Guest Column

Steve Haner


 

Fantasyland 

Campaign brochures will claim that the 2005 General Assembly raised $850 million for transportation. That's pure spin. Look closely, and you'll find that as little as $23 million is new, ongoing spending.


 

Okay, the 2005 General Assembly coughed up $850 million for transportation. Problem solved. And they did it without raising taxes, offending family values or missing a single legislative reception. The path to re-election is smooth. There is no point in discussing transportation any more.

 

Sorry. Consider that opening blast of sarcasm a belated nod to my late and lamented journalistic hero, Hunter S. Thompson. This has been a bad year already. Hunter Thompson. Hunter Andrews. Two men who wouldn’t suffer fools. It is pleasant to imagine that somewhere those two are swapping tales over a tall one. (Senator, don’t take that pill from him. It’s NOT a vitamin.)

 

But back to our original fantasy – a transportation solution. If you think we’ve fixed anything, I’d like to sell you a bridge. In fact, VDOT may try that funding scheme next out of desperation. (Actually, if we can sell naming rights on a stadium, why not a bridge or a stretch of highway? Why let the politicians name them for free? Forget Woodrow Wilson, what am I bid for the name of the new bridge on the Potomac?)

 

Why I waste my time on Bacon’s Rebellion is beyond me. I sat in the transportation committees all session long waiting for the presentation on the Jim Bacon-E.M. Risse legislative package to reform our human settlement and mobility patterns. No such bills were introduced. I’m starting to suspect that it’s just sophistry. Which is a shame, because the approach has merit and I wish somebody would try to give it concrete form.

 

But we can’t wait.

 

Much will be made by Election Day of the $848 million figure. The Governor recently called it the greatest infusion of cash into transportation in Virginia history. Everybody during the session, from the Governor on down, admitted that this year’s investment of mostly one-time money was only a “critical first step” – Speaker Bill Howell’s phrase.

 

Now that the session is over, however, communication passes to the political consultants, who will do all in their power to claim that the problem is solved and their clients are the best friend the Virginia commuter ever had. Rumor has it even the Governor might have another election in mind.

 

The $848 million figure doesn’t survive close scrutiny. The number that matters is the amount of money the Assembly dedicated on an on-going annual basis. You can’t build a six year plan on a one-time infusion of cash. The on-going revenue that should be around for an entire six-year plan amounts to only $131 million a year.

 

2005-2006

Transportation Amendments

Two-year Totals (in millions)

Revenue
$477   Growth in Existing Revenue Sources
$240   Cash from General Fund Surplus (One-Time)
$108   Premium Tax on Auto Insurance Policies (On-Going)
$23   Rental Car Tax (On-Going)
$848   Total
How It Is Spent 
$256   Pay Off Internal VDOT Project Deficits
$108   Debt Service on Federal Revenue Notes
$141   Transportation Trust Fund Addition
$97   Maintenance
$75   Capital Costs for Transit
$75   Local Partnership Fund
$50   Public Private Project Fund
$23   Rail Fund
$20   Welcome Center/Rest Stops
$2   DMV Computers
$848   Total

 

Most of the $848 million isn’t even the General Assembly’s doing. It includes $477 million in growth in existing revenue sources, most of it from a new estimate of federal funds. Had the General Assembly never come to town, this money would have gone to transportation all along. The Assembly is responsible for adding only $371 million.

            

Of that, $240 million in cash came from the excess general fund revenue (a.k.a. the surplus). But there is no reason to expect a future General Assembly to do that again. The only long-term funds are the $131 million from the insurance premium tax on auto policies ($108 million) and the tax on rental cars ($23 million).

 

A hard-core cynic, were one around, would point out that the insurance premium tax was actually pledged to transportation in 2000 by Gov. Jim Gilmore and that year’s Assembly. So the only new, on-going money amounts to $23 million a year. It is long fall from $848 million to $23 million.

 

To really put it in perspective, consider this. The current revenue from the various transportation revenue changes adopted in 1986 is about $800 million annually. The recent VTRANS 2025 study estimated we will need another $925 million a year just to maintain what we are doing in the face of inflation and rising maintenance costs.

 

The House tried to do better. It sought to provide even more of the insurance tax money, and it had a worthy if controversial idea to impose big fees on bad drivers and put that money into the pot. The Senate said no, in part because it didn’t like the idea and in part because it wants to bring back a much bigger transportation package in 2006.

 

Is the insufficient long-term funding the only bad news?  Unfortunately, no.

 

For the first time the budget directs that $97 million in federal highway funds be spent on maintenance projects, many of them long deferred. In recent years it has been the federal money keeping the construction program from a total shutdown. This diversion of federal money to needed maintenance is a warning sign that such a shutdown is coming towards us rapidly.

 

The Senate killed the House’s proposed constitutional amendment to prevent future raids on transportation funds for other purposes. Many people will remain reluctant to accept tax or fee increases for transportation if they worry the money will be diverted. They would be more reluctant if they understood that the Assembly rejected the Governor’s plan to stop using transportation revenue to subsidize various executive branch agencies.

 

The two chambers couldn’t even agree on the goals or reporting deadline for a legislative study committee.

Finally, budget language reinforces the General Assembly’s demand that if there are tolls imposed to pay for new lanes on Interstate 81, those tolls will be imposed only on commercial truck traffic. The Virginians (and Yankee tourists) who drive passenger cars and SUVs up and down that congested highway will continue to be told that the problem can be fixed without any additional dollars coming out of their pockets.

 

If I have to indulge in fantasy, I prefer the one with the two Hunters and their great conversation at the Valhalla Bar and Grill.

 

-- March 14, 2005

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Stephen D. Haner is vice president for public policy with the Virginia Chamber of Commerce. You can can e-mail him here:

s.haner@

     vachamber.com