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George
Fitch is such a long shot for in the race for governor
that you might wonder why he ever bothered to declare
his candidacy. After all, former Attorney General Jerry
Kilgore is widely presumed to have a lock on the
Republican nomination. He’s got name recognition,
he’s got a $6 million war chest, and he’s got the party honchos
all lined up behind him. The nomination is all over but
the throwing of the confetti.
But
it would be a mistake to dismiss Fitch as a gadfly. No
one took him seriously when he wanted to organize the
Jamaican bobsled team to compete in the Calgary
Olympics. Remarkably, the Jamaicans proceeded to beat 10
other teams, as immortalized in the Disney movie, Cool
Runnings. No one thought Fitch had a chance either
to displace the heir apparent in a run for mayor of
Warrenton, yet he not only went on to win, but he made
good on promises to slash spending, stimulate economic
growth and reduce taxes.
In
a field with four declared gubernatorial candidates,
Fitch stands out as the only one who is passionately
dedicated to cutting spending and rolling back taxes.
Lt. Gov. Timothy Kaine, a Democrat, supported last
year’s tax hikes, as did Russ Potts, who is running as
an “independent Republican.” Kilgore has made
anti-tax noises but impressed no one either with his
depth of conviction or the rigor of his budgetary
analysis.
Taxes are very much on the mind of the Republican rank
and file that Fitch must persuade to vote for him in the
primary this summer. GOP activists are acutely aware
that the political class, crying poverty, boosted taxes
by roughly $1.5 billion in the current biennium, only to
find the state on track now for an embarrassingly large,
$1.2 billion surplus. Despite
this fiscal fiasco, Sen. Finance Chair John “Tax ‘em
High” Chichester has made it clear that the current
round of tax hikes is only a down payment on a
longer-term solution – more taxes next year -- to
Virginia’s transportation “crisis.” Meanwhile,
many suburban homeowners in GOP strongholds have seen
their property values – and property taxes – rise
steadily over the past several years. Fitch is betting that
they may not share the political pundits' assessment that they are insufficiently taxed.
“Who
would you rather have running your government – a
businessman or a lawyer?” Fitch asked in an interview
last week, testing out his political sales pitch. “Who
would you trust with your money? Somebody that’s
already demonstrated spending reform and who’s running
a government as a business? Or a lawyer? If you want to
continue the business-as-usual approach, Jerry Kilgore
is your guy. If you think we need to make some changes,
then hear my thoughts, hear my solutions.”
In
Fitch’s view, Virginia
is
not under-taxed – it’s poorly run. The Wilder
Commission, appointed by Gov. Mark R. Warner during the
recession, identified an estimated $1 billion a year in
spending cuts. So far, only 15 percent of the
Commission’s recommendations have been enacted. Fitch
would make it a priority to adopt the best thinking he
could find – whether from the Wilder Commission, the
Commonwealth Competition Council, the Reason Foundation,
wherever – to outsource,
to streamline, to close programs that don’t deliver
results. He thinks that $2.3 billion could be squeezed
out of the state budget.
As
for transportation, Fitch refuses to be stampeded into
the view that there’s a congestion crisis that
requires the expenditures of an additional $100 billion
or more over the next 20 years. Traffic congestion is
largely the result of haphazard, disconnected, leap-frog
development that forces suburbanites to drive more often
and to drive greater distances with every passing year.
The solution, he says, is to change the pattern of
development, not to raise taxes. Says Fitch: “You’ve got to do a better job of
coordinating land use and transportation planning.”
If
Virginians are tired of Business As Usual, Fitch should
be their man. Born of a missionary family in Canton,
China,
just before the Communist Revolution, he has quite
literally seen the world. His grandfather was put in
charge of the city of Nanking just
before its fall to the Japanese and subsequent
brutalization known to history as “the rape of Nanking.”
Fitch’s father served with Claire Chennault’s Flying
Tigers
and operated behind Japanese lines. Fitch grew up after
World War II, mainly in India, Malaysia
and Singapore. He
studied two years at the University
of Singapore
before moving to the U.S.,
where he graduated with a B.A. in economics from the University
of Wooster, in Ohio, and
an MBA in international business from George
Washington
University.
