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More on bond rating

Here is word for word a press release from the county government about the bond rating:

Following presentations to the three major credit rating agencies, Spotsylvania County has received an upgrade to its bond rating from Standard & Poor’s while maintaining its high bond ratings from Fitch and Moody’s:

  • AA from Fitch – Very high credit quality; expectations of very low credit risk;
  • Aa2 from Moody’s – High credit quality; very low credit risk; and
  • AA+ from Standard & Poor’s – Differs from the highest-level obligations only in small degree; capacity to meet financial commitment on the obligation is very strong.

The agencies regarded the actions taken during FY 2008, FY 2009, and FY 2010 to mitigate falling revenues and maintain the fund balance reserve as significant strengths.   Highlights from the rating agencies’ comments follow:

Fitch

  • “Spotsylvania County’s financial position is strong, characterized by solid reserve levels and flexible budgeting practices.”
  • “Management has managed recent revenue shortfalls well, using both mid-year spending adjustments and relatively small fund balance draw-downs to maintain fiscal stability while also fulfilling commitments to capital and infrastructure investments.”
  • “Long-term prospects for local economic expansion appear favorable, as management seeks to attract small and mid-size concerns, specifically targeting healthcare, technology and defense contracting.”
  • Drivers for future ratings include:

–     “The county’s continued compliance with sound reserve policy levels, despite potential operating pressures from the weakened economy and potential further AV declines;

–     Continued recent expansion of the local economy and employment base;

–     Stabilization of the county’s housing market.”

Moody’s

  • “Spotsylvania’s financial position is expected to remain strong given sound reserve levels and timely tax rate increases.”
  • “A commitment to maintain reserves at policy determined levels as demonstrated through mid-year budgetary adjustments also contributes to the county’s overall fiscal stability.”
  • Regarding the FY 2011 budget:  “Indicative of management’s prudent practices, the budget includes several million dollars in contingencies to protect against further revenue declines.”
  • ”In 2007 the county set a goal of incrementally increasing pay-go capital to eventually appropriate between 3% and 5% of annual revenues.  While achieving this level will likely take longer than originally planned, management remains committed to the goal and has budgeted 2011 pay-go at 1.7%.”
  • “Moving forward, the county’s ability to maintain structural balance while keeping reserves above its policy thresholds will remain an important credit factor.”

Standard & Poor’s

  • “The upgrade [from AA to AA+] is based on Standard & Poor’s view of the county’s consistently strong financial performance including the maintenance of strong unreserved balances despite some declines in economically sensitive revenue streams.”
  • The rating reflects:

–     “Expanding local economy, with access to additional employment centers throughout northern Virginia and Washington, D.C.;

–     Historically below-average unemployment, which at 6.3% in 2010 remains favorable compared with state and national averages;

–     Very strong resident income and per capita retail sales;

–     Very diverse tax based, coupled with extremely strong property wealth indicators; and

–     Strong and well-embedded financial management practices, contributing to the maintenance of healthy fund balance reserves.”

  • “The stable outlook reflects our assessment of the county’s ongoing economic growth and development as well as access to the diverse economies of northern Virginia and Washington D.C.  Furthermore, the county has successfully maintained a strong financial position while addressing its various capital needs.  Despite its sizable capital improvement plan, we expect the county to maintain a manageable debt burden.”

On July 14, 2010, the County sold $17.1 million in General Obligation bonds to fund the remaining portions of the new Circuit Court and Public Safety buildings.  Based on the County’s bond ratings and the current bond market, Spotsylvania secured an “all in” interest rate of 3.16% on the bonds.

The bond rating agencies’ reports and excerpts from the information presented to the rating agencies will be posted soon on the County’s website.

Permalink: http://news.fredericksburg.com/spotsygovt/2010/07/16/more-on-bond-rating/

  • http://rightwingliberal.wordpress.com/ D.J. McGuire

    I do find it interesting that so many factors cited by the ratings agencies are economic factors, given that one of the biggest impacts on the local economy is (you know what’s coming, right?) tax rates.

