Conservation, smart-growth groups oppose McDonnell roads plan
A coalition of conservation and smart-growth groups are saying today that they oppose Gov. Bob McDonnell’s $4 billion transportation plan on financing and spending grounds.
“The plan is anything but conservative on two counts. It involves too much borrowing and debt reminiscent of what got our households and nation into trouble over the last decade, and it will not address the underlying origins of our traffic congestion,” said Stewart Schwartz, executive director of the Coalition for Smarter Growth.
McDonnell is pushing a plan largely based on borrowing through public bonds to jumpstart roads projects in the Commonwealth. Critics on the right and left have raised issue with the proposal to borrow against future federal gas-tax revenues that lies at the heart of the plan.
Roger Diedrich, the transportation chair of the Virginia Sierra Club, noted that Virginia has gone this route before, and that it took years for the Commonwealth to pay back the bonds.
“We shouldn’t repeat the mistakes of the past by borrowing and spending our future federal gas tax revenues,” Diedrich said.
Chris Miller, president of the Piedmont Environmental Council, is critical of the effort to begin a spate of new construction with the $3.5 billion backlog in structurally deficient bridges, deficient pavement, aging Metro and other transit systems.
“Many of these projects would reignite the land speculation that got us into trouble in the first place,” Miller said.
Edited by Chris Graham. Chris can be reached at freepress2@ntelos.net.
The AFP on WREL: Budget season
AFP editor Chris Graham talks news and politics with WREL’s “Online with Jim Bresnahan.”
Gov. Bob McDonnell got the 2011 Virginia General Assembly rolling with his State of the Commonwealth address Wednesday. McDonnell seems to be trying to put his imprint on this second legislative session as governor after an uneventful first year in office, according to Chris.
In other news, Chris talks about the continued growth in state revenues evidenced in the strong December numbers and what that means for the state economic situation.
McDonnell adds to roads plans
A key part of Gov. Bob McDonnell’s plan to get Virginia transportation moving would rededicate a portion of sales-tax revenues from the pot of money used to fund schools and public safety to roads projects in Northern Virginia and Hampton Roads.
McDonnell said today that he will back legislation to move about $140 million a year in sales-tax revenues generated in the two congested regions to go to roads projects in those areas. The governor also continued his push for the privatization of the state’s Alcohol Beverage Control system that he says will infuse $300 million into the new Virginia Transportation Infrastructure Bank. Earlier the Republican had introduced plans criticized on both sides of the aisle as “borrow and spend” to add close to $3 billion in bonds to the transportation funding mix.
“The time to build new roads and bridges is now. Interest rates and construction costs are at an all time low; we’re taking advantage of this and taxpayers from all regions of the Commonwealth will benefit,” McDonnell said today. “Our proposals will dramatically speed up the construction of new roads and bridges, ease congestion, and increase job-creation and economic-development efforts statewide. Nearly 900 projects will benefit from our proposals, and Virginians will get to work and back home again as a result.”
Details on the McDonnell transportation agenda announced today:
- Retain 0.25 percent of discretionary sales tax generated within Hampton Roads and Northern Virginia to transportation improvements in those regions.
- Pass a constitutional amendment to permanently protect the Commonwealth Transportation Fund from transfers to the General Fund.
- Enable allocations from the Rail Enhancement Fund to be used as matching funds for federal grants to support rail projects.
- Transferring the administration of the motor vehicle rental tax from DMV to the Department of Taxation.
- Providing for the issuance of special license plates for businesses.
- Privatize the retail operations of the Alcohol Beverage Control and generate an initial $300 million to go into the Transportation Infrastructure Bank.
- Provide a tax credit to employers for expenses incurred in allowing employees to telework pursuant to a signed telework agreement. An employer would be eligible for a credit of up to $1,200 per teleworking employee, depending on the number of days per month an employee will telework. The total credit amount any one employer may take for 2012 and 2013 is $50,000. The aggregate amount of tax credits that will be issued is capped at $1 million annually for taxable year 2012 and 2013.
- Consolidate the duties of the Northern Virginia Transportation Authority, the Northern Virginia Transportation Commission and the Potomac and Rappahannock Transportation Commission into one organization. Gov. McDonnell will provide additional funding to the newly consolidated Northern Virginia Transportation Authority through his funding proposals.
- Amend the powers and duties of the CTB by clarifying that local roads in counties outside the state secondary highway system are local roads, and not part of the state system, increasing the limitation on contract values that the Commissioner and the Director of DRPT may let, eliminating the duty of the CTB to regulate outdoor theatres, providing for the updating of the Statewide Transportation Plan every four years instead of 5, and repealing the section that allows the CTB to designate its employees as special police officers.