After a
brief stint with a Canadian mining
company, Fitch signed up to work for the U.S. Commerce
Department. A scuba diver, he volunteered for a job as a commercial
attaché in the Central American country of
Belize--which
just happened to have the second-largest barrier reef in
the world--and then moved on to work on the Reagan
administration’s
Caribbean
Basin
initiative. Later, he was stationed in Kingston,
Jamaica,
to set up a office to develop U.S.-Jamaica business
relationships. Then it was off to Paris,
although he lasted only a year amongst the French.
Fitch quit government service to pursue an
improbable dream--“a flight of fancy”, he calls it--to help the
Jamaicans develop a competitive Olympic bobsled team. He
knew the Jamaicans could never field a serious ice
hockey team or figure skating squad, but he figured they
could make a go at bobsledding. “Half the race
is getting off to a fast start,” he explains. The
Jamaicans had plenty of talented athletes who could do
that. Approaching an official with the Jamaican local
defense forces, he recruited some of the best athletes in the
Jamaican military. Unable to find sponsors, he
bankrolled the team himself…. At one point he was
reduced to raising money by selling Jamaican Bobsled
Team t-shirts in Calgary
bars and nightclubs. But Fitch and the Jamaicans
prevailed, and the rest is history. (Just don't take Cool Runnings as the literal truth.) The
underdog Jamaican bobsledders became the crowd favorite
at the Calgary Olympics. Although they did not win a
medal, they earned the world's respect. Fitch stayed with the
team for another two Olympics before moving on to
pursue
other interests.
Making a living as an international trade
consultant, Fitch settled in Virginia
and found himself drawn to politics. Always a fiscal
conservative, he set up an organization called the
Fauquier Taxpayers Alliance to act as a watch dog over
local government spending. In one especially heated
exchange, the mayor of Warrenton challenged Fitch, if he
was so darn smart, why didn’t he run for mayor?
The gauntlet was thrown. Fitch
did run, campaigning against the mayor’s hand-picked
successor. Preaching fiscal austerity, he railed against
the town’s plan to spend $4 million on a new town hall
while, in his opinion, the old one was perfectly good.
Fitch won the campaign and set about fulfilling his
promises. Over the past six years, he has worked
relentlessly to cut spending. The town’s workforce is
10 percent smaller than it was before he arrived. In an imaginative economic development
effort, inspired by his wife Patricia, he catalyzed heritage tourism
business around construction of a John
Singleton Mosby museum. The combination of
cutting taxes, broadening the tax base and rising
property values allowed him
to slash the real estate levy by 80 percent, making
Warrenton's rate among the lowest of any town, city or
county in the state.
(For details on Fitch’s track
record in Warrenton, see “The
Warrenton Miracle,” by Philip Rodokanakis, Nov. 29, 2004.)
Based on his experience in Warrenton, Fitch has
learned some profound lessons on what it takes to create
economic prosperity. Instead of chasing large
corporations that demand big incentive packages, he
focused on attracting small, entrepreneurial companies.
By offering a combination of low taxes, attractive
communities to live in, and a quality workforce, he
says, Virginia
can attract entrepreneurs who will start fast-growing
businesses and stay committed to the community. “The
CEO or owner will decide to locate here because it’s a
good place to raise a family.”
The
Virginia governor’s first priority, says Fitch, should
be to get control of state spending. “The first thing
you do is implement wholesale spending reform.” Apply
outcomes-based, performance-based measures to government
programs -- make sure the programs are doing what they’re supposed
to do. “Scrutinize every single service. If they
don’t meet up [with their goals], we’re going to
change them.” Outsource to the private sector.
Eliminate redundancy. Consolidate duplicate functions.
Or shut them down.
By
way of specifics, Fitch points to the treatment of the
mentally ill. The state pays $100,000 a year to treat a
mentally ill patient in an institutional setting. By
moving patients to local community centers, the state
can cut costs down to $30,000 – and improve the
quality of care.
Fitch
argues that Virginia
needs a Taxpayer Bill of Rights (TABOR), like the one in
Colorado,
which would cap increases in state spending to a set
amount such as population growth plus the cost of
living. By keeping taxes low, a TABOR would stimulate
the growth of local businesses and encourage outside businesses to invest in Virginia. “Colorado
is doing fine with TABOR,” says Fitch. “They’ve
got a very healthy economy.”