    Fitch and S&P will be looking at property values (which numerous economists have shown to be sensitive to tax rates), as well as the general economic picture (which brings us to the fact that our business furniture/fixture tax and machine/tools tax is well above neighboring Stafford, which also doesn’t have BPOL).

    My point is, even the rating agencies don’t follow the stereotypical method for which they are infamous. A balanced budget with lower tax rates seems to make them happier than one with higher tax rates.

  • LarryG

    so… DJ…. would you consider the rating agencies to tend more than fiscal conservatism than tax&spend?

    and….

    what effect do you think multiple tax increases over the years has had on the bond ratings?

    do you think taxes and changes in tax rates have no effect on bond ratings?

  • LarryG

    agghhh… “TEND MORE TOWARDS fiscal conservatism than….”

  • http://rightwingliberal.wordpress.com/ D.J. McGuire

    1) Yes I do. Moreover, their methods point to the fact that they would prefer spending reductions to tax increases (but clearly prefer either over deficits or low reserve levels).

    2) Given the effects property tax increases are known to have on property values, they probably hurt the ratings some. How much is hard to say, as we can’t see the counterfactual, but given where we are, even I’ll admit there isn’t a lot of room for improvement on the ratings side. There is some, though.

    3) Repeating my answers to 1 and 2, I do think they have some effect. I’m not saying they don’t value reserves and balanced budgets above all else (see 1). I *am* saying that they clearly are also concerned about economic factors, which can be improved by lowering taxes.

  • LarryG

    so if we cut taxes. we’ d improve our rating?

  • dobre shunka

    Larry, if they bring in 500 million a year and spend 475 mil a year that would mean they are reserving 25 million a year. This are just example numbers.

    If they cut taxes and bring in 450 million, reserve 25 million and spend 425 million, I’m sure that spending model would make these people happier.

    The problem with this is you just lost 50 million out of your services. So buy a big bucket to put out your fire, get a gun to protect your house and buy some books to home school your kids.

    This is a fine line of what is needed, what is wanted and what people are willing to be taxed on.

  • LarryG

    re: fine line

    agree.

    so what would the county need to do to get to AAA?

    would higher taxes get the county to AAA?

    If we cut funding to schools by 10%, would that get us to AAA?

    Would a reserve fund twice as big – get us to AAA?

    or would none of these things do the trick because fundamentally, we do not have a strong enough local economy?

    If someone ran for office and one of his/her planks was to get us to a AAA rating.. what would they have to advocate to get us there?

  • dobre shunka

    I would guess the reserve being bigger than the debt we have outstanding would be a big help.So look at the debt more and not the yearly bills as much.

    If I ask for a $10,000 loan and I have $10,000 in savings, I think that goes a lot further than a guy making $150,000 but only having $1,000 in savings.

  • Sam

    @dobre,

    I dont think they can NOT use all of the generated funds. I know they can have a specific amount for a ‘rainy day’ fund but if a government always has a surplus its time to cut taxes.

  • LarryG

    how important (or not) is that surplus to the credit rating?

    if ya’ll haven’t caught on.. I’m best characterized sometimes as a devils advocate with some honest ignorance.

    so .. if a REPUBLICAN wanted to run for BOS in Spotsy:

    1. – would he/she care about the bond rating advancing to AAA?

    2. – if they did care about it, what steps would they want to advocate for?

    I note in my reading that a AAA credit rating is treated as a fiscal badge of honor about those counties who have it and also among those who want it.

    Virginia is but one of a half–dozen states with a AAA rating, right?

    even though we’ve had those tax&spend Dems in charge…eh?

  • SteveThomas

    You know, I’ve heard this “buy a bucket” tripe before. It didn’t ring true then and it won’t now.

    One of the (few) things Larry and I agree on is that the county budget, line by line, should be up on the county website for all to see. There are important reasons why, but the most important is the end of this ludicrous “lose all the services” arguement.

