Monday, February 01, 2010

The Leventhal Report: MoCo vs. Fairfax, Part One

Council Member George Leventhal asked the Montgomery County Office of Legislative Oversight (OLO) to produce a mammoth report comparing MoCo and Fairfax County on a very large number of measures. Leventhal has rendered a real service to MoCo because the data is necessary for further discussion of the always compelling topic of MoCo’s competition with Fairfax, to which we devoted a very long series last year. The eighty-page report is so gigantic that it cannot be readily consumed by most policy-makers, much less most county residents. But we intend to identify a few critical elements for our readers.

First, let’s discuss the findings of the report on taxes. Taxation rates are both a quality of life issue and a competitive issue for job creation. In terms of property taxes, Fairfax generally charges more than MoCo.

But that advantage for MoCo is probably overwhelmed by Fairfax’s low income tax rates. Virginia does not allow its counties to charge income taxes, while MoCo charges the state’s maximum allowable rate of 3.2% of income.

Fairfax also charges lower rates of land recordation and transfer taxes.

And Fairfax charges lower sales taxes on most items.

The data in the Leventhal Report illustrates conventional wisdom: Montgomery County and its state generally have higher taxation rates than Fairfax and its state. That will have a competitive impact. Tomorrow, we will compare government spending.