- Reduce bureaucratic procurement regulations to reduce costs and create new efficiencies by eliminating the requirement to advertise Requests for Proposals in the newspaper and increasing initial contract terms for environmental, location and design, and inspection work.
- Amending the powers of the VDOT Commissioner to give him more flexibility in structuring agency personnel, reduce project delivery times, and streamline reporting requirements. The proposals include eliminating the requirement for a Deputy Commissioner for the environment, transportation and regulatory affairs, allowing the Commissioner to transfer, abandon or discontinue roads and sell surplus right-of-way associated with a construction project without Commonwealth Transportation Board approval, and allowing VDOT to submit one comprehensive annual report.
- Grant a $50 per container income tax credit for any company which ships cargo containers via barge or rail. This proposal will reduce emissions and congestion along the Interstate 64 Corridor in Hampton Roads.
Previously announced McDonnell roads proposals:
- Direct $150 million to transportation from budget surplus. These one-time funds will go to the Virginia Transportation Infrastructure Bank.
- Create Virginia Transportation Infrastructure Bank to multiply transportation dollars.
- Capitalize the bank with $150 million from surplus and $250 million from audit-identified funds; Goal is to provide an initial $400 million and $1 billion total during administration.
- Modify Virginia Code to authorize Direct GARVEE bonds. This would allow the Commonwealth to issue up to $1.1 billion in Direct GARVEE bonds and utilize toll credits for state match.
- Accelerate the sales of bonds from 2007 transportation legislation to a maximum of $600 million per year, providing ability to issue up to $1.8 billion in bonds during remainder of the administration.
- Increase the availability of revenue sharing, specifically eliminating the $1 million cap per project and $50 million program maximum.
Story by Chris Graham. Chris can be reached at freepress2@ntelos.net.
Ken Plum: Opportunity for leadership
As Spock in the 1991 film Star Trek VI: The Undiscovered Country quoted “an ancient Vulcan proverb, only Nixon could go to China,” only Gov. Bob McDonnell can save Virginia’s transportation funding program from bankruptcy.
Nixon had a strong anti-communist reputation. He was able to go to China and open diplomatic relations without fear of being politically attacked by the right-wing in this country. Two economists studied the phenomenon and developed a model of how “politics often exhibit counterintuitive results…Right-wing politicians sometime can implement policies that left-wing politicians cannot, and vice versa (Cowen and Sutter: “Why Only Nixon Could go to China,” Public Choice 97: 605-615, 1998)
The fact that the Virginia Department of Transportation does not have adequate revenues with which to do its job of either maintaining existing highway infrastructure or constructing new facilities is no longer debated. A press release from the governor’s office Dec. 29, 2010, stated that even with the governor’s proposal to sell bonds, “Still, Virginia’s aging infrastructure requires at least $1 billion a year in new, recurring revenue.” He has asserted in arguments like those used by the Obama administration to support stimulus spending that now is the time with high unemployment and low construction costs that projects should be built. His proposal to borrow nearly $4 billion as a way to move the problem into the next administration has received criticism. The Richmond Times Dispatch editorialized recently that taxing and spending is bad but borrowing and spending is worse.
The governor wrote to legislators in late summer asking for ideas on funding transportation needs. The political implications of his letter became clear when the chairman of the state Republican Party sent a similar letter to Democratic legislators. The tone of that letter was clear: tell us what you would do to fund transportation so that we can run against you next year on that issue.
The other ideas the administration has put forward thus far have been non-starters. Tripling the number of liquor stores throughout the state in order to raise enough money to build one highway interchange holds little hope. Drill, baby, drill! will not happen in our lifetime. Numerous audits of VDOT have not produced a single dime of new money.
Only Nixon could go to China; only Governor McDonnell can fix Virginia’s transportation mess. Time to step up, Mr. Governor. This is your opportunity for leadership!
Column by Ken Plum
The AFP on WREL: Inside Virginia politics
AFP editor Chris Graham joins WREL’s “Online with Jim Bresnahan” to talk Virginia news and politics.
The segment begins with a discussion of UVa. professor Larry Sabato’s assessment of the 2012 U.S. Senate race that has the Virginia race a “tossup.” And that’s before knowing who the candidates will be on either side.
The talk then turns to the 2011 General Assembly elections, redistricting and the upcoming state legislative session.
Moran: McDonnell waging ‘$1.1 billion bet’ on Virginia’s future
Promises to cut federal spending on state transportation projects by the new Republican leadership in the U.S. House of Representatives will have implications on political debates regarding transportation in Virginia.
“House Republicans threatening to cut transportation exposes the dangerous flaws in Bob McDonnell’s deficit-spending transportation plan,” Democratic Party of Virginia Chairman Brian Moran said Wednesday.