    There has NEVER been a government budget that could not be cut by 5 pct. And having the budget up on the website would show why.

    If you want proof of this, watch what happens with all the government “savings” coming from the ratings improvement. Are they going to put back in taxpayers’ pockets what they picked from them earlier this year? Watch and see.

    One last note. Most of the rationale for the ratings boost was due to the local economy. Business owners just got hit with a 40 pct property tax hike. Watch to see how that plays out over the coming years.

  • SteveThomas

    Larry- to answer your questions, you may have heard that Virginia had some elections last year that the GOP swept, we now have a Republican governor and a Republican GA.

    Not coincidentally, we also just produced a surplus because the government balanced its budget by prioritizing and making cuts- NOT by raising taxes. I say, if Governor McDonnell can do it with a much larger budget, we can do it here in Spotsy.

    Fiscal conservatism NEVER goes out of style, and tax-and-spend NEVER works!

  • LarryG

    Hey.. we AGREE on MORE than you might think but the McDonald “surplus” is a shabby smoke & mirrors trick – the kind the Republicans usually accuse the Dems of:

    Have you read this:

    ” State worker retirement system changes cause concern”

    ” But the two-year state budget also includes an IOU for about $620 million in contributions toward state employee and teacher pension plans that weren’t made in order to put the $70 billion spending plan into balance. The commitment to repay the money with interest, beginning in 2013, isn’t binding on future legislatures,”

    http://www2.timesdispatch.com/news/2010/jul/04/vrss04-ar-263788/

    so the answer is – in Spotsylvania that cutting taxes will result in better bond ratings? ( as long as we keep our reserves in line?)

    or is the answer that increased or decreased taxes have little, if anything to do with bond ratings?

  • SteveThomas

    Larry- it wasn’t smoke and mirrors, they cut more than $2 billion off the budget. And the problems VA has with its state pension plan mirrors the unsustainable situation other states have- and requires thought and a long-term fix, likely the raising of retirement age if I had to guess (but it’s only a a guess).

    DJ made the point that what the ratings agencies really likes was the reserves and the fact we did not run a deficit.

    You could have gotten there without a tax hike. And we could get to AAA without one too. Bond ratings are not necessarily synonymous with tax hikes- California, Illinois, New York are examples of states with very high taxes and crappy bond ratings.

  • Hap Connors

    Unlike the bloggers here, I have actually attended two of these trips when we brief these agencies, and quite simply, they look for a “willingness and ability to pay” for services and capital investments. They like our proactive approach to finding transportation solutions, creating new sources of revenue like the commercial centers at Cosners, Harrison Crossing and two villages – towne centre and Spotsylvania Courthouse – not to mention the hospital and the multiplier effect that will have. In short, they like good growth and they like public officials who manage their budgets with common sense v. ideological blinders and who have the guts to set realistic tax rates that pay for today’s services, while investing in the future. After my first meeting, where they debunked many of the metric myths that we were using (eg, debt per capita), we came back and passed new policies that are now guiding our decisions. The ratings and results speak for themselves.

  • dobreshunka

    Thank you, Mr. Connors.

    So the County might be looked at like a business? If you are not taking money and constantly improving it, it will degrade. And then loaning money to this failing business would not be prudent.

    Once again, it seems like finding the perfect balance.

  • LarryG

    Steve – on the State budget. If the problem with funding the pensions requires changes to the way they are funded – then the principled thing to do is to advocate those changes not cut the funding to them and defer it to the future – and then – because you did that – claim a surplus through budget cuts.

    This is my biggest complaint here about idealogical views of how govt should work.

    Tell the simple truth – don’t spin it.

    If McDonnell was truly serious about a structural problem is the pensions – he needed to say it up front and admit that by not fully funding them, that he believes that changes are need and NOT to claim that intermediate short-funding – as a surplus when what he did was kick the can down the road for someone else to deal with.

    I do not consider that kind of govt – responsible at all.

    If the Spotsy BOS did something like that – you’d be all over them for their irresponsible approach to govt.

    right?

