Arthur G. Purves, president of the Fairfax County Taxpayers Alliance, today urged Virginians to vote against the two Virginia bond referenda, $119 million for parks and $900 million for colleges.  He also urged Fairfax County residents to vote against the county’s two referenda, $60 million for public safety and $20 million for parks.  Mr. Purves charged, "Due to excessive bond sales, both Virginia and Fairfax County are wasting a billion dollars on interest.  Frequent bond sales are the bond underwriter’s paradise and the taxpayer’s nightmare."

Last year Fairfax County raised $200 million from bonds.  However, the county then paid $200 million for debt service on the bonds.  Of the $200 million paid, $73 million was for interest. The county paid $73 million in interest -- just to borrow enough money to pay the debt service.  Since each penny of the real estate tax rate raises $11 million in tax revenue, the $73 million interest payment accounts for six cents of Fairfax County’s $1.21 real estate tax rate.

This has been going on for over twenty years.  See graphs at www.fcta.org . Each year, Fairfax County’s annual bond sales raise only about enough money to pay the debt service.  The interest cost of these bonds is over $1 billion.

All of this goes unmentioned in Fairfax County’s flyer, "Citizen Information on 2002 Bond Referendum", which was mailed countywide at taxpayers’ expense.

The revenue raised from bond sales should be ten times larger than the debt service.  For this to happen, all old bonds must be paid off before selling new bonds.  However Virginia and Fairfax County sell bonds every year.  Until 1996, Virginia exercised some restraint in bond sales.  Now Virginia is finding itself in the same situation as Fairfax County.  The interest cost on Virginia’s tax-supported bonds is well over a billion dollars.

Capital construction and maintenance are annual expenses and should be paid for from Virginia’s and Fairfax County’s mushrooming operating budgets.  Last summer a report on state spending by the Virginia Joint Legislative Audit Review Committee, Review of State Spending: June 2002 Update, reported (p.11) that between 1981 and 2000, enrollment in Virginia public colleges increased by 25 percent while inflation-adjusted spending for public colleges increased 114 percent.

This year, Virginia’s budget is $9 billion more than needed to keep up with population and inflation growth since 1979.  Fairfax County’s budget is $1 billion more than needed to keep up with population and inflation growth over the past 27 years.  Using these extra revenues instead of bonds would have saved billions of dollars of interest.