Our team of analysts has examined the proposed FY 2009 budget documents for both the general county budget and the LCPS budget. This guide will present you with informative statistics and facts that many county bureaucrats would rather not advertise!

Loudoun County is once again proposing a large increase in the budget. Total appropriations would rise from $1,385 million adopted in FY 2008 to $1,632 million in FY 2009 or a 17.8% increase! In order to finance more out-of-control spending, the county administrator is proposing a real property tax rate of $1.216 for 2008. That’s an outrageous 25.6 cents increase from last year and would make Loudoun homeowners the most heavily taxed in northern Virginia by far. County bureaucrats want to continue spending beyond our means, despite the dire economic conditions created by the housing crisis.

The proposed tax rate means the average county tax bill will go up by 13.6%, or $640 for a $447,000 assessment. This is on top of many years of double-digit percentage increases. The average homeowner tax bill rose from $1,985 in 2000 to $4,774 (See graph) in 2007 thanks to inflated assessments during the housing boom. When assessments dropped by a countywide average of 10% this year, we all thought taxes would naturally drop. Wrong!

In comparison, Fairfax County has proposed to keep its 89 cent rate for 2008 and give homeowners an average tax cut of $163. It’s hard to believe both Loudoun and Fairfax had an 89 cent rate in 2006. What happened? Fairfax has had the discipline to cut back on spending.

General operating appropriations would rise by approximately $146 million, assuming full funding for the school board request. Here are the major increases:

Loudoun County was once the fastest growing county in the nation, but that explosive growth rate has slowed substantially in recent years. New residential building permits peaked in 2003 at 6,657. That number has declined every year since then to only 2,983 permits issued in 2007. The county estimates population growth will only be about 3.5% for 2008.

Our rising tax bills have long been blamed on residential growth. So now that growth has slowed, why do our tax bills continue to rise? Taxpayers should expect the budget to increase by a factor of growth + inflation. In reality, the general county operating budget has been increasing this decade by an average factor of population growth + 6.6%, while the LCPS operating budget has increased by growth + 7.4%! Inflation has averaged only 2.7% this decade.

There is a cost associated with growth and it is mainly reflected in debt service for capital improvements like new school construction. But along with growth comes an expanded tax base, so individual tax burdens should not increase much. There has been over $9 billion in new construction and growth added to the real property tax base in just the past 3 years.

We all want quality schools for our children. We also want an efficient system that spends our money wisely, directly benefiting the children. Unfortunately, Loudoun County Public Schools is not a model of efficiency. The operating budget has ballooned from just $209 million in FY 2000 to a proposed $804 million for FY 2009.

Per-pupil cost is out of control, increasing at close to 3 times the rate of inflation since FY 2000. The following graph depicts historical per-pupil spending, including the proposed FY 2009 rate:

LCPS already spends more per-pupil than any adjoining county and would remain so under the FY 2009 proposed budget. You may have recently received a pamphlet from LCPS summarizing the proposed FY 2009 budget. In the "Expenditures Per Pupil" table they list costs for Arlington and Alexandria, while conveniently ignoring some of our adjoining jurisdictions. The cost of education rises the closer a jurisdiction is to Washington DC. Comparing what Loudoun spends to what Arlington and Alexandria spend is irrelevant. Fairfax County has arguably one of the best school systems in the country, yet Loudoun spends more than Fairfax County does in total education costs – operating budget and debt service for new school construction. According to a ranking published by US News and World Report, Fairfax had the number one ranked high school in the country and 2 others in the top-100. Evidence would suggest there is not a strong correlation between spending and student achievement. It takes more than money to create a great school system. The following graph depicts FY 2008 per-pupil spending for adjoining school jurisdictions:  

The Washington Area Boards of Education (WABE) reports - www.fcps.edu/fs/budget/wabe/ - indicate higher staffing levels at all positions (administrators, custodians, teachers, etc.), salary scale increases nearly double the rate of inflation, and soaring benefits costs passed on to the taxpayers are to blame. Almost 90% of the operating budget goes towards salaries and benefits. Benefits costs now equate to 41% of an employee’s salary and would cost taxpayers almost $200 million in FY 2009! There is now 1 full-time equivalent school employee (including administration staff) for every 6.6 students, yet classroom sizes average more than 22 students. This is a direct result of the intense administrative positions that have been created over the past eight years. The FY 2009 budget calls for 571 new full-time positions for a projected enrollment increase of 3,270 students. Superintendent Ed Hatrick’s compensation package is now up to a whopping $341,531.

Just one example of wasteful spending in the LCPS budget is the employer contribution to the Virginia Retirement System. It was a reasonable 9.4% of an employee’s salary in FY 2004, but steadily rose to a ridiculous 16.4% in FY 2008 because of a projected pension-funding shortfall. That is a $30 million annual cost passed on directly to the taxpayers! You probably didn’t know you were paying for pension fund mismanagement! Under VRS guidelines, employees are required to contribute 5% of their salary to VRS. However, LCPS generously pays their share. LCPS is only required to contribute 11.4%. When the contribution rose to unreasonable levels, the employees should have started paying their share to offset the cost to the taxpayers. Why should the taxpayers pay all 16.4%?

We highly recommend reading the WABE reports in depth for a better understanding of how your tax dollars are spent and how Loudoun County stacks up against other DC area school systems.

Employee compensation increases have been a large part of annual budget increases. The teachers union (the NEA and its affiliates - VEA and LEA) always claims school employee salaries are too low, but rarely mention the outstanding benefits package when comparing salaries to other professions. School employees have received very generous annual raises ranging from 5% to 9% throughout this decade. Have you received raises like that? Benefits costs have risen at an even higher rate. Here are the facts on compensation:

    ·     The administrative salary scale starts at $68,402

    ·     Maximum administrative scale salary is $144,994 

    ·     The teacher salary scale starts at $43,065

    ·     Maximum teacher scale salary is $94,309

    ·     Average teacher salary is $61,248

    ·     Average teacher benefits package costs $26,436 - bringing average compensation to $87,684.

Benefits are second to none. They include a defined benefit pension (Who gets that anymore?), as well as social security, and excellent health insurance. Teacher contract length is 197 days. The contract calls for 3 days personal leave and 10 days sick leave. Add it all up and total leave is 15 weeks, not including snow days. Most other professional employees only get 2 to 3 weeks of total leave a year. Teachers also enjoy excellent job security. They are not subjected to corporate downsizing like most us and nobody has yet figured out how to outsource their services overseas.

Make your voice heard. Contact your supervisors at BOS@Loudoun.Gov or call the comment line at 703-777-0115. Include your name and address. Be specific about the rate you think is fair. The rate has never been higher than $1.11, according to county records going back to 1994. The equalization rate would be $1.07. Show up or speak at Board of Supervisors’ Meetings.

The FY 2009 budget debate is shaping up as a battle between county bureaucrats who want homeowners to just ignore the tax rate so they can keep on spending as they please and homeowners who are demanding fair and affordable taxes. The completely unfair $1.216 tax rate can be lowered significantly (at least 12 cents), but it is going to take a lot of taxpayers speaking out. If you don’t do it, who will?

Loudoun County budget documents: www.loudoun.gov

WABE Guide: - www.fcps.edu/fs/budget/wabe/

Loudoun County Public Schools FY 2009 budget documents: www.loudoun.k12.va.us/

Fauquier County Public Schools FY 2008 budget: www.fcps1.org/

Clarke County Public Schools FY 2008 budget: www.clarke.k12.va.us/