McDonnell indicated in the fall that he will ask state legislators to back a plan to jumpstart movement on Virginia’s transportation needs that will include $1.1 billion in bonds that would be paid back with future federal transportation funding. That plan – labeled by Moran as a “$1.1 billion bet” – will put the state’s finances at risk, Moran said.
“If Bob McDonnell has his way, he will heap another billion dollars in debt on top of Virginia families without a sufficient guarantee that we will be able to pay the money back,” Moran said. “All of this uncertainty could be avoided if Bob McDonnell would offer a plan that meets our critical transportation needs without mortgaging our state’s long-term economic health.”
Story by Chris Graham. Chris can be reached at freepress2@ntelos.net.
David Reynolds: Pay at the pump
Posted by afp on February 28, 2011 · Leave a Comment
Those running this state live in another state — the state of denial. As a result they believe they can get Virginia moving again by the following: building 18th Century toll roads; ending 20th century Prohibition; carving up Virginia; creating urban-rural wars; and the latest, by making interest payments instead of making roads.
None will work. Because few have the political courage to say that the solution to our transportation needs can be seen at every busy intersection. It is called the gas tax. It is almost the perfect tax — an easy to administer fee that directly benefits the user. If God imposed an angel fuel tax for every flight into heaven I would not object.
Yet here on earth the state’s ruling class believes that a hike in the gas tax is a punishable crime. The punishment, they believe, is being booted out of office. But you and I don’t hold office. So we have higher priorities. It is personal mobility and having that package delivered on time. Our punishment is different. We sit behind a wheel and don’t move. And that special package arrives late.
Virginians are smart. They know that such punishment is not necessary. They know that the state gas tax was last raised when many of us were too young to hold of a driver’s license. It was in 1987, over 24 years ago, when we last raised the tax. However, if the gas tax is raised just a Jefferson nickel, almost $200 million could be dedicated to meeting our transportation needs! Using data provided by DMV we know that in Fiscal 2010 $700 million was collected on almost four billion gallons sold in Virginia. At 17.5 cents per gallon that equals $40 million for each penny of tax.
We all know the tired arguments against raising the gas tax. Let’s take the GOP mantra: Hard working Virginians can not afford any additional taxes in these tough times. Fact: If the gas tax went up five cents an area worker commuting to Charlottesville with a car getting 20 mpg would have his weekly travel expenses increased by a whopping $1.25. That is less than the cost of one cup of coffee. For the whole week! And far less than February’s hike in pump prices.
Then there is the argument that Virginia would become less competitive with its neighboring states. Fact: The average gas tax in our neighboring states is almost a dime higher, ranging from $0.214 for Tennessee to $0.322 for West Virginia and North Carolina. Maryland is $0.235.
Then there is the argument that if the state tax is raised, the federal tax, now 18.4 cents, compounds the burden. That is one way to look at our political world — let the federal government do the heavy lifting. And complain.
As for those “No new tax” pledges, they mean no increase in the total tax burden. The voting majority will accept a “zero-sum” tax game whereby tax increases in one area are offset by deceases in another. Our new governor has failed to do that. According to one state senator, the $191 million in savings touted by Mr. McDonnell is mainly a shifting of who pays rather than addressing actual efficiencies to reduce costs.
Too many governors and too members of the General Assembly assume that every penny of the gas tax is passed on to the public. Not so. If that were the case the pump price difference would be exactly the tax difference. The wholesale distributor and the retailer are still in charge of setting prices. For example, the average pump price in North Carolina is six cents above Virginia while the NC tax is 9 cents higher. The same story holds for our other neighboring states.
Two more points. (1) When revenues are dedicated to specific programs, i.e., lottery proceeds that support public schools, there is broad public support. Otherwise we would not have lottery ads. (2) Out-of-state drivers pay up to a third of the fuel taxes collected in Virginia. I guess we don’t want others to help pay for our roads.
Now that you are with me, the issue becomes how to do it. Indexing is always politically safe. If Governor Baliles’ 1987 hike were indexed to inflation the state gas tax would be about double or 35 cents per gallon. Or a gradual increase of a few pennies a year should be politically safe. But, as usual, Richmond misreads Virginia.
So why blame government when the fault, dear Brutes, lies with ourselves. And the Japanese. Car manufacturers are building more fuel-efficient vehicles. We buy them. Why not build and buy more gas guzzlers? That way more gas would be sold and more tax collected.
Bad idea? That’s what I thought. Would you settle for buying less gasoline but add a nickel or a dime to it? Good! Virginia, we have lift off.
Filed under Blogs · Tagged with david reynolds, gas prices, road funding, virginia transportation