Governor's transportation plan filled with pot holes

Governor Bob McDonnell has put out his plan for transportation funding and, as was true with his earlier privatization plans for ABC stores, it looks like it was designed by a drunk dodging pot holes on I-81. The plan eliminates Virginia's 17.5¢ gas tax and "replaces" it by jacking the state sales tax up from 5¢ to 5.8¢. Among other provisions - vehicle registration fees would go up and alternate fuel vehicles would be subject to a tax of $100 per year.

On the smoke and mirrors side of Bob's ledger, the plan anticipates $1 billion in revenues from an Internet sales tax that is anticipated in legislation pending in Congress. That's all well and good except (1) Congress hasn't shown a great propensity to pass legislation and who knows how this will proceed; (2) these funds, assuming Congress acts, will be there irregardless of how the Commonwealth funds transportation; and (3) using all these funds for roads will deprive schools, mental health, public safety, and other programs of the General Fund of their fair share.

One question for which I haven't seen the answer - if the gas tax is eliminated, will gas be subject to the new 5.8% sales tax just like any other good? If so and assuming $3.50 per gallon, the tax would be 20.3¢ and index the tax to gas price - probably a good way to address funding.  Depending on how this is answered might negate some of the questions below while raising others.

So, let's look at a few of the potholes in the governor's concrete cracking idea:

• Would out of state motorists stopping for fuel get a free ride on Virginia's roads?
• Why hit alternative fuel vehicles with a $100 annual tax if the gas tax is eliminated? This annual tax may make some sense if the gas tax is retained but under the governor's proposal it unfairly punishes owners of alternative fuel vehicles.
• Virginia's gas tax is already lower than the taxes in surrounding states.
• If the gas tax is eliminated, will the tax for diesel used by passenger cars like the popular Jetta TDI also be eliminated?
• The gas tax is a "user fee" for folks utilizing public highways. Eliminating the gas tax shifts it away from drivers to non-drivers and those who drive less and are efficient in their use of the roads.
• The plan sounds like it will generate lots of new money (assuming the Internet sales tax goes through) but according to many analysts it still falls $1 billion short of what is really needed to upgrade roads in NOVA, Hampton Roads, and other congested highways like I-81.

Some have said Governor McDonnell has put out a bold plan that is "outside the box." Yeah, maybe. His plan may contain a few good ideas. But, beware of the potholes.

Prestigious colleges do it... should the Commonwealth follow suit?

It seems everything is for sale in the U.S.A. Seeing a chance to make $2,000 Dixie State College of Utah is doing it. So is the University of Colorado. Even Harvard Law School does it. And what is the it they are all cashing in on? Selling naming rights to bathrooms and even to individual stalls... hope they have the best toilet paper available.

So, I guess it should come as no surprise that the General Assembly is following the selling naming rights idea as a way to raise (according to the Governor's Office) up to $100 million a year. After Lt. Governor Bolling cast a tie-breaking vote, a bill to sell naming rights to highways, bridges, and tunnels is heading to the governor's desk.

Many Virginia highways are currently named for people and events celebrating Virginia's rich history. Bridges are named for fallen police officers and military heroes who gave their all for the safety of our communities. This practice lends dignity to the Commonwealth. It might even teach a little history - more than once I've Googled a name I read on a highway sign.

GEICO Squealing Pig Memorial Bridge?

Something stinks about both of these money-making ideas. The "Highest Bidder" bridge just seems... well... demeaning and wrong. I hope the governor will reject this idea.

How about pay as we GO?

So Governor Bob McDonnell wants to help pay for transportation in NOVA and Hampton Roads by taking General Fund monies from K-12, from public safety (state troopers are already understaffed; ditto for police/deputies in some localities), and from public health. I guess that reflects his priorities - get a transportation merit badge by any means. Beg, borrow, steal?

Transportation should be paid by the users thereof... including those out-of-staters rambling through the commonwealth on I-95 and I-81. Tolls? Maybe. Raising the gas tax? Seems like a user fee is a fair way to go. Raising license fees for those big trucks that put such demands on our road and bridges? Yeah, they should fully pay their way? And while we are at it, shouldn't electric cars have to pay for the roads, too? Maybe we need to rethink the gas tax and move to a taxation per mile plan- that would certainly face potholes in the political road!

Question is... why is the chicken paying for roads by being the fox in the hen house of K-12, of public safety, and of other core state services?

It is a good deal... let me find the credit card

Governor Bob McDonnell wants to take advantage of low construction costs brought on by the slow economy to jump start road building in the Commonwealth. His transportation plan calls for spending about $4 billion over three years to ease congestion and, as a side benefit, to create much needed jobs. Laudable goals. Road construction has languished in the Commonwealth while congestion has gotten worse. Folks in road building could certainly use the work. With costs, both highway construction and interest rates, at near historic lows now could be the time to get more miles for the dollar.

