James A. Bacon
It looks like the 2013 session of the General Assembly will be consumed by one or more proposals to jack up taxes to pay for more transportation spending.
Sen. John Watkins, R-Powhatan, has advanced a complex package to raise an estimated $734 million for transportation, which he will unveil publicly at a meeting of the Mayors and Chairs of Virginia’s Urban Crescent today, the Times-Dispatch reports. But there are other proposals. The Richmond Planning District Commission voted last week to index the motor fuels tax. And the T-D quotes House Majority Leader M. Kirkland Cox, R-Colonial Heights, as saying that there will be a number of “competing proposals” in the upcoming legislative session.
The Watkins plan would (take a deep breath) impose a 5% tax on the wholesale price of gasoline…. anticipate the inevitable objection that the burden would fall disproportionately upon low-income Virginians by lowering the income tax rate on the lowest three income tax brackets…. and deal with the inevitable objection to that proposal, namely that lower income tax revenues would take money from schools, health care and other General Fund priorities, by eliminating transportation-related tax credits and sales-tax exemptions. Phew!
Oh, yeah, Watkins also would impose a $102 annual assessment on hybrid and electric vehicles to make sure they pay their fair share of building and maintaining roads.
The quest for more revenue is reaching a fever pitch as the time approaches when state funding for new construction projects runs out. Under state law, bond payments and road maintenance take priority over new construction. Borrowing and maintenance costs are rising while transportation tax revenues are mostly flat.
Bacon’s bottom line: So far, the transportation challenge in Virginia has been framed as one of insufficient tax revenue rather than (a) how the money is spent, or (b) the disconnect between transportation and land use planning. The discussion is all about protecting the status quo. Other than raising taxes, nothing would change. The underlying assumption is that there is nothing wrong with Virginia’s transportation policies that more money won’t fix.
I dispute that assumption. I maintain that transportation policy is fundamentally broken. And while, yes, we probably do need to spend more money on transportation to increase mobility and access, raising taxes without changing how that money is spent is a fool’s errand. No amount of tax increases will help Virginia build a transportation system for the 21st century if the money goes to the wrong projects.
The last time Virginia increased transportation taxes was in 1986. It was not a propitious time for Gov. Gerald Baliles to ask for a major tax hike, for the state was still reeling from bid-rigging scandals in which major road contractors had colluded to jack up construction bids. Understanding that Virginians would be reluctant to pay higher taxes without assurances that new tax revenues wouldn’t wind up lining the pockets of crooked contractors, Baliles shrewdly packaged the taxes with bid-rigging reforms.
Where is Jerry Baliles now that we need him? Is anyone talking about devolving responsibility for secondary roads to local governments that make the land use decisions that drive the need for those roads? No. Is anyone talking about utilizing “smart” technology to synchronize traffic lights and squeezing more capacity out of existing streets and roads? No. Is anyone talking about utilizing special tax districts and other value-capture techniques to ensure that landowners whose property values increase help pay for the transportation improvements that bring them a windfall? No, no, no!
The only ray of hope is a behind-the-scenes makeover of Virginia’s strategic planning process for transportation that would rate projects according to various metrics of need, such as congestion mitigation, economic vitality, environmental impact and coordination of transportation and land use. While these ratings may inform decision making, there are no assurances that merit will prevail over politics.
Watkins’ plan, like all the others made public so far, would perpetuate the system in which transportation projects are determined by rent-seeking, political log rolling and ideology, not demonstrated need. Indeed, by creating a new source of revenue and superficially “solving” the problem, the proposal would ensure that nothing changes.