Fitch has a transportation policy, too, and it
doesn’t involve cranking up taxes to build more roads.
“You have to stop the bleeding caused by mismanaged
growth,” Fitch says. The state simply can’t afford
to widen roads to serve every subdivision that pops up
in the countryside. The Virginia Department of
Transportation (VDOT) doesn’t have enough money--
and will never have enough money, no matter how much the
gas tax is raised – to correct the problems of
atrocious planning.
Fitch points to a massive botch job about 10 miles
from Warrenton, where U.S. 29 intersects with Interstate
66 in Gainesville.
Local government officials approved large-scale
residential development in the area, unconnected to any
local employment base or retail amenities,
that virtually forced people onto the two arterials to
reach destinations miles away. “The traffic has become
a nightmare,” he says, and VDOT can’t fix it because
VDOT is tapped out. It is imperative that Virginia
does a better
job of coordinating
transportation and land use planning.
While land use reform stands at the top of Fitch's
list of transportation reforms, he suggests a number of other strategies. Thirty
percent of traffic congestion, he observes, is caused by
road maintenance that closes off lanes and forces
motorists to merge. “Do
what they do in
Europe
– lay down 22 inches of macadam instead of eight
inches.” If the state were willing to absorb higher up-front capital costs, he says, roads would last
much longer and road crews would spend less time on
maintenance work that disrupts traffic flows.
Another idea would be to build what Fitch calls
“shadow” toll roads. Private developers who build
roads into new areas could recoup their costs by
charging the local government a usage fee based on the
level of traffic on the road. The locality, in turn,
would pass on its expenses by charging home buyers a
transportation impact fee. By providing a rational basis
for imposing the impact fees, such a system would prove
more tolerable than the imposition of fees based
on arbitrary, political criteria.
Fitch also stresses the need for education reform.
Pumping more money into a broken system will not
improve the performance of Virginia’s
schools, he says. “The goal never changes, which is to
provide the best education for the student. Everybody
agrees on that. But we can do it in a much more cost
effective way.”
According to Fitch, only one third of every dollar
spent on education is spent in the classroom. Between 64
percent to 67 percent goes to overhead – up from about
42 percent some two to three decades ago. Do
Virginia
schools, he asks, really need an assistant principal for
each grade? "The schools say they don’t have
enough money for textbooks. I say, well, adjust your
priorities.”
The problem is the Virginia Education Association,
Fitch says, which functions as a teachers union. “The
VEA is not willing to budget, and nobody is forcing them
to budget. We have to bring them into a room, sit around
a table and say, ‘We can’t continue just giving you
more and more money because you say you need more
deputies.’” The VEA’s grip on
Virginia
education must be broken, Fitch insists. If localities
can save 32 percent by outsourcing non-instructional
services—as some studies indicate—then they need to
do it. If localities can save 25 percent by outsourcing
remedial education to Sylvan Learning Centers, they
should be allowed to do it.
Fitch estimates that, after adjusting for capital
expenditures and other overhead, it costs Virginia
localities on average about $2,800 per year to send a
student to public school. In theory, it should be worth
up to $2,800 to the state to induce parents to educate a
child privately. By giving taxpayers a state income tax
credit up to $2,800, he argues, the state could make it
affordable for many parents to send their children to
private school, or possibly to home school them -- and
save money.
What’s refreshing about Fitch is that he doesn’t
pretend to have the answer for everything. I asked him
how he would address the rapidly escalating cost of
Medicaid. He’s a big believer in private health care
accounts that eliminate the need for HMOs and other
intermediaries that run up costs, but he hasn’t
figured out what the state can do. “I’ve got people
working on it,” he says.
Another inspiring trait about Fitch is that he
doesn’t feel the normal partisan urge to disparage the
accomplishments of someone just because he belongs to
the other party. He praises Gov. Warner, for instance,
for some of the initiatives he’s undertaken to improve
the efficiency of state government.
Fitch won’t even dis' his opponent, Jerry Kilgore.
“I’m concentrating on my campaign and ignoring the
conventional playbook, which is to slam your
opponent," he says. "Jerry Kilgore seems to be
a pleasant, sociable guy. I believe I’m offering
something very different. That’s the distinction I’m
asking people to make.”
--
February 28, 2005
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