But... there's always a "but" isn't there... make no mistake about it, the Commonwealth will have to go deeper into hock to pay for the roads. Unfortunately the governor's plan fails to address just how we'd pay back those loans. Delegate Ward Armstrong (D-Henry Co.), House minority leader and a potential gubernatorial candidate, issued a press release saying of the plan,

This is just the latest in a long line of irresponsible and half-baked ideas that fail to address our core problem of generating a long-term sustainable source of funding for our transportation needs...

So where would Governor McDonnell find the dollars? He says some of the money would come from saving and unspent funds of over $1 billion "discovered" in a recent VDOT audit. So, that really doesn't represent much new spending, but rather money that is already in the pipeline for maintenance and other projects. The governor's plan anticipates $700 million from as yet unrealized future surpluses and from privatization of state ABC stores. Perhaps this is his way of pressuring the General Assembly into moving ahead on his plan to sell the liquor business, but legislators are far from being sold on deal, especially in light of a recent report of the Joint Legislative Audit and Review Commission questioning administration numbers. According to JLARC, the "profits" would be closer to $300 than the $500 million the governor projected. Plus, while it would be upfront money that could be used for current transportation, the sale would mean a loss of state revenue each and every year in the future.

Beyond that, the governor plans to borrow $2.9 billion in a mix of state-backed and federal-backed bonds. The $1.1 billion federal-backed bonds, it appears, are repaid from future federal transportation grants-in-aid to the Commonwealth. So, we'd have future loss of revenue from the sale of ABC stores, loss of some future federal transportation aid, and future interest payment to service the increased debt. And the Commonwealth already has obligations to repay money to VRS and for other bonds that helped balance previous budgets.

It is irresponsible to spend money without clear plans and a reliable revenue stream for repayment of the debt to be incurred. Future governors and legislators will be forced to choose between core services such as schools and public safety or raise taxes. As Delegate Armstrong noted,

When you don’t pay now, someone has to pay later. Unfortunately the Governor’s lack of leadership on transportation has resulted in a plan that amounts to a back door tax increase on our children.

Perhaps now is the time for the Commonwealth to revamp its gas tax. Start a process of small periodic increases in the current 17.5¢ per gallon state gas tax to raise it to a level consistent with inflation. That rate was set in 1985 and its buying power is closer to 8¢. But, the governor seems dead set against that - he'll just max out another credit card.

Virginia Budget - A Train Wreck About to Happen

In the current issue of The Virginia News Letter, James J. Regimbald Jr. warns that the worst of Virginia's budget woes will occur in the 2010-12 biennium and that "painful changes to state government and policy are forthcoming." That seems to fly in the face of what we're hearing in the national media - the recession is easing, the big financial institutions are doing well, brighter days are ahead.

Regimbald doesn't dispute those rosy forecasts, but he points out that Virginia's reserves are essentially gone, deferred obligations will come due, and (most importantly) federal stimulus funds that helped keep the state, local governments, and public schools afloat will run out. He, like most economists, expects job creation to lag the recovery - unemployment will continue to be paid while tax receipts remain low.

Regimbald concludes in Virginia's State Budget - A Train Wreck About to Happen:

What are our options? First, do everything possible to encourage job creation in Virginia by prioritizing Virginia’s investments in education and improvements to our infrastructure. A healthy economy is the only long-term answer to a healthy public sector. Next, Virginia’s government is going to continue to get smaller and even core programs are going to be reduced further. Finally, determine whether Virginia’s tax structure and rates are adequate to sustain a high quality public education, public safety, health and welfare, and transportation system that Virginians have come to expect. This debate may result in the roll back of tax relief that has been provided over the last decade.

If you look carefully at the words and plans of the gubernatorial candidates, you will find one, Creigh Deeds, willing to honestly discuss the looming train wreck with voters while the other, Bob McDonnell continues playing dodgeball on transportation while engaging in smoke and mirrors budgeting. As the Washington Post points out:

And rather than leveling with Virginians about the cost of his approach, as Mr. Deeds has done, Mr. McDonnell lacks the political spine to say what programs he would attempt to gut, or even reshape, in order to deal with transportation needs.

It all comes down to trust. McDonnell has run a slick campaign to re-image himself. If he wins, which Bob McDonnell will show up? How would he deal with the train wreck? Because of his mixed signals and double talk, Virginia voters don't really know. We know Creigh Deeds. He talks straight. What you see is what you get. We can trust Creigh Deeds. More insights from the WaPo:

[Creigh Deeds'] record in the legislature ably blended the conservative interests of his constituents with an agenda reflecting the prosperous, politically moderate face of modern-day Virginia. He has been a longtime champion of a more enlightened, bipartisan system of drawing voting districts, a stance to which Mr. McDonnell only recently gravitated. He has played a constructive role in economic development by shaping the Governor's Economic Opportunity Fund, which provides incentives for investors in Virginia, and he has stood for responsible environmental policies, including green jobs and alternative energy research. Despite his rural roots, Mr. Deeds has been ideologically flexible....

