $23 million. However, this costs Fairfax County $63 million and I oppose it. This proposal is an unprecedented breach of a long-term understanding that I wrote about two weeks ago. I have co-sponsored a budget amendment with Del. Dave Albo (R – Lorton) to restore this funding. I will fight for this as hard as I can.

I have also cosponsored legislation with Del. Vivian Watts (D – Annandale) to mandate a new formula that is fairer to Fairfax County. This also highlights Fairfax County’s unequal taxing authority compared with cities or our neighboring jurisdictions. The City of Alexandria can tax non-residents with an events admission tax, a rental tax, a hotel tax, and a meals tax – Fairfax cannot. Because the City of Alexandria has more legal options, it only relies on residential real estate taxes for 31.5 percent of its revenue while Fairfax County relies on residential real estate taxes for 47.8 percent.

Each year, Fairfax County asks the state for equal taxing authority to more evenly spread its revenue burdens and take pressure off Fairfax County homeowners. Therefore, I introduced legislation to add Fairfax County to the other five counties (including Arlington) that can adopt a meals tax by a unanimous vote of the Board of Supervisors. Restaurant meals are optional, a luxury, and are also paid by people who live outside Fairfax County – such as the one million annual visitors to Mount Vernon. This would generate $80 million per year and cover more than half the schools shortfall. A House Finance Subcommittee voted this bill down 6-2 this week, but I appreciate the support of Del. David Englin (D – Alexandria) who argued for us and gave his vote.

Next week’s column, will focus on some of my government efficiency initiatives. Good government depends on your involvement and you can contact me, comment on legislation, or request a meeting on my Web site – http://www.scottsurovell.org/ or read more of my views on my blog The Dixie Pig at ScottSurovell.Blogspot.com.

**UPDATED*** "Fairfax's Own" Proposes to Short NOVA's Schools $144M

Last month, Governor Kaine proposed to freeze rebenchmarking or adjusting of the Local Composite Index which has been done every year for decades for one year. This change in policy has the net effect of denying Fairfax County about $61 million in new education funding due to the implosion of our real estate market and exploding school population. I blogged about this two times already here and here.

Yesterday, Governor McDonnell who campaigned on the idea that he was from Mt. Vernon and understood Northern Virginia's needs confirmed that he is going to affirm this policy decision, not just for one year but at least until 2012.

McDonnell’s office confirmed Friday that he would uphold the freeze implemented by Kaine. The outgoing governor proposed freezing the index until the 2012 fiscal year. He theorized that this would protect 97 school divisions that would lose money if the formula were re-calculated. McDonnell Freezes School Funding Formula, The Virginia Gazette (Jan. 25, 2010).

This decision is a breach of the state's responsibility to Northern Virginia's children. Here are the top six affected jurisdictions according to the numbers I was given yesterday.

Fairfax County	$61 Million
Loudoun County	$34 Million
Prince William County	$22 Million
Stafford County	$4.5 Million
Fauquier County	$4.3 Million
Manassas City	$3.1 Million
TOTAL	$128 Million

The LCI measures data that is over two years old. Fairfax County educates 20% of the state's children. Today's school system has 10,000 more children than the numbers used to rebenchmark the LCI this year. Other jurisdictions in the Commonwealth are losing student population while we are gaining. This decision is discriminatory.

Using a formula avoids the annual interjuridictions turf wars that this decision is creating. Ditching or freezing the formula is horrible public policy. It guarantees an annual war between the regions of this Commonwealth.

At my Town Meeting with Senator Puller this weekend, my constituents were livid about this. Someone actually asked me to introduce legislation proposing that Northern Virginia secede from the Commonwealth because they were so mad.

The irony is that when revenue was booming, the rest of the Commonwealth took more and more revenue from Fairfax County. When our real estate markets crater more than any other jurisdiction we get punished. This is situation is beyond outrageous. Someone who understands our region and this state would not affirm such a short-sighted policy decision.

****UPDATED****
On January 27, 2010, the Governor's Office is now stating that the decision to freeze the LCI is still under consideration. It's a good sign that it's not a done deal yet.

LCI Games: Where's the Washington Post?

Earlier this month I wrote about how Governor Kaine was wrong to delay the rebenchmaking of the Commonwealth's education funding formula's in effect denying Fairfax County $60 million to help make up a $180 million shortfall.

While the Washington Post ran one article about this (on B-3) last week, the Editorial Pages have been silent. Well at least The Roanoke Times is looking out for us.

HONOR THE SCHOOL FUNDING FORMULA
Even if it means Northern Virginia will
get more money this year at the expense of rural communities.
Virginia lawmakers, especially those from less affluent parts of the commonwealth, probably thought this year would never come. The school funding formula favors Northern Virginia. Though it will mean less money for the rest of the commonwealth, the formula should stand.

The controversial formula, called the composite index, determines how much money each locality receives from Richmond for K-12 education. It is supposed to distribute funds equitably. Communities that can afford to pay more for their own schools receive less assistance than economically distressed ones.

What that typically means is that Northern Virginia communities pay a larger percentage of their educational costs than most of the rest of the state.

That has long annoyed Northern Virginians and their representatives in the General Assembly, but the formula has stood. It rightly directs resources where they are most needed.

This year, a disastrous national economy and the collapse of the housing bubble are forging new territory. The formula says Northern Virginia deserves a greater slice of the available funds than it has received in the past because plunging property values have led to less local tax revenue.

Gov. Tim Kaine, before he left office, proposed suspending the formula this year. Not only would that prevent Northern Virginia from receiving its additional percentage, but it also would save $30 million in a state budget that must guard every dollar possible if it is to balance.

While we cannot fault Kaine for seeking such savings, Gov. Bob McDonnell and the General Assembly should not make this one of them.

The formula for years has been a compact between economically diverse parts of the state. Suspending it when Northern Virginia stands to benefit would be unfair and dishonorable. If bad economic times are sufficient justification, then the formula would only ever benefit rural areas and would no longer be equitable.

That would lend credence to the calls from Northern Virginia to eliminate the formula altogether, and that would be disastrous for the rest of the state.

If the formula is honored, localities throughout Southwest Virginia would receive less money for schools than they otherwise would have. No one ever said doing the right thing is always easy.