LGSI Released Finds Disparity in Local Government Spending

By. Neil Williamson, President

As political candidates are vying for election and local governments are starting their FY2016 budget process, our new study shows that the rate of increases in local government spending vary dramatically.

The “Choices and Decisions” report, conducted by the Free Enterprise Forum, is based on an independent locality-specific local cost of government spending index (LGSI). The report, which studied fiscal years 1990-2014, identified Albemarle County as the locality with the greatest increase in LGSI.

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 elections and budget season. clip_image002

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.

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 130% during the study period while population and school enrollment increased by 52% and 35% respectively. 2015 Albemarle Indicators

City of CharlottesvilleDuring the study period (1990-2014), Charlottesville experienced a population increase of just 18%, the second smallest of the municipalities being studied. In addition, Charlottesville experienced a cumulative decline in school enrollment  (-2%).

In contrast, inflation-adjusted operating expenditures increased at 62% during the study period. The LGSI in Charlottesville was 133.28 in 2014 markedly below its 2009 apex.

2015 Charlottesville Indicators

For other localities (Fluvanna, Greene, Louisa and Nelsonclip_image004) see the Choices and Decision Report.

In FY2014 per capita spending is as follows (in 2014$):

Charlottesville $ 4,119.32

Albemarle – $ 2,867.31

Nelson – $ 2,637.11

Louisa – $ 2,537.49

Greene – $ 2,419.63

Fluvanna – $ 2,201.50

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, Albemarle had the greatest increase inflation adjusted operating spending per capita at 51.33%, the balance of the localities increased less than 50%. Greene County (28.81%) had the lowest increase.

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

Respectfully Submitted,

Neil Williamson, President

20070731williamson

Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

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