Figure 3
Growth of Taxes, Income, and Population Plus Inflation, 19902000
100%
92%
All States
90%
79%
80%
Virginia
73%
70%
70%
60%
50%
45%
42%
40%
30%
20%
10%
0%
Tax revenues
Personal income
Population plus inflation
Source: U.S. Bureau of the Census, government finance data, www.census.gov/govs/www/state.html.
Note: All figures are nominal, or current, dollars.
Virginia taxes
to meet their own needs, thus reducing their
Fairfax County Board of Supervisors, Kate
economic freedom.
Hanley, who said she did not plan to raise taxes,
have risen more
Figure 3 shows that between 1990 and
was reelected in 1999, the annual property tax
quickly than
2000 state taxes in Virginia increased 92 per-
bill for the average Fairfax family is up about
$1,000 by one estimate.14
cent, compared to income growth of 73 per-
those of most
cent. Population growth plus inflation in
Similar trends have occurred in other
states.
Virginia grew 45 percent during that period.
counties. In Loudoun County, tax revenues
Virginia's tax growth outpaced the 50-state
on real property soared 63 percent between
1999 and 2002.15 In Arlington County, tax
average by 13 percentage points in the 1990s.
Although state taxes have risen quickly
revenues on real property increased 34 per-
cent in the last three years.16
across the country, Virginia taxes have risen
more quickly than those of most states. The
In addition, the scheduled final elimina-
proposed Virginia sales tax increases would
tion of the car tax in Virginia has been
make the problem of excess tax growth worse
delayed because of the state's budget imbal-
in the years ahead.
ance. This will cost Virginia taxpayers rough-
ly $300 million for every year of delay.17 So
Moreover, this tax increase would come on
top of soaring property tax increases in northern
imposing a sales tax increase now would be
Virginia and other regions. In Fairfax County,
piling tax increase on tax increase.
where 1 million northern Virginians live, proper-
4. The State Budget Can Be Reprioritized
ty tax revenues, which soared 8.5 percent in 2001
to Fund Transportation
and 13.2 percent in 2002, will increase 12.6 per-
cent in 2003.13As property values have exploded,
As discussed, state funding for trans-
local governments have been flooded with extra
portation primarily comes from federal grant
cash from homeowners. For example, Fairfax
money, one-half cent of the state sales tax,
County property tax assessments for 2003 went
the gasoline tax, and other taxes. In regions
up an average of 15 percent. Since the chair of the
of rapid growth, such as northern Virginia,
5