The pages of this newspaper have included an abundance of articles and commentary on a decidedly esoteric topic: budgets. Five months into the federal fiscal year (which began last Oct. 1), the nation is still operating without a comprehensive 2011 budget.
In Wisconsin and other states, the wrangling over budgetary matters reached a fever pitch, while here in Virginia, the governor and General Assembly approved a two-year state budget with relatively little drama.
Budget processes offer lessons in economics. The fiscal situation in which the federal government and most states and cities find themselves is largely the byproduct of a recessionary economy — more specifically, a significant decline in tax revenue. As a result, legislators at all levels of government are making difficult choices about what to cut and by how much.
There are other options — options we can take that help build revenue.
Attracting new employers is first among them and, in Fairfax County, we are proud of our record of recruiting major corporations to the county and Virginia. Over the past few years, such companies as Volkswagen Group of America, Hilton Worldwide, SAIC, CSC and, most recently, Northrop Grumman have taken up residence in Fairfax. These businesses, along with a vibrant and growing collection of startup firms, contribute significantly to our tax base.
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Such business-generated revenues accomplish two things. First, they help to moderate the need to make deep cuts in county services. Second, they reduce the pressure to find revenues by raising the tax rates. This benefits not only Fairfax County; actually, and this is the real point, it is good for Virginia — all of Virginia.
The success Fairfax County has had in attracting new business has a commensurate benefit for the entire commonwealth. In effect, when Fairfax County succeeds, Virginia succeeds. Virginians tend to identify themselves in a regional context — i.e., Northern Virginia, Hampton Roads, central Virginia and the Valley — but we all contribute to the common wealth, the greater good.
It's important to recognize the critical role that Fairfax County plays in helping all of Virginia sustain budgets and public services. It's worth noting that Fairfax County residents contribute a considerable slice to the state's fiscal pie.
Almost one in four income-tax dollars generated in the commonwealth comes from Fairfax County. Fold in the rest of Northern Virginia, and the proportion rises to 43 percent. That means that almost half of the entire state's income tax revenue — and all that it pays for — is paid by Virginians who happen to live north of the Rappahannock.
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That every Virginian understand this dynamic is less important than having a broad recognition of the vital nature of economic development.
The commonwealth has consistently been ranked among the top one or two states for business throughout the country, and the pro-business climate that we have enjoyed in Fairfax is a consequence of consistent and aggressive policies and programs that have been in place for decades — in Fairfax County and at the state level.
Economic development is not a panacea that will obviate difficult budget decisions. We have had our share and will continue to face new ones in the years ahead. But as we watch other states struggle under the weight of shrinking revenues, we would be well served to heed the lessons that our own history has taught — that fostering a climate where businesses can grow and thrive is the single largest factor in sustaining the level of services and the quality of life that Virginians from every part of the state now enjoy.
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