Comments (9)

By Marc, February 9, 2010 7:40 pm

In case you missed it (given all of our winter weather), the Republican majority on the Stafford County Board of Supervisors repealed the Business, Professional and Occupational License (BPOL) tax on February 2, 2010. I pretty much said that this was a forgone conclusion in my last post on the subject here. I’m not going to reiterate all the points I’ve already made on the topic, so if you’re interested check out my last post.

For those that were unable to attend the public hearing, I decided to put together a little video of highlights lowlights. I actually think that the Republicans can teach a course on the art of twisting the facts. As Albert Einstein once said,

If the facts don’t fit the theory, change the facts.

A few key takeaways before you go. I certainly have some issues with BPOL in general; however, what troubles me the most is the fact that Stafford Republicans continue to misrepresent the facts to further their position on the issue.

They refuse on leveling with residents on how they plan on addressing the huge shortfalls present in the FY ’11 budget. Yeah the $26 million school shortfall and the upwards of $19 million shortfall in the county budget.

It still makes no sense to me that Republicans would use a surplus, which could have been used to lessen the impact of the tremendous shortfalls projected in the upcoming budget, to repeal an annual revenue source that some predict would equate to $140 million over the next 20-years.

For FY ’11, it was projected that BPOL would provide the county with $3.7 million of revenue. Combine the $3.7 million of BPOL revenue now lost with the $3.7 million of the surplus that must be used to cover the costs of repealing BPOL in the FY ’10 budget and the total impact to the FY ’11 budget is $7.4 million. So when the county is facing tough fiscal realities, the Republicans vote to make things even worse for the county, our schools, our roads, our law enforcement and our fire and rescue.  That $7.4 million could have meant that more teachers and deputies would be able to keep their jobs. It could have meant that some much needed road improvement projects were able to happen next year.

The Republicans have failed to have an honest debate with the public on the impact of the decisions that they are making. The reality is that Republicans will have one of two choices now: (1) Drastically reduce core services or (2) raise taxes on existing homeowners. They failed to level with residents during the BPOL debate and chose to avoid laying out the impact of their decisions.

Stafford County is the second fasting growing County in Virginia and, as such, has an ever-increasing need in maintaining and improving core services. As I stated previously, 53% of Stafford Schools do not currently meet Annual Yearly Progress requirements. Will businesses really choose to relocate to a school system that is failing? I think not.

Listen, I have no problem with repealing the BPOL tax as long as the Republicans showed how they planned on replacing this revenue source. BPOL is not a perfect tax, but it is one of the only tools that localities have on raising revenue locally that is not on the back of homeowners or consumers. If businesses have problems with the structure of BPOL, they need to work with their delegates and state senators to fully address them in the General Assembly. I do think that small businesses have some really good points on BPOL. What we need is an equitable tax structure for homeowners, consumers and businesses.

In the end, I’m most upset by the fact that the Republicans used a recently found surplus (due to an administrative error) to repeal BPOL. This is the same surplus that they cried about holding onto back in December when Democrats proposed spending it. I was equally critical of spending this surplus when Democrats tried to do it too.

This political posturing must end and the residents of Stafford County deserve to be put first again!

Comments (4)

By Marc, February 1, 2010 5:31 pm

Unless you have been living under a political rock, everyone should be no doubt aware of a pubic hearing scheduled for tomorrow to reinstitute the merchants’ capital tax and nix the BPOL tax. Republicans made BPOL a key issue during the last campaign and pledged to kill it. They ended up winning a majority on the Stafford County Board of Supervisors (5-2) and are poised to follow through on their pledge tomorrow (this is actually a forgone conclusion).

How do Republicans plan on paying to repeal BPOL (since the money was already included in the FY ’10 budget)? As I predicted back in December (here and here), they plan on using the remaining $4.8 million surplus. That’s right, the $4.8 million (It was actually $6.2 million, but some of the money was already spent) that was discovered late last year because of an accounting error between the school board and the county two years ago. When Democrats proposed spending the surplus in December, Republican outrage boiled over. Supervisor Cord Sterling (R-Rock Hill) had the following to say when Democrats proposed spending the surplus,

We have a bleak financial outlook…It’s not a responsible way to govern. We need to put governance ahead of politics. Let’s wait and figure this out during the normal budget process.

And Supervisor Paul Milde (R-Aquia) added,

This amounts to a $6.2 million raid of Stafford’s accounts…I see Democrats trying to give away $6.2 million.

I would ask Sterling and Milde what has changed since December? Could it be that they are now in the majority and want to use the funds for other purposes? To Sterling, how is it good governance to repeal BPOL and cover the revenue loss with the surplus? I guess the financial outlook isn’t as bleak as it was in December or the outrage a month ago was more about wanting to save the money so that it could be used to repeal BPOL. It sounds to me that politics is being put ahead of good governance.

To Milde, I guess the Republicans are now trying to give away the remaining surplus. The only difference is that Democrats were giving the money to teachers and deputies, plus funding a required trust setup for post-employment benefits of school and county employees; and Republicans are choosing to give money to local businesses by repealing BPOL. This is not to say that one group deserves the money over another, but these are just simple facts.

