The Club for Growth

Phillip Rodokanakis



The Warrenton Miracle

George Fitch, mayor of Warrenton, proved he can cut spending and lower taxes. Jerry Kilgore, who's seeking the Republican gubernatorial nomination as a status quo candidate, better watch out.


 

Warrenton, Va., is a small township with a population of about 7,000 residents. It’s located in the heart of Fauquier County, some 50 miles southwest of the District of Columbia. This is not a place where one expects to discover new economic models. Yet what’s being referred to as the “Warrenton miracle” should get most economists to reconsider what they learned in school.

 

A few years ago, a gentleman by the name of George Fitch became very unhappy with the way things were being managed by Warrenton’s town council. At the time, the town was no different than many other local government bodies, which are caught in an endless cycle of increased operating costs, followed by higher property and business taxes.

 

George felt that the town was mismanaged and that things would only get worse if something drastic wasn’t done to stop the endless tax-and-spend cycle. So he threw his hat in the ring and ran for the office of mayor.

 

A political neophyte, George was told that his campaign did not stand a chance. But he persisted and beat the odds given to him by the pundits and the political establishment. George’s platform of lower taxes and smaller government greatly appealed to the voters--in this regard, Warrenton was no different from the rest of the state. Unfortunately, time and time again, the majority of politicians fail to get this simple message.

 

Once elected, George applied performance-based budgeting principles while reforming the government from the ground up. The principles were the same as those of the private sector, where the bottom line governs most business decisions.

 

George’s accomplishments over the last six years have been nothing short of an economic miracle. They are classic examples of out-of-the-box thinking, which should be studied by every government administrator in our Commonwealth. Today, Warrenton stands as the lowest taxed community in Virginia!

 

At a time where most local governments continue to raise the property tax burden on their residents, Warrenton cut real estate taxes by 80 percent! The real estate levy charged per $100 of assessed value was slashed from 18 cents to only 3 cents.

 

Compare this rate to other towns in our Commonwealth, where some townships levy as much as 60 cents per $100 of assessed value. For example, the neighboring town of The Plains, which is located less than 15 miles north of Warrenton, assesses a real estate levy of 50 cents. I’m certain that the residents of The Plains do not receive many more services than the residents of Warrenton to justify the 47 cents premium in additional taxes.

 

But the positive results are not limited to real estate taxes. Personal property taxes were reduced by 55 percent, from $2.20 to $1.00 per $100 of assessed value. And certain business taxes were reduced by more than 20 percent.

 

At a time when other localities can’t control their spending, Warrenton enjoys large operating surpluses. This is a truly astonishing record; no wonder George was re-elected with more than 60 percent of the vote.

 

These accomplishments were achieved through wholesale spending reform. Not just small, temporary reductions in the rate of spending growth but long-term permanent structural reforms.

 

Examples include extending the life of public vehicles from 75,000 miles to 125,000 miles, and reducing of the workforce through attrition. The workforce today in Warrenton is 10 percent smaller than it was five years ago, even though the town has grown by more than 30 percent.

 

The economic development department had cost the town more than $1 million, but hadn’t brought one single new business to Warrenton. So George abolished it. Instead, he cut taxes and promoted a quality of life that attracted new businesses. More than 125 new businesses were established in Warrenton in the last five years; up from 18 in the previous ten years.

 

Now George wants to bring his economic miracle to Richmond. He thinks that our state government budget is way out of control. He believes that by applying the same no-nonsense budgetary reforms, he can slash state spending.

 

This should come as no surprise to anyone. Contrary to the rhetoric we’ve been bombarded with this year, culminating in the largest tax increase in the history of Virginia, a number of studies show that state government is wasting billions of dollars.

 

For starters, the Wilder commission identified more than $1 billion in potential savings. The report established that a tax increase was totally unnecessary. Instead Gov. Mark R. Warner shelved the report and proposed a commensurate $1 billion tax increase. Why bother cutting the budget when, in an out-of-control Republican Senate, no tax increase proposal is small enough for the likes of Sen. John Chichester, R-Fredericksburg, the chairman of the Senate Finance Committee?

 

Evan Mark Warner has sporadically mentioned that savings of $2 billion or more could be achieved by streamlining services and by consolidating IT functions across the government. But talking about budget cuts doesn’t compare to implementing budget cuts, so our governor found it easier to raise taxes instead.

 

On the other hand, if George Fitch’s approach is implemented on our state budget, we may be in for significant--not cosmetic--reforms. That’s why it was so refreshing to hear that George is now exploring a run for the Republican nomination for governor.

When it comes to Republican Party politics, Attorney General Jerry Kilgore is sporting himself as the presumptive nominee for governor. However, Kilgore has been an uninspiring and disappointing candidate for the grassroots activists of the party. Other than stating that he’s against higher taxes, Kilgore has not articulated any concrete policy proposals.

 

At a time when our Commonwealth’s treasury is running a $1 billion surplus--which clearly shows that this year’s tax increase was unnecessary--Kilgore has been quiet on whether he will campaign on a proposal to roll back the last tax increase. Kilgore is conflicted as he supports the status quo and has gone on record rebuffing any attempts to hold accountable the Republican legislators that voted for the tax increase.

In the meantime, George Fitch is spending his time reviewing Virginia’s budget and identifying areas that are prime for the type of treatment he likes to dish. Hopefully, his review will culminate in concrete proposals that will help him launch a successful statewide campaign.

 

Those who think that we should keep on raising taxes, as proposed by Sen. Chichester and other tax-and-spend Republicans, clearly will be rooting for Kilgore. However, the grassroots activists who yearn for a candidate that will uphold the Republican Party’s core beliefs in lower taxes and smaller government should rejoice when George announces his candidacy.

Virginia’s budget cannot withstand many more years of the current tax-and-spend groupthink that permeates the halls of the Legislative Assembly and state Government. Once George Fitch enters the race, we should finally be presented with some contrasting choices.

 

-- November 29, 2004

 

 

 

 

 

 

 

 

 

 

 

 

Phillip Rodokanakis, a Certified Fraud Examiner, lives in Oak Hill. He is the managing partner of U.S. Data Forensics, LLC, a company specializing in Computer Forensics, Fraud Investigations, and Litigation Support. He is also the Vice President of the Virginia Club for Growth.

 

He can be reached by e-mail at phil_r@cox.net.

 


 

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