Feds should follow Prince William County's exampleAugust 6, 2012
By: Corey Stewart
News and Messenger
It’s a disturbing trend: cities and counties on financial life support, and some going over the cliff into bankruptcy. Fans of big government may claim that the number of municipalities in default is not unusual. But, the truth that economists will tell you is there’s a lag effect. Five years after the Great Depression began, cities and counties were still declaring bankruptcy.
In the wake of the Great Recession, municipal defaults continue. A Reuters journalist who looked at the numbers earlier this year said a new “series of major cities and counties” are in danger of defaulting, and for many of them the reason will be “financial policies that put them on course to live well beyond their means.”
It’s not just Washington that’s clueless about balancing a budget and the consequences of deficit spending year after year. Whether it’s unsustainable contracts and costly benefits for municipal employees, or poor planning and massive public works projects, the outcome at the local level is the same: bloated governments that ratchet up taxes in a desperate attempt to stay in the black.
There are too few examples of major counties and cities that have cut spending, cut taxes, AND are enjoying strong economic growth, but that’s exactly the pattern we’ve followed in Prince William County.
This past week an international organization that promotes best practices and good financial management of governments handed out its annual awards for excellence in government finance. The Government Finance Officers Association honored Prince William as one of the top counties in the nation for our financial practices. The award goes hand-in-hand with the AAA bond rating we’ve received from all three major credit rating agencies. It’s a bond rating that less than 1 percent of all local governments in the country can claim, and it’s saved Prince William taxpayer $18 million in just the past year.
Prince William County is the Commonwealth’s second largest county and our financial success has come from hard work and a willingness to make the tough decisions that voters put us in office to make. Since I’ve been Chair of the Board of Supervisors, we’ve cut $143 million from the county budget, reduced taxes by 13 percent, and eliminated more than 300 positions, all while Prince William County was ranked No. 1 in job growth in Virginia, and No. 3 for job growth in the nation.
I talk to residents and small business owners all across Virginia; men and women who have to balance their budgets or face disaster. They often want to know how their elected officials can routinely overspend, and then simply raise taxes to patch the deficits they’ve created; patches that only last until the next spending binge. Their criticism is exactly right, and elected officials have been hearing it loud and clear for years.
Prince William County is in Northern Virginia. We’re not far from Maryland. This year we’ve watched our friends across the Potomac refuse to cut their budget, and opt instead for sweeping tax increases. It’s good for us when a neighboring state has a higher sales tax, corporate tax, and gas tax, and now hikes its income tax rates. The businesses driven out by one state’s tax burden often look for a new home where tax rates are reasonable and governments are responsible and efficient.
Unfortunately, the job of controlling a local budget isn’t getting any easier. Washington is still cranking out new regulations and mandates, many of which impose liabilities on state and local governments, and on the businesses that are our lifeblood. We desperately need leadership at the federal level that will do what we’ve done in Prince William: look for effective ways to shrink government, take fiscal responsibility seriously, and work WITH businesses, not against them.
Prince William County is proud to stand as a model of how fiscal conservatism works. We’re reaping the benefits of decisions to cut spending, while focusing on infrastructure and making sure government does what it’s supposed to do wisely and efficiently.