Like I said back in December, both Republicans and Democrats wanted to spend the money in different ways. That is what made the Republican outrage so disingenuous. I was against spending the surplus until the budget picture became clearer. It is now clear that things are continuing to deteriorate and the FY ’11 budget already contains a $6.9 million revenue shortfall. Given declining state revenues, the picture will surely get worse. Repealing BPOL will only compound and exacerbate the already precarious budget situation.

It is no secret that I have been highly critical of the way in which BPOL was passed in the first place and have some serious issues with the structure of it. The reality is that localities are limited in the number of tools at their disposal to generate revenue. Unfortunately for homeowners, when additional revenue is needed that usually equates to higher property taxes. What we need is an equitable tax structure for homeowners and businesses. That doesn’t mean that businesses should be punished, but we need to understand that everyone has a stake in our communities and work towards some compromise.

Del. Mark Cole (R-Spotsylvania) recently introduced a bill to prevent any localities that have not enacted BPOL by January 1, 2010 from doing so in the future.  This doesn’t seem like much of a compromise to me, but politics at its’ worst. It is important to note that BPOL is a tool provided by the state to the localities and any changes to it must be introduced and passed in the state legislature.

Whether you are for or against BPOL is beside the point right now. The reality is that a bi-partisan group of supervisors, including Sterling and Dudenhefer (R-Garrisonville) approved the FY ’10 budget, which clearly included BPOL as a revenue stream. It seems fiscally irresponsible to me to remove a revenue stream by spending the surplus (double whammy there), which could instead go towards reducing the looming budget deficit. We need to do everything in our power to protect our core services (e.g. education, police, fire and rescue). The reality is that we are in for either severe cuts to these services (many of which are already cut to the bone) or a massive increase in homeowner’s property taxes to sustain them. So what are Republicans proposing going forward? I’m waiting…

I, for one, am deeply concerned about our schools. Did you know that approximately 53% of Stafford’s schools did not meet Adequate Yearly Progress (AYP) last year? No Child Left Behind stipulates that any school system that receives federal funds must meet 100% AYP by 2014; and that schools that don’t make AYP for two or more consecutive years in the same content area be sanctioned, which would ultimately affect federal funding. If Stafford is hoping to attract businesses to the area, I assure you that a failing school system will not convince them.  The remaining $4.8 million surplus could easily mean that more teachers keep their jobs (ensuring reasonable class sizes) and we can make the necessary investments in our schools for fiscal year ’11 and beyond.

The Republicans have tried to make the argument that BPOL will hurt businesses and cause them to leave Stafford County in this economic climate. If that is the case then why isn’t Spotsylvania or the City of Fredericksburg considering a repeal of BPOL? Again this isn’t an argument for or against BPOL, it is simply a fact. Yes, a fact that current Supervisor Gary Snellings (R-Hartwood) agreed with in 2004.

Snellings said the following about BPOL back in 2004,

My argument has always been that if you have BPOL, you will run businesses out of the county…But I don’t see businesses jumping across the Rappahannock River because Stafford doesn’t have BPOL.

Snellings went on to say back in 2004,

I have never been in favor of BPOL…Until now. I don’t see any other way we can relieve some of the burden on homeowners other than putting it on BPOL. Nobody likes taxes, but the reality is, this is not as big a burden as we are being led to believe.

So in summary, Snellings didn’t see businesses coming to Stafford because of not having BPOL, believed BPOL provided a means to relieve the tax burden on homeowners and it wasn’t as big of a burden as everyone was being led to believe. Now he and his Republican colleagues have changed their mind on BPOL? Since I don’t believe there have been any substantive changes to BPOL since 2004, why the sudden change in opinion? Again, this is politics at its’ worst.

Going forward, we can only hope that our elected officials put the needs of the many over their own. The severe budgetary problems we are facing belong to no political party. It is time for them to put Stafford County residents first. I’m tired of the hypocrisy. What we need is fiscal restraint and responsibility and not political posturing.

It is already a forgone conclusion that Republicans will use the surplus to repeal the BPOL revenue stream (which some have stated would equate to $140 million over the next 20 years). The problem with all of this is that Republicans still have failed to address the revenue stream problem moving forward and have instead tried to make repealing BPOL appealing through the use of the one-time windfall (surplus). They are essentially out selling the bearskins before they have even found the bear.

At this point, I can only hope that Republicans level with county residents on what this will mean in terms of our property taxes and core services moving forward; however, if history prevails, I won’t be holding my breath.

Comments (3)

By Marc, December 4, 2009 2:02 pm

As most are no doubt already aware, an accounting error between the school board and the county two years ago, recently confirmed by the results of audits, has led to a sudden $6.2 million surplus in county coffers.

This past Tuesday at the regular meeting of the Stafford County Board of Supervisors, the board approved a resolution authorizing the appropriation of a portion of the aforementioned surplus – approximately $1.4 million to be exact. Supervisor Joe Brito (I-Hartwood) introduced a resolution that would have provided a 1.5% continuous pay rate increase to school employees.