  • LarryG

    Here’s the rest of the story and it includes issues related to Virginia’s AAA bond rating.

    “Beginning in 2013, the state will have to repay the money to the Virginia Retirement System over 10 years, with 7.5 percent interest.”

    Note this is NO DISCUSSION of changing retirement age.

    ” But the retirement system’s biggest role in solving the state’s budget dilemma was the deferral of payments for future liabilities that are not covered by current assets — or unfunded liabilities.”


    ” Either way you look at it, you’ve got to pay it back,” Sen. John Watkins, R-Powhatan said last week.”

    http://www2.timesdispatch.com/news/2010/mar/15/vrss15_20100314-222207-ar-10473/

    ” Senators also seemed somewhat wary of a seperate pension proposal unveiled by Gov. Bob McDonnell Wednesday that would essentially underfund the pension plan by $508 million over the next two years, repaying the figure in future years. The pension proposal amounted to more than 20 percent of the budget savings McDonnell proposed Wednesday.

    Speaking to senators at a meeting of both party’s caucuses this afternoon, McDonnell’s secretary of finance downplayed the possibility that Virginia’s vaunted AAA bond rating could be downgraded because of the pension change. But senators seemed skeptical.

    And at an afternoon meeting of the Finance Committee, Finance Secretary Ric Brown allowed that it will be far easier to explain the change to rating agencies in New York if the General Assembly simultaneously approved the long-term structural changes to the plan approved by the House of Delegates that would over time reduce the state’s payment obligations.

    Said Del. Chris Jones, who was helping to present the House bill, “You can’t do one without the other without it having an impact on the bond rating, in my opinion.”

    and yet it appears that is exactly what was done, no?

    this could ultimately cause questions from the bond agencies at the state and local level as to how these liabilities will be funded or ..those costs absorbed ..

    Don’t get me wrong – I can understand the nature of the issues… but to make the cuts without the structural changes… kicking the hard decisions down the road.. and the claiming that permanent “cuts” are what helped balance the budget….and get the surplus…

    is simply not the truth… in my view.

    and again.. if our local BOS did something like that – I’m quite sure that it would be used as a campaign weapon to assert irresponsible fiscal behavior on the part of the BOS.

    correct?

  • LarryG

    oops.. here’s the link from the second group of quotes:

    http://www2.timesdispatch.com/news/2010/mar/15/vrss15_20100314-222207-ar-10473/

  • http://MAVRICKinc7@msn.com Martin (Marty) Work

    So, stealing from Paul to Pay Peter is still a fashionable way of conducting business and bond markets are a product of stealth financing structures. It’s almost like having to relive the Wall Street meltdown all over again and we’re still standing around waiting for the fiscal projection to be announced on when the other shoe gets dropped.

    How many more juggling acts do we have to audition before realizing State and local governments are only supplying the public with half measures, making promises
    and cashing checks against the tax payers savings accounts, without transparency or accountability to those footing the bills.

    Since we bloggers didn’t show up at these bond appraisal meetings, who else besides Supv. Connors showed up with the BOS to leverage GO bond ratings and spending agendas the County intends to develope, once “by-right”, Urban Development Areas and FAMPO’s landuse and zoning proposals are put into effect by our elected officials and County government?

    If this Bond Rating dialogue were put under a microscope, even at half it power, YOU might come to visualize how big some of the holes are in the new “guidelines” being developed by your elected leaders and THEIR special interest constituents.

    YOU can start NOW by asking WHO is going to pay for all this transportation, road construction, maintenance and infrastructure, this fiscal year and many more down the line.
    YOU get three guesses but the first 2 don’t count.

    If REGIONAL financial strength is something your elected officials are coming to rely on and spending against unlimited taxing resources, maybe we shouldn’t care much about how the County is spending your money, from this year to the next ten (10).

    Maybe Spotsylvania County has enough collateral interest and resources in its development community and special interest groups that bond ratings are nothing more than the County’s debt payment schedule, supplied over the next 20 years, at 3% interest, since the market can’t bring itself to underwrite development and construction communities at 7-10% interest.