The Big Number

Senator Creigh Deeds stopped by Jess' Lunch in downtown Harrisonburg on Saturday to promote his campaign for governor, talk transportation, and (I hope) enjoy a couple of the famous dogs. While other issues were on the agenda, Deeds talked transportation. Local media has been hyping up the possible rest area closures and some politicians are playing the Happy Meal fix - leasing rest area rights to private companies. While that may help keep rest areas open, Deeds knows a far more comprehensive solution is needed if Virginia is to build and maintain the kind of transportation system our future economy demands.

The DNR article mentioned Deeds is closely trailing this opponents in a recent poll. The really BIG number in the poll is the 46% undecided just two months from the primary. With Senator Deeds essentially taking January and February off during the session of the General Assembly, the amazing thing is that he is hanging right in there with Moran and McAuliffe. There seems to a little McAuliffe fatigue setting in while Deeds is enjoying a bit of a surge now that he's back on the stump.

The poll also showed Deeds as the favorite of 18-29 year old voters - many of whom were energized by the Obama campaign. His challenge will be getting them to the polls for a primary which usually has fairly low turnout. Low turnout means each of those new voters he can get to the polls carry even more weight.

The chicken and the pot hole

Every newspaper and state blog is blasting the failure of the General Assembly to find a compromise to fix Virginia's roads. Governor Kaine said it best: "It was like a 'Seinfeld' episode; I mean a show about nothing. In the House, it was a road session about nothing."

Delegate Steve Landes (R-Augusta) said the House of Delegates were called "delegates" because they are supposed to do what the people want. I guess that means the people want nothing done - perhaps so.

Sometimes problems have to get worse before they get better. Such is obviously the case with Virginia's pot holes. By any measure this is a political loss for the governor as well as the state. Guess we'll have to see how it plays out in the '09 elections when all 100 members of the House of Delegates stand for accountability before the voters. My guess is that some GOP delegates, especially from NOVA and Hampton Roads, will have some explaining to do. That's when the chicken will cross the road.

The stalemate on appointments probably works out as win for the governor. The legislature failed to make appointments to the Virginia Supreme Court, several circuit courts, and the State Corporation Commission. Governor Kaine will now make recess appointments that next year's session will have to confirm. Time will tell if House Republicans will kick out a judge who has already been seated.

For now, our political leaders have dropped the basket and broken all the eggs. Cluck.

Good eggs - good Deeds

Lost in the General Assembly gridlock over transportation are two bills by Senator Creigh Deeds (D-Bath) that passed the Senate and deserve to pass the House of Delegates. SB 6012 offers tax credits for businesses that provide flex schedules for employees. SB 6013 provides similar credits for businesses that encourage telecommuting. 

Deeds has announced his candidacy for governor and ideas like these illustrate creative approaches that help solve problems. But, will House Republicans want a Democratic gubernatorial candidate taking credit for this legislation? Or in their political calculus will they supports the Deeds' bills figuring Delegate Brian Moran (D-Fairfax) would be the more formidable statewide candidate?

At any rate, the tax credit approach will probably appeal to the anti-taxers in the House of Delegates. Maybe, just maybe, they'll leave partisan politics out of the equation and pass these bills on their merit.

Valley grist

No surprise that the House of Delegates Rules Committee, on a mostly party line 11-4 vote, killed Governor Kaine's transportation bill. The same committee did advance the the Senate bill increasing the gas tax to the floor where it will likely die by a party line vote. Playing politics, the GOP is hoping to back the Democrats into a politically difficult vote. Watch out Repubs, sometimes a cornered rooster fights back.

The General Assembly will recess for a couple weeks to cool off in the summer heat. Maybe when constituents get hold of them, the legislators will want to get back to the Capitol!

(Cartoon from The News Leader)

The Supreme Court ruling in the D.C. gun case is, of course, front page news in the Shenandoah Valley where hunting and gun ownership are taken for granted. It is a landmark case because, for the first time, the court has found (5-4) an individual right to keep and bear guns. But a close reading of the decision makes clear the justices were not endorsing an absolute right for anyone to own/possess any gun at any time or place. In the majority opinion, Justice Scalia wrote that the U.S. Constitution does not permit "the absolute prohibition of handguns held and used for self-defense in the home." In typical fashion, the court's decision is pretty narrow and left open the power of state and local governments to enact reasonable regulations such as gun-free school zones, registration, and laws about concealed weapons. We'll see future cases that will spell out the meaning of reasonable. With some of the least restrictive laws in the nation, the ruling will have little impact in Virginia. 

