January 25, 2007

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Call today in opposition to state and local spending, revenue limitations

Constitutional amendment to be heard Friday, Jan. 26, at 9 a.m. in House Privileges & Elections Committee

HJR 684 (Frederick) places stringent limitations on state and local government taxing and spending. A House Privileges & Elections subcommittee recommended that the amendment, sponsored by Del. Jeff Frederick (Prince William), be reported at a Jan. 24 subcommittee meeting. The amendment will be heard by the full House Privileges & Elections Committee at 9 a.m. Friday, Jan. 26.

HJR 684 amends the constitution as follows:

* Limits increases in state government expenditures to the prior year’s expenditures adjusted by inflation and population growth.

* Limits local spending by local “districts” to the prior year’s expenditures adjusted by inflation and changes in real estate valuation (for local governments that do not operate schools) or by inflation and changes in student population (for local governments that operate schools). District is defined as the “state or any local government, excluding enterprises.”

* Limits increases in property tax revenue adjusted by inflation and annual growth (growth due to construction less demolitions).

* Requires state and local governments to return surpluses to taxpayers.

* Requires voter approval in a referendum for any tax increase, valuation for assessment ratio increase, or tax policy change (either state or local) that results in a net revenue gain.

Here are some talking points:

* Revenue and spending limits results in a reduction in the quality of life and economic performance. Forbes magazine ranks Virginia as the best state in which to do business, citing its smart labor force, low cost of doing business, good regulatory climate and great quality of life. Producing the smart labor force and the great quality of life requires expenditures on the part of state and local governments, but produces gains in terms of economic development.

* The state and local governments face major, pressing problems in transportation, water quality, the clean up of the Chesapeake Bay, and education. Revenue and spending limits will mean that the state will not be able to address these issues.

* Elected officials at the state and local level have the responsibility for balancing service demands and the need to maintain low taxes.

* Voters already have the most effective “referendum” of all – the chance to vote out state and local officials if they are displeased with their management of the locality or state.

* Virginia is a low tax state, ranking 45th in terms of state and local taxes as a percent of personal income.

* Inflation and population are not accurate measures for government because requirements for particular services grow faster than these “norms.” Examples include service increases required for the elderly, school age children and the disabled. State and local government service demands also are affected by federal mandates, resulting from initiatives ranging from the No Child Left Behind legislation, homeland security, Help America Vote, Americans with Disabilities Act, clean water and air requirements, and so forth.

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