By Madeline Otten
Correspondent
On August 21, President of Free Enterprise Forum Neil Williamson published his report on the Local Government Spending Index (LGSI). The LGSI uses locality’s self-reported spending and verified population data to generate an inflation-adjusted index comparing per capita expenditures. Free Enterprise Forum is a privately funded public policy organization in Charlottesville that studies government spending in central Virginia.
This study compares surrounding counties in the central Virginia area over a 20-year span: 1998 – 2018. The report states that the analysis seeks to develop and track over time an objective metric to capture the spending trend in each locality and determine if this trend can be correlated to other trends occurring within the locality.
So why does this affect Fluvanna County?
Fluvanna County was one of the six localities for this study, along with Albemarle, Green, Louisa, Nelson Counties, and the City of Charlottesville. During the time of the study, Fluvanna County was the second fastest growing locality at 43.51 percent, just behind Louisa County at 46.43 percent. In addition to population, Fluvanna’s school enrollment increased over 24%, making Fluvanna ranking in first in terms of school enrollment growth.
“This demographic phenomenon may be related to the type of residents each locality is attracting,” Williamson noted in the report.
On the other hand, Fluvanna’s rate of increase in inflation-adjusted per capita between 1998 and 2018 was 126.67 percent. The Merriam Webster dictionary defines inflation as “a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services.”
At the start of the research in 1998 the county’s inflation-adjusted per capita spending was $1,911.98. In 2018 it was $2,421.97 resulting as the lowest of any of the areas studied. The county’s per capita spending was behind the other localities in the region during the 20-year study. In addition to lagging the other areas, Fluvanna also experienced the highest rate of growth in inflation adjusted spending in the region at 81.78 percent.
“The rapid population growth, which is often blamed for increased operating spending, mitigates some of this spending increase on the LGSI calculations, with the result being that Fluvanna County was in the middle of the pack with the third-highest LGSI (125.18) in 2018 in the region,” the report stated.
Fluvanna’s highest LGSI was in 2015, along with Louisa County. Albemarle, Greene, and the City of Charlottesville hit their largest LGSI in 2009. But the City of Charlottesville is still at top spending more per capita than its surrounding localities.
“What I think is happening is, as the counties urbanize, they’re starting to pick up some of those costs that Charlottesville has been carrying all this time,” Williamson said. “Not all of them, but some of them, and that’s why you’re seeing some of those blips coming through when you look at Fluvanna and Nelson, to a lesser extent.”
According to his report, the LGSI is modeled after the economic methodology used to calculate the Consumer Price Index. The Consumer Price Index is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Williamson hopes that his report will help those gain interest in their local government activity and promote discussion regarding the financial impacts of government choices and decisions.