A heated discussion ensued between board members. The result was a substitute motion put forth by the Republicans that nixed the 1.5% continuous pay rate increase for school employees, which would have brought pay in line with Spotsylvania County. The substitute motion, instead, proposed a one-time bonus be paid to certain categories of school employees and to sheriff deputies. This substitute motion eventually carried with all Republicans on board and Supervisor Crisp (D-George Washington) voting in favor of it. Supervisors Schwartz (D-Falmouth), Woodson (D-Griffis-Widewater) and Brito (I-Hartwood) voted against the resolution.

…Listen, ALL school employees (minus the overpaid administrators) deserve a continuous pay rate increase after two years of salaries remaining essentially stagnant while health care premiums have continued to soar, which has ultimately led to a decrease in employees net pay; however, is dipping into this surplus to pay for this increase advisable…The answer to me is NO…In November, State Sen. Ed Houck (D-Spotsylvania) warned the Spotsylvania County Board of Supervisors that (from the FLS):

The state’s biennial budget has already been cut by $7 billion, he said, and to finish out the current fiscal year, Houck said it is likely the state could have to make $200 million to $300 million more in cuts to make up for falling revenues.

Looking forward to the next two-year budget period, for which Gov. Tim Kaine will announce his plan next month, Houck said the state could be looking at another $3 billion in cuts.

That will be hard to do without cutting education funding again, and Houck said that at this point his goal is “to control permanent damage to our core services.”

…It is VERY likely that based on declining state revenues that education funding from the state will be cut…Not to mention that Gov.-elect McDonnell (R-Virginia) has proposed taking a significant amount of money ($5.4 billion) out of the general fund to pay for his transportation initiatives, which would undoubtedly lead to further reductions in education funding locally…

…I believe that if common sense prevailed on the board that our schools wouldn’t be getting short changed and school employees would be rewarded…Why is no one talking about the fact that the county has a large transportation department when they have no money or responsibility for transportation or why Supervisors Dudenhefer (R-Garrisonville) and Milde (R-Aquia) are so hell bent on spending $45 million on the $25 million radio communication system the county is buying…Why is Stafford County buying a $25 million radio communications system in the first place…This happens to be one of the most expensive systems around and it appears to me that Stafford County taxpayers would have be better served by a more appropriate choice in systems…It is clear to me that we need some major changes to the way procurements are conducted in this county…

…In the end certain categories of school employees and sheriff deputies will be getting bonuses, based on the aforementioned substitute resolution passing…I think that ALL school employees (minus the overpaid administrators) are deserving of this bonus, although I completely disagree with the fiscally irresponsible means by which this is being funded…While I have a great amount of respect for the job that sheriff deputies do, was it really necessary in these fiscal times to provide a second pay increase for deputies this year when many other county employees have received nothing….How about board members put aside their difference for a change and do right by Stafford County…

Supervisor Joe Brito (I-Hartwood) then proposed enacting a new ordinance that would allow Stafford County to return real property tax revenue to taxpayers in any fiscal year with a surplus. This proposal would have provided an equal payment amount to every taxpayer in Stafford County; however, an amendment was adopted to have the payments distributed on a pro-rata basis. The adoption of a county ordinance requires that a public hearing be held. On a 5-2 vote, with Brito (I-Hartwood), Schwartz (D-Falmouth), Crisp (D-George Washington), Woodson (D-Griffis-Widewater) and Sterling (R-Rock Hill) voting in the affirmative, a public hearing was scheduled on Dec. 15 to potentially adopt this ordinance.

…Consistent with my prior comments, I do not believe the surplus (now down to $4.8 million) should be touched, at this point, with expected state cuts coming down the pike…Providing rebates to taxpayers is not a bad thing; however, given our current economic fiscal condition it is fiscally irresponsible…

…The Republican outrage is also quite disingenuous (earth to Dudenheffer and Milde)…The only reason they are outraged is that they want to spend the surplus on repealing the business tax, which is also fiscally irresponsible at this point…Any decisions on spending this surplus should wait until there is a clearer picture from the state on the size of cuts to expect…

…If the same folks that are so against the business tax stopped wasting county money on overpriced consultants and procurements, the repeal of BPOL could be paid for several times over without cutting any services or dipping into any surpluses…

…Given where revenues are headed at the state level, if the surplus is spent there is a high likelihood that property taxes will have to be raised to offset this loss of revenue or there will be severe cuts to core services…Of course this might still happen if the downturn is severe enough, but why put the county in such a position…It’s time to put aside the partisan bickering and do what is right for Stafford County…

…I hear that Dudenheffer actually threatened Crisp with political retribution, after following him to his car to scold him for his support of the rebate ordinance…This sort of behavior is over-the-line, especially from someone who is rumored to be the next Chairman of the Stafford County Board of Supervisors…The “Dude” needs to get ahold of himself and his political ambitions, if this board has any chance of functioning in the near future…