Virginia county governments are required to put bond issuance to a voter referendum in order to borrow money on behalf of the county. Bond issuance is usually used by governments to raise money for large capital expenditures, and those bonds are repaid to their purchasers at a later date (plus interest). Bond referendums in Virginia almost always pass by a large margin, in large part because people think they are voting in favor of the agencies that will benefit (after all, who wants to vote ‘against’ schools, parks, or transportation?). Many voters do not realize that bond issuance contributes to government debt and should be used sparingly.
Acquisition of Fire and Rescue Apparatus
Citizens of Loudoun County, Virginia, will be asked through a bond referendum to authorize the Board of Supervisors to borrow up to $2.75 million to finance, in whole or in part, new fire and rescue apparatus. You might be forgiven for experiencing a bit of deja-vu here; an almost-identical bond referendum for 3 million dollars was on the Loudoun County ballot last year.
In 2011, Off on a Tangent endorsed voting yes on that referendum, and it passed with a seventy-two percent vote on the day of the election. Loudoun is a fast-growing county with unique public safety challenges, and it is essential that our emergency services are appropriately funded. On our northern border is a large river, on our eastern border is a major international airport, and on our western border is a mountain range. We have two-lane rural highways and eight-lane expressways. We have acres upon acres of suburban communities, and acres upon acres of rural forests. We have towering office buildings and sprawling farms and wineries. As I said in 2011, the men and women of Loudoun County Fire and Rescue “need to be ready to face anything—residential fires, plane crashes, urban evacuations, water rescues, national emergencies, and skateboarding accidents.”
According to the U.S. Census, we were the fastest growing county in the United States in the first decade of the 2000s, so it is unsurprising that we need to continually expand our fire and rescue capabilities. The Loudoun County Board of Supervisors has allocated over $56.7 million to ‘Fire and Rescue Services’ in their 2013 budget, almost 4 million dollars more than was allocated in 2012, but has planned to fund new apparatus through bonds rather than directly from tax revenue and the general fund. Inexplicably, the county has scheduled repeating bond referendums for this purpose—3 million dollars in 2011, $2.75 million this year, and another 3 million dollars in 2013, 2014, 2015, 2016, and 2017 respectively (cf., page 7-23 and 7-24 of the [PDF link]). Why didn’t they just propose a single $20.75 million bond referendum last year and be done with it? Your guess is as good as mine.
I am reluctant to endorse taking on new debt in the current economic climate; Loudoun County already dedicates nearly fifteen percent of its annual budget to debt service, and we cannot assume that revenue will keep pace as we add even more debt. The expected multi-year nickel-and-dime series of fire and rescue bond referendums is inexplicable and annoying. But, having said that, I would have happily endorsed a single $20.75 million referendum for fire and rescue apparatus last year, if such a referendum had been before me, given the explosive growth of the county and the obvious public good of a well-funded, well-equipped fire and rescue service. I have no reason to reject part two of its multi-part equivalent at this time. Having said that, the county should consider funding future iterations through general fund disbursements rather than through bond issuance. I endorse a YES vote on the Fire and Rescue Apparatus bond referendum.
School Capital Projects
Citizens of Loudoun County, Virginia, will be asked through a bond referendum to authorize the Board of Supervisors to borrow up to $136.15 million to finance, in whole or in part, new schools and school improvements. The money would be used to build two new high schools and to renovate a third. You might be forgiven for experiencing more deja-vu here; a very similar bond referendum for $269.62 million was on the ballot last year.
Off on a Tangent strongly endorsed a no vote on that referendum, but the voters passed it by a solid fifty-eight percent on election day. I was pleased to see it pass by a smaller margin than most bond referendums, but remained disappointed in the outcome. Contrary to popular belief, our schools—like most in the United States—are very well funded. The Loudoun County Board of Supervisors has allocated over 858 million dollars to the schools, plus another 120 million dollars to school debt service, and another almost 208 million dollars for school capital expenditures. Together, that accounts for a whopping sixty-seven percent of the county’s 2013 budget appropriations. Loudoun County Public Schools (LCPS) has a 2013 operating budget of a mind-boggling $1.16 billion.
LCPS estimates there will be 68,170 students in the system in 2013, and claims that it will cost $11,595 in per-pupil expenditures to educate them—a slight increase from last year. But that just doesn’t add up. Doing some simple elementary-school math reveals that per-student cost multiplied by the number of students comes out at only $790.43 million—far less than the actual LCPS annual budget. It turns out that the official per-pupil expenditure numbers exclude capital and debt service costs from the equation, in another fine example of government number-fudging. The real per-pupil cost in 2013 will be more like $17,016. Incredible.
This bond referendum is not a one-time loan request to get our schools through a difficult time. The Board of Supervisors, like they did for the above fire and rescue bonds referendum, has scheduled additional school bonds out into the future. Last year’s $269.62 million and this year’s $136.15 million will be joined by planned referendums for $39.96 million in 2013, $72.85 million in 2014, $91.59 million in 2015, $48.63 million in 2016, and $181.76 million in 2017 (cf., page 7-23 and 7-24 of the[PDF link]). That’s a lot of money on the county credit card.
What does all this ‘investment’ get us? Under-performing schools that do a poor job of preparing students for the real world. The fact remains that we are not receiving an appropriate return on our investment, especially when we consider that this county—and this country—is spending more on its schools than it ever has before. Our schools do not need, and do not deserve, another round of taxpayer largess and unnecessary public debt. As I said last year, “There is no reasonable justification for authorizing a bond issuance of this magnitude without educational reform of equal or greater magnitude to go along with it.” I strongly endorse a NO vote on the School Capital Projects bond referendum.