    Simply said, Spotsylvanai County is a funding mechanism for the development community, at 3% interest to build over Spotsylvania County, at “by-right” cost and tax payer
    consensus for paying more in realestate taxes to offset what commercial is having to pay to make up the difference.

    What goes around, eventually comes around and whether YOU can pay doesn’t really mean much in the scheme of things and your elected official’s vision of what the Spotsy landscapeis going to look like within the next 5 years. So, it’s not as if you aren’t being provided a head start to make yet another uninformed decision in the wake of reform, consolidation of government and more SPEED in the governing policies, prossess and procedures.

  • LarryG

    Well, the county – and the state are limited to how many bonds they can sell to pay for infrastructure.

    But I was struck by the different ways we judge how the state balances the budget – and Spotsylvania does.

    For instance, Spotsylvania can apparently “equalize” the tax rate to make up for revenue shortfalls but if the State does this – it”s treated as an unacceptable tax increase.

    On the other hand – the State can engage is what appears to be accounting tomfoolery…to essentially defer debt to the future …then have the chutzpa to claim a “surplus” whereas if this was done in Spotsylvania – those who hew from the Republican side of the house would descend on them like hyenas on a fresh kill.

    Or perhaps I’ve got this screwed up and need further education for the resident Republicans here.

    Is there a double standard here or not?

  • SteveThomas

    What the heck are you fellas doing posting blog comments on a nice day like this? Go on a walk, take your family or a pet, enjoy it!

    OK, lots of questions here, too many to go one by one. So I’ll try to answer as best I can.

    This debate increasingly looks like Democrats trying to use bond ratings to justify tax-and-spend policies in the middle of a recession. Well, I’m not buying. Doesn’t work in DC and it won’t work here.

    The ratings agencies actually said they thought the major economic development projects the county had- including the hospital- carried the most weight, along with the reserves. Well, you can maintain reserves a lot of different ways. But keep raising taxes and you’ll quickly learn that the rest of this house-of-cards arguement falls apart.

    California had no problem raising taxes to spend on “infrastructure” and obligations, and to take out sovereign debt. Ditto Illinois, New York, Michigan. Except, what happened? They raised taxes, lost economic drivers (companies that produce and employ people), and all of a sudden their bond rating dives because they can’t afford to repay their obligations. And I noticed that no one has yet refuted that arguement, thus I can only assume everyone acknowledges its correctness, even if it is inconvenient to that one you’re trying to make.

    The tax-and-spend plan is self-defeating, which is the reason that, in fact, governments are NOT like businesses. I look at a company, say Coca-Cola, and I want them to get bigger and succeed. I look at government, and I want it to do less and contract because that’s the only way it becomes successful. Governments are fundamentally unproductive parts of society and need to be reined in to ensure freedom and prosperity, not expanded by increase of “revenue” (taxation). Common sense and thousands of years of human history back me up on this.

    Which brings us to VA. My understanding was that there are fundamental changes in the public pension structure that needed to happen. They take time because they want to do it right, not an unreasonable line of thought since we are talking about peoples’ retirement and the long-term stability of the state here. They put a temporary fix in there because they wanted to fix the underlying problem once and for all, once we were outside the immediate crisis at hand that McDonnell inherited from Kaine.

    That was fun. Have a good weekend everyone.

  • LarryG

    re: HOT HOT HOT!

    went for dog walk at 9 ish this morning … 2 miles… easy stroll

    sweat rolling off our bodies … totally soaked clothes at end of “walk”.

    We all took showers and then dried off in front of a fan…

    we do this every day by the way – and the weather this year in terms of heat & humidity (with the exception of that wonderful 3 days) is as bad as I can remember and this goes back… a few decades.

    I’m praying that August is not any worse.