Augusta Republicans elected Bill Shirley chair during a Thursday night meeting. Not to dig through all that litter again, but you'll recall the dispute between the reactionary right wingers (the Kurt Michael/Scott Sayre faction) and the conservatives (Larry Roller/Emmett Hanger faction) that led to disputed meetings, appeals to the district and state committees and threats of law suits. Some say Shirley was a compromise candidate, but that hardly seems likely as only the reactionary right wing faction (44 of them) was seated at Thursday's meeting and their loudest cheerleader is crowing. Mr. Shirley is a nice guy whose style will be dramatically different from the abrasive Michael's leadership. But, he's pretty far to the right so the ideological bent of the local GOP will change little. Senator Hanger, how do you spell O U T C A S T in your own county committee? I do agree with Mr. Shirley's observation that the hen fight  in the Augusta GOP is "stranger than fiction."

One final kernel, the Staunton city manager will not recommend a 4-day workweek for city offices. Steve Owen said the estimated annual savings of $21,000 would not justify the change and would create hardships for citizens and some offices.

Scrambled Eggs With Cheese

Yesterday's post about fuel prices was apparently timely - in today's DNR there is "Schools Take On Rising Fuel Costs" detailing some of the actions that will likely help deal with soaring costs: turning off buses rather than idling in lines and delaying purchases of new buses (might be safety and economy foolish in the long run). It is smart to shut down rather than idle at a construction zone or delays longer than 30 seconds. An exchange student I met told me European motorists have for years shut down at stoplights and other long delays. High prices will likely force similar behavior changes among Americans. Heaven forbid we turn off the A/C.

Delegate Morgan Griffith (R-Salem) has joined a northern Virginia law firm in which his buddy David Albo (R-Fairfax) is a partner. No, he won't be making the long commute to NOVA to practice law, they'll open an office in Salem and take in an associate to free up time for Griffith's legislative work. Griffith is House majority leader and hopes to be speaker if the GOP can hold on to its dwindling majority. The firm does have a policy against lobbying the General Assembly - guess you don't have to lobby when you have roosters in the coop.

Yesterday a Republican member of the Rockingham County Board of Supervisors was on the news talking roads and sent a not-so-subtle shot across Griffith's and other Republican delegates' bows. He noted roads are issue #1 with local governments and issue #1 with his constituents and doing nothing will be remembered in November, 2009. Wonder if Griffith, Saxman, Landes, Lohr, Cline, and others heard his clucking? Or if they cared?

What will the General Assembly do with transportation? After a day of posturing and laying out their turf, today should see some fireworks (just in time for the 4th). House Republicans will kill the governor's bill - the only question is, will it go quietly in a hostile committee or be a wild shootout on the floor of the House? Senate Democrats rightfully killed bills about using royalties from off-shore drilling to pay for transportation. At best those bills are premature since the issue is before Congress and no royalties exist; at worst blatant political posturing. There are multiple fracture lines in the General Assembly - the Senate is controlled by Democrats, the House by anti-tax Republicans; most Democrats want a statewide funding solution, many Republicans favor regional funding (aren't we one commonwealth?); and the perennial split between urban and rural legislators over how funding will be directed.

The supervisor is right - Virginians will watch as our legislators run around like chickens with their heads chopped off. Might be time for a new flock in '09.

Chicken Salad or Chicken____?

On the eve of a special session of the General Assembly to deal with Virginia transportation needs, Delegate Chris Saxman proposes using royalties from offshore oil and gas to fund road maintenance and construction. Saxman is the master of smoke and mirrors. The maestro of something for nothing. To say this idea is "ahead of the game" is generous at best - there is no game.

The state's transportation needs are here and now. The General Assembly and governor need to find common ground for a revenue stream to meet today's needs. In yesterday's post, CCC supported a tax on gas and diesel as the most honest (falls directly on those using the roads) and fairest (would be paid by both in-state and out-of-state motorists and truckers).

The delegate's proposal has nothing to do with the present needs. A federal moratorium on off-shore drilling has been in place since the Reagan administration. There is no guarantee it will be reversed by Congress. If it is, there will follow years of legal and environmental preparation before the first drill is sunk. If marketable quantities of oil and natural gas are off the Virginia coast, it will be years after that before they are brought to market and any royalties are paid to the state.

So why make the proposal now? The rabid anti-tax delegate never lets sound policy making get in the way of his agenda. This is smoke to distract from the real work of the special session. It is also presidential and senatorial politics.

When problems demand solutions we hope our leaders will rise above smoke and politics. We hope.

This proposal, made now, is chicken ____.