Patrick McSweeney


 

Another Legislative Impasse?

 

The usual suspects are pushing hard for another tax increase this year, but their position is weaker than it was two years ago.


 

The current fight in the Virginia General Assembly over a state tax increase bears a resemblance to the 2004 fight, but there are important differences. The first is that taxpayers are still adjusting to the 2004 tax increase — the largest in state history.

 

Another difference is that the opponents of a new tax hike realize the need to present an alternative to raising taxes. They are proposing methods of meeting mobility needs without a tax hike. House Speaker William Howell, House Transportation Committee Chairman Leo Wardrup and other GOP delegates recently announced the outline of a House GOP plan that would include a greater role for private financing of new transportation facilities.

 

The proponents of a tax increase for transportation have overstated the problem. For example, Senate Finance Chairman John Chichester, who is pushing a combination of tax increases and new taxes and fees on the sale of fuel and vehicles, on auto repair and the registration of SUVs and certain other vehicles, claims that “Virginia ’s transportation system has moved from life support to Code Red.”

 

What proponents refuse to acknowledge are the negative consequences of the tax increase for transportation enacted at a special legislative session in 1986 called by then-Gov. Gerald Baliles. They propose a repetition of the very approach that contributed to the present problems. That 1986 tax hike followed just five years after a gas tax increase had gone into effect. As an exhaustive 1990 doctoral dissertation demonstrated, the new revenues generated by the 1986 tax hike failed to reduce traffic congestion and to provide a stable, continuing source of funding for transportation — the twin objectives of the Baliles tax initiative.

 

In a February 21, 1988, Washington Post article, John Lancaster reported that traffic in Northern Virginia remained as congested as ever. An article in the June 1990 issue of Virginia Business concluded that driving in Northern Virginia was as difficult as before the infusion of new tax revenues. Gov. L. Douglas Wilder, who succeeded Baliles, commissioned a study of transportation after his 1989 election which found that projected transportation needs to the year 2010 had risen by 79 percent over the 1986 projections for 2010. Matters were getting worse, not better.

 

In 1989, Baliles himself recognized that the gap between available revenues and transportation needs had not been closed by the 1986 tax hike. He proposed yet another tax increase to address transportation needs. His suggestion was to empower localities to impose an additional one percent income tax for their local transportation needs.

 

Wilder initiated a program in 1990 to link land use and transportation planning, just as Governor Tim Kaine is proposing. Both plans have a laudable objective, but a fundamental flaw as well. Most of the localities experiencing heavy growth pressure have no responsibility for roads. The Virginia Department of Transportation, which continues to have that responsibility, does not make land use decisions. Until accountability for results is assigned to one or the other, the linkage between land use and transportation decision making will remain tenuous.

 

Kaine’s second round of town hall meetings may expose the tension between his support for higher transportation taxes and his growth control proposals. Just as the Baliles tax hike produced an explosion of low density development far from existing urban cores, another infusion of tax funding for roads will do more to encourage sprawl than any local growth controls could possibly counteract. And Kaine’s growth control proposals could give localities greater authority to push development even further out.

 

For these reasons alone, the 2006 session isn’t like the 2004 session.  

 

-- February 13, 2006

 

 

 
 

 

 

 

 

 

 

Contact Information

 

McSweeney & Crump

11 South Twelfth Street
Richmond, VA 23219
(804) 783-6802

pmcsweeney@

   mcbump.com

 

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