MCA Debates Economic Development

MCA Debates Economic Development

Gordon, Cuccinelli square off in community forum.

Should Fairfax County taxpayers subsidize economic development? That was the question that members of the McLean Citizens Association grappled with during a debate Thursday evening at the Alden Theater.

On one side, Gerry Gordon, president and chief executive officer of the Fairfax County Economic Development Authority (EDA), defended his agency, saying it was responsible for attracting hundreds of companies to the county, bringing with them jobs and tax revenue.

On the other side, state Sen. Ken Cuccinelli (R-37th) said there are better uses for tax dollars than economic development. A third panelist, Richard Etlin, a professor at the University of Maryland's School of Architecture and Planning, discussed land-use solutions for Tysons Corner.

The EDA, a county agency with an annual budget of roughly $6.5 million, is charged with promoting the county to business groups both in the United States and abroad. It was founded in 1976 when booming population growth and rapidly rising residential real estate taxes led the Board of Supervisors to try to attract businesses to ease the tax burden on homeowners, Gordon said. At the time, businesses made up 11 percent of the county's tax base. The board set a goal to raise that ratio to 25 percent, Gordon said. It hit 27 percent in the late 1980s and has gone down to 19 percent since then.

"[The Board] had to ask the question: With that many more people coming to the county and demanding more services, who is going to pay for it?" Gordon said. "They could use the business community to help offset those costs."

For every dollar they pay in taxes, county residents receive on average $1.60 in services, he added. By contrast, businesses receive only 35 to 40 cents in services for every tax dollar they pay.

Today, Gordon said, the county is in a similar situation as it was in 1976. With home values soaring and population exploding, "There will be incredible new demand for schools, for roads, for parks and all the things that constitute our quality of life."

The best way to pay for that, he said, is to attract businesses into the county's empty office space to help pay for services.

CUCCINELLI COUNTERED that the EDA's work duplicates the work of the Fairfax County Chamber of Commerce, a private group funded by dues that promotes Fairfax County as a place to do business.

Cuccinelli, an ardent anti-tax advocate, told the audience he was wearing his "Adam Smith tie" to symbolize his faith in the free-market system.

"The market lets businessmen and businesswomen know what the good places are to do business," he said.

The county's quality of life should be enough to attract businesses to the county, he added, making government investment in marketing the county unnecessary.

"I don't think this belongs in government. I don't think we should be paying for it," he said.

He noted that hoteliers in Fairfax County asked lawmakers last year to let them take over tourism promotion from the EDA and to charge their customers a special hotel tax to attract more tourists.

"They knew they could do a so much better job of it" than the EDA, Cuccinelli said. "In my own view, it should be done more like an association."

During the question-and-answer session, former Board chairman Jack Herrity said the county's economic policy is set by the Board of Supervisors, not by the EDA. That means that businesses will pay closer attention to the Board than to the EDA, he said. And if the Board's policies contradict the EDA campaigns, "You're wasting a hell of a lot of money."

Cuccinelli agreed, saying that the Board "will set a policy that the market will respond to with or without a marketing arm."

Gordon said that of the 21 jurisdictions in the Washington area, 20 had a publicly funded economic development arm. The one who doesn’t is Prince George's County, Md.

"And that's hardly an economic juggernaut," he added.