  • GIVEMEABREAK2M

    Well Mr. Thomas if the STATE has done such a great job, pleaase tell me why funding in vital areas of state government responsibility have continued to decline. These are areas that most people would consider quality of life issues. For years school and transportation funding to localities have continued to decline. You can sit back on your Republican high horse and “claim” what a wonder job you and your political party have done. However, stop and check to see what has been done by your party to improve upon the quality of life for the citizens in Virginia and the answer would be – VERY LITTLE. The reason that local governments are forced to do so many things today which require increases in taxes, etc. is because the state government over recent years has failed to do its job. It is that plain and simple. Local governments now are in the road building business, thanks to the state government. Local governments now are required to put more local tax dollars towards education because of state reductions in education. The list goes on and on. I think we should do away with the General Assembly and leave it up to local elected officials to operaate and manage their operations.

  • SteveThomas

    Wow. Well, I guess my first observation is I truly hope someone like Gimmeabreak is the Dems’ spokesman this year and next- the GOP candidates will clean house if so.

    You know, there is a legitimate arguement to be made that local supervisors approve development after development without any regard to the effects it has on roads or schools- then come crying to the state when it creates Q of L issues for their localities.

    Some semblance of balance, foresight, or wisdom might head off problems like this at the pass. Myself, I believe in property rights but don’t want to see Spotsy turned into Fairfax either.

  • http://MAVRICKinc7@msn.com Martin (Marty) Work

    Steve, the only thing GIVEMEABREAK2M is admitting to is what local governments and elected officials fully intend to put into place, with the Commonwealth of Virginia’s blessing and financial assistance or lack there of.

    Local governments want control and taxing authority over its County constituents. What is it about current taxing and legislated matters, working their way through the General Assembly, you don’t understand?

    Why don’t you call up Supv. Connors, not as a BOS member, but a member tactician of FAMPO, in waiting, along with Logan, Pitts, Skinner and County Adminiatration to see how interested they are in having this proposed legislation take hold.

    They’re all following this legislatioin, since it would necessarily impower local elected officials with total control of County business agendas, without the publics knowledge or need for CONSENSUS. After all, without CONSENSUS the local empires and governments would be standing still in their own cement, playing their constituents against the States withdrawal from the public domain and leaving them in total control of its citizens pocketbooks and next original thought.

    Simply said, this is not about politics, political agendas , balance, foresight or wisdom. It’s about CONTROL which GIVEMEABREAK2M wants more than anything else for his special interest associations with County Government, that afford its citizens no transparency or accountability. Why? They would be the only ones sitting at the table, making decisions for its population, by proxy and legislation that quantifies and qualifies their sole right to tax and govern without exception.

    When the REGIONAL paradignum makes it way to stage center, maybe you’ll better understand this was never about foresight, balance, or wisdom. At least, not on the part of the governed citizens of Spotsylvania County or the REGION’S citizens, who still don’t have a clue what’s going on under their very noses.

    Joining VRE and embracing the terms of the VRE Master Agreement should be example enough of things to come, which are already on the drawing board. Instead of Fairfax coming to our front doors, you might want to use Tysons Corner or even Cosners Corner as your template for what’s coming next to Spotsylvanai County.

  • LarryG

    well. just to be clear about the lessening of State Funding for roads and schools.

    Is it that the state is hoarding the money in a secret vault in Richmond ?

    Isn’t the truth that revenues at the state level have decreased and they have, in turn, passed those “cuts” down to the localities?

    Va and VDOT did not “cut” local funding of roads. They just don’t have any money to give us unless they raise the gas tax.

    so is the solution to (for instance) transportation “cuts” for the state to …increase the gas tax that Spotsylvania residents pay – so that the state can then have some money to give back to Spotsylvania?

    That’s why I asked the “equalization” question.

    Why is it apparently okay for the county to “equalize” when it’s tax revenues drop …. i.e. to “adjust” the tax rate to continue to bring in the same revenues ….

    but if the state did that – it would not be called “equalization” but an “outrageous and unwarranted tax increase”.

    right?

