One problem with an economic boom is that tax receipts generally rise and give governments an excuse to indulge in wild new spending programs that cannot be sustained when the boom ends. That, apparently, is now the situation facing Northern Virginia:

Local governments across the region are considering cutting spending or raising taxes in the coming year because of a decline in revenue growth caused by the housing downturn…

The difficulty in Northern Virginia is that after six years of double-digit increases in home values, officials are predicting little or no growth for the coming year. Tax revenue could creep slightly upward, but the increases are nowhere near the whopping totals of recent years, officials said.

Local governments in Virginia by law cannot run budget deficits, so to balance their budgets for the fiscal year that begins July 1, officials must make up millions of dollars in shortfalls by cutting spending or raising taxes.

The answer then is rather obvious — cut spending. Unfortunately, politicians running the governments usually pull out the “for the children” mantra. Having spent like drunken sailors on a shore leave during the boom years, now the school walls will crumble, the poor children will go hungry, books will be burnt to keep libraries warm unless the tax payers fork over more money. We all heard the sob stories.

Arlington officials want to cover the shortfall without raising the property tax rate, according to Mark Schwartz, the county’s director of management and finance. “We will not present a budget that says: ‘Here’s a gap. Let’s increase taxes to fill it,’ ” Schwartz said. [Snip]

Vice Mayor (of Alexandria) Andrew H. Macdonald (D) said of bridging the shortfall, “we can do that either by finding some more efficient way in making cuts or find a new source of revenue by slightly raising the tax rate. . . . My view is that we may have to change the tax rate slightly.” [Bold face mine.]

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As I often repeat, Northern Virginia has experienced a tremendous demographic growth, particularly in the outer suburbs and the exurbs. An accompanying trend has been an increase of non-white residents in the area. Loudoun County, where I now live, is a prime example (many of my neighbors are ethnically South Asian or East Asian). Since non-whites tend to trend Democrat in voting, this has raised a concern among some Republicans that the region will increasingly vote Democrat.

However, the latest report from the Census Bureau that ethnic minorities have relatively high home ownership rates in metropolitan Washington area, including Northern Virginia, ought to give them a ray of hope:

Particularly striking was the growing number of Hispanics who bought homes in the Washington area from 2000 to 2005, many of them settling in expensive suburbs such as Fairfax and Montgomery. Across the region, Hispanics surpassed blacks in homeownership rates last year. [Snip]

Almost 100,000 Asians own houses, condominiums and townhouses locally, triple the number in 1990. Homeownership among Asians increased about 71 percent regionwide between 2000 and 2005. Asians posted particularly high rates in Loudoun County, where about 96 percent owned their homes last year. That’s far above Asians’ national rate of 59 percent.

Farhan Syed, a real estate broker in Loudoun, knows this phenomenon well. “Most Asians happen to be dual-income families, well-educated, able to afford a home,” he said. “Everyone wants the American dream.”

While home ownership does not guarantee voting Republican, increased home ownership correlates well with more Republican voting. Those who own homes are more likely to be married, have children and vote Republican than those who do not (see the last two pages of this study). In fact, the trend is even stronger at higher home value ranges.

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(***Scroll down to an important Loudoun County meeting on the “Hallowed Ground” scheme next Tuesday.)

The “culture of governmentalism” can beguile even long-time Republican House and Senate incumbents, and certainly their unwary staffs.

Such appears to be the case with H.R. 5195, “Journey Through Hallowed Ground National Heritage Area Act of 2006,” whose principal House sponsor is Frank Wolf of Virginia, and its Senate counterpart, S.2645, sponsored by George Allen.

In prepared testimony this morning before a House of Representatives panel, Peyton Knight of the National Center for Public Policy Research declares:

“Worse than run-of-the-mill pork, which wastes federal tax dollars, this legislation would actually purchase preservationist special interest groups, many of which have histories of anti-property rights activism, and encourage them to urge State and local lawmakers to restrict land use, modify zoning and even acquire private property or interests in private property.” [Emphasis added.]

Knight, the director of environmental and regulatory affairs at the National Center, explains:

“Specifically, H.R. 5195 would create a 175-mile long federal corridor, the boundaries of which encompass portions of Virginia, Maryland, West Virginia and Pennsylvania. It would assign a ‘management entity’ consisting of the Journey Through Hallowed Ground (JTHG) Partnership (an umbrella group of preservation activists and lobbyists who stand to directly benefit from the bill’s passage) and the Interior Department to oversee development and land use in the area.”

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With the explosive growth in the region, particularly in home building, this kind of situation was bound to happen:

Cathleen and Blair Titcomb contracted with G&M Homes to build a house in western Loudoun County last year, thinking they had found the perfect place to live. Their new dream home would have four bedrooms, a spacious kitchen, a three-car garage and plenty of wide-open country for the kids they planned to have to run around on. [Snip] 

 

G&M Homes never finished the house, and the Titcombs, along with several other homeowners who contracted with the company, say they soon learned that Grimm couldn’t deliver what he promised. Now, the Loudoun County Sheriff’s Office is investigating allegations that Grimm, 62, defrauded several subcontractors and did not complete work on nearly a dozen homes, sheriff’s spokesman Kraig Troxell said.