2013 Local Government Spending Index Released

Study Finds Disparity in Local Government Spending

 

Charlottesville, VA – As political candidates are vying for election and local governments are starting their FY2015 budget process, a new study shows that the rate of increases in local government spending vary dramatically.    The third iteration of the “Choices and Decisions” report, conducted by the Free Enterprise Forum, developed a locality-specific local cost of government spending index (LGSI).  The report, which studied fiscal years 1990-2012, identified the City of Charlottesville as the locality with the greatest increase in LGSI.

Neil Williamson

Neil Williamson

Free Enterprise Forum President Neil Williamson said, “The goal of the LGSI is to inform and promote dialog.  The comparison of local spending trends, combined with population data provides citizens an objective tool to evaluate spending decisions.  Equipped with this data, citizens can ask better questions of elected officials during the budget season”.

The LGSI is based on self reported data required to be provided to the Commonwealth of Virginia’s Auditor of Public Accounts.  The numbers focus exclusively on the operating budget of each municipality. This number will not include capital expenditures thus avoiding having single-year spikes in capital spending skew the results or interpretation of the data.

 2013 FINAL Combined Chart

It has been theorized that inflation adjusted spending would largely track changes in population and school enrollment.  While a correlation was found in some localities studied, this trend was not universal:

Albemarle County – adjusted for inflation, Albemarle County’s total spending increased by over 129% during the study period while population and school enrollment increased by 49% and 30.75% respectively.

City of Charlottesville – During the study period (1990-2012), Charlottesville experienced an average annual rate of population increase of just 11.36%, the smallest of the municipalities being studied. In addition, Charlottesville experienced a cumulative decline in School enrollment (- 4.38%), by far the largest decline in the study group in school enrollment (Nelson -1.29%).

In contrast, inflation-adjusted operating expenditures increased at 79.37% during the study period.  The LGSI in Charlottesville was 176.31 in 2009, but had declined the following two years.  In FY2012, Charlottesville’s LGSI had increased by 5 points to 156.41 still markedly below its 2009 apex.

In FY2012 per capita spending is as follows (in 2012$):

In FY2012 per capita spending was as follows (in 2012$):

Albemarle – $2,837.55

Charlottesvlle – $4,689.66

Fluvanna – $2,129.75

Greene – $2,487.05

Louisa – $2,442.55

Nelson – $2,33.35

It was also theorized that growth in inflation-adjusted per capita spending among the localities would be similar because of the high percentage of programs mandated by the state and operated by the localities.  In contrast, the analysis clearly indicates wide variation in per-capita spending decisions made by the localities.  During the study period, Charlottesville had the greatest increase spending per capita at 61.07%, Albemarle increased 54.24%, the balance of the localities increased less than 50%.  Nelson County (29.8%) had the lowest increase.

It was also anticipated that school enrollment growth would track population growth. While it does [with 2 exceptions] in every instance the percentage growth in school enrollment was smaller than the growth in population.  The Free Enterprise Forum is a privately funded public policy organization dedicated to individual economic freedom.  The entire report, and supporting documentation, can be accessed under Reports Tab at www.freeenterpriseforum.org

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