    I’m just asking.. and hoping to get an opinion from the resident fiscal conservatives here – Steve & D.J. and anyone else who wants to play.

    anyone want to offer an opinion about why Spotsy can “equalize” and the State cannot?

  • bhaas

    I have not verified this, but I believe VDOT funding was “tightened” prior to the current economic crisis that has lowered state revenue collections.

    Back in the 80′s, VA had a transportation fund; over the years since, the GA has seen fit to “find” other ways to spend money rather than transportation. IMHO, the difference now is that they have an excuse.

  • LarryG

    just FYI – the Transportation fund is effectively walled off from the General Fund.

    The only General Fund money that goes into the Transportation Fund is 1/2% of the Sales tax.

    As far as I know – not a penny has been taken out of the transportation fund.

    The basic problem is that the gas tax has not increased in 26 years and it’s finally caught up with us.

    For a look at the historical trend for transportation money in Va – go to :

    http://www.dmv.virginia.gov/webdoc/pdf/fiscal.pdf

    but this sort of brings up the basic issue of whether taxes ought to be raised or not.

    If we follow Steve’s (or was it D.J.s?) thought – he says that we SHOULD adjust taxes for inflation.

    If we had indexed the gas tax – it would be about double what it is now – and VDOT would not be broke and Spotsylvania would have continued to receive transportation money.

    Now.. because no Governor was either willing or successful at getting the General Assembly to address the inflation problem with the gas tax – we are basically at the point where we have to decide if we need to have a gas tax increase or not.

    OR – we could do what the Republicans have been saying – take some responsibility for the problem.

    Do we want to pay a gas tax increase for transportation?

    If you say yes – then what is the difference of paying it at the State level or paying it at the local level?

    I’d bet we get to keep more of it if we do it at the local level and get less of it if we do it at the state level.

    Right now – Spotsylvania taxpayers pay on the order of 33 million dollars a year to VDOT in Richmond.

    How much of it do we get back?

  • bhaas

    As usual, I “bow” to Larry’s wisdom in Transpo and Dev issues.

    (Deep Bow at this Point)

    However, if he reads carefully what I wrote, I did not say anything had been taken “out” of the TF. I simply made two points.

    1) The “tightening” on VDOT funds started “prior” to the current economic crisis.
    2) Over the years the GA has found other ways to spend money than transportation.

    I believe the last column (Trends) in Larry’s referenced data bears BOTH of these statements out quite nicely. The trend appears to be NOT generally positive.

    As for gasoline taxes…I agree with Larry…raise them at the local level. However, Virginia has a state-wide transportation problem and Spotsy fixing their roads will do little for the rest of the state. Therefore, ALL localities need to raise their gas taxes for maximum benefit.

  • http://MAVRICKinc7@msn.com Martin (Marty) Work

    So, lets form a REGIONAL government, made up of REGIONAL elected officials, WITH taxing authority of the 300,000 citizens residing in Stafford, Fredericksburg, Spotsy, KG and Caroline counties, pool all of the tax payers annual tax contributions and liabilities and conduct business as a REGION, with one pocketbook, a single State and Federal vision on what the REGION is going to look like in the next 20 years, by way of transportation, road construction, infrastructure, high density populations, rural development and the next Tyson’s Corner BEFORE we send our money to the State, VRE, CSX, and any other State or Federal AUTHORITIES.

    We can be our own little country, ruled by TOLL BOOTH mentalities, FAMPO’s Unified Planning Work Program, Public Participation Plan for REGIONAL Transportation Planning, special interest, development heirarchy’s, and politicians slicing up their piece of the REGIONAL pie, along the same lines they do with their elected positions and districts WITHIN the REGION.

    TRANSPORTATION is not a single dimension. It’s funded from MULTIPLE RESOURCES that your elected officials can hardly bring themselves to acknowlege exist, were it not for the public asking harder questions when they get pressed for more tax dollars to underwrite a political agenda and not the business of its citizens and those who think they know what’s best for the governed.

    I’ll wait as long as I can for Larry to get an answer back from those who should know how much WE get get back from the
    State, out of the $33 MILLION WE send to VDOT on an annual basis.

    And YES Bill, the VDOT belt tightening started long before we knew a depression was making its way to our doorstep. VDOT knew decades ago that transportation could never be sustained, but decided to use transportation dollars for a comfortable chair in the General Assembly.

    It’s not about making a difference at the local level, by raising local gas taxes. It’s about creating a REGIONAL taxing mechanism that the State would no longer have to deal with from their end of the bargain, because the State would have already given their taxing authority up to the local governments they hope to make a REGION, by legislated AUTHORITY, Urban Development Areas, high density populations and empire building.

    It really shouldn’t be that too much longer before the other shoe/ show drops in for a look-see at your local TOWN HALL MEETINGS.

  • bhaas

    I think “regionalization”may be in our future, in at least some aspects. I can even see where it might be good in some ways, but, like all things government, I am not smart enough to see the bad side yet that I am pretty sure lies out there.

  • LarryG

    on transportation and the gas tax. The gas tax in Va is 100% dedicated to transportation and nothing else. 1/2% of the sales tax is also. Other taxes dedicated to transportation are the tax on car sales and other related.

    Of possible interest is the fact that the gas tax currently funds only about 25% of transportation.

    One penny increase on the gas tax – at the state level will generate the handsome sum of $50 million which sounds impressive until you realize it’s got to be divided up about 133 ways and Spotsylvania’s “share” of that would be about $375.000 dollars.

    and therein lies the problem – even a nickel increase on the gas tax is not going to substantially change things.

    What is not fully realized by many is that besides inflation reducing what the gas tax dollars can buy – every new road, every new subdivision road every new Spotsylvania Parkway or SouthPoint Parkway adds to the maintenance and operations costs that also eat up VDOT’s ever shrinking pot of money.

    When McDonnell reopened the rest areas earlier this year – he did it by diverting money from the snow removal fund – which turned out to be bad timing … but it illustrates that the easiest dollars he could find to reopen the rest areas – came from money set aside for snow removal.

    Now I would think no matter whether you were Democrat, or Republican, Conservative or Liberal, pro-development or anti-development or believed in conspiracies (or not) – that no better case for a tax increase could be made than for transportation.

    But our two resident “no tax increase is acceptable” Republicans in residence have gone quiet on this.

    Bob McDonnell has this crazy idea that we can find our roads from liquor sales and oil drilling revenues … and to think they call liberals wackos.. tsk tsk…

    Of course, most polls show about 80% of folks are opposed to an increase in the gas tax anyhow and not even the Republicans are THAT stupid, eh?

  • SteveThomas

    Larry, it’s about prioritization. Gpovernment at all levels must prioritize: projects, duties, etc. Tax-and-spend politicians never want to prioritize and want to do everything on the backs of the taxpayer.

    It’s more about being weak decisionmakers. Give me a politician with integrity anyday, who can look people in the eye and say, “I’m sorry, we can’t do that this year”.

  • LarryG

    Steve – this is pretty simple. The transportation fund is separate and distinct from the General Fund.

    The Transportation Fund is basically broke – a victim of a non-indexed gas tax.

    What possible “priorities” could be at issue?

    Also .. on the “backs of the taxpayer” is a transportation network that is deteriorating and not “delivering” to the taxpayers that use it.

    How many years will you or “weak” decision-makers kick the transportation can down the road?

    I’m just looking for a principled answer on this.

    If you feel that we spend adequately for roads and that taxes increases are not needed for roads – then say so.

    If you do not – then kindly proffer your view.

    I’ve done mine.

    I think subdivision roads should be HOA not VDOT.

    I support tolls for roads that they can be implemented. I see a toll as much more quid-pro-quo user fee transaction than mandatory taxes.

    I support referenda for local ..AND Regional roads.

    I support transportation districts and CDAs for both Commercial and REsidential development.

    What say you?

    Bonus Question: Should we be funding roads from liquor sales?

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