Bacon's Rebellion

The Washington Post is the first Virginia newspaper to explore the significance of the impact-fee amendments that Gov. Timothy M. Kaine inserted into the transportation bill likely to be approved tomorrow by the General Assembly.

The measures would allow local governments to raise money not only from developers requesting rezoning for their projects but by-right development where no rezoning is needed. At $20,000 per lot, the measure could provide up to $520 million for a county like Prince William, which has about 26,000 lots available for development.

The predictable issue is the fairness of financing road improvements on the backs of newcomers. The advantage for local politicians is that people who will buy houses some time in the future, by definition, haven’t bought them yet and, in many cases, may not even live in the locality in question. Non-residents don’t vote. Residents do.

But the home builders lobby argues, rightly, I think, that impact fees will drive up the cost of new housing. And, because new housing prices set the benchmark for old houses, impact fees will drive up the cost of housing stock generally. Of course, that, too, is likely to be a crowd pleaser among existing voters, most of whom are home owners. Not only will existing residents not pay for the transportation improvements, impact fees on new houses will make their houses more valuable in the bargain.

What we don’t know yet is the extent to which higher housing prices in fast-growth counties will encourage developers to leap-frog to farther-out jurisdictions that haven’t imposed impact fees. What will the consequences be as citizens wind up driving even further to work and clogging more miles of Interstate and arterials? At this point, that’s anybody’s guess.

The impact fees strike me as a blunt instrument. They treat all forms of development on the same basis. But some forms of development are more transportation-efficient than others. Mixed use development is preferable to traditional segregated land uses. Grid streets provide more connectivity than cul de sacs. Compact, pedestrian-friendly development along bus and rail lines provide a mass transit option that low-density development does not.

By varying the impact fees based on the anticipated transportation impact of the new development — charging less for transportation-efficient development and more for scattered, disconnected, low-density development — local governments could stimulate the building of more sustainable human settlement patterns. Combine variable impact fees with Urban Development Areas and the devolution of responsibility for secondary roads to local governments, and we could see major changes in the built landscape. In theory, at least. In actual practice, we have to brace ourselves for the law of unintended consequences as people act in all sorts of perverse and unpredictable ways.

In any case, Virginia politics is entering a new phase. After four or five years intense debate on the state level over transportation, the discussion will shift to local governments as they begin implement Urban Development Areas and decide whether or not to impose impact fees.

One key financing provision of the Transportation Abomination will increase fees for “abusive drivers.” Gov. Timothy M. Kaine amended the law to eliminate the worst aspect of the original bill: language that would have applied the hefty new fees ex post facto, penalizing drivers for offenses incurred before the law goes into effect.

I once supported the abusive driver bill — not for the money it would raise but for the deterrent effect it would have on drivers who, on the best of days, interrupts the smooth flow of traffic with their reckless speeds and lane weaving, and, on bad days, cause wrecks and traffic back-ups for miles. I have no sympathy for these jerks whatsoever.

Then reality set in. I don’t know the history of how traffic fines were set in the past, but I suspect that they were born of experience, striking a balance between a variety of factors. In their lust for road-building funds, legislators have forgotten what those factors might be. There will be two predictable results from this law:

First, drivers will have a much greater incentive to contest traffic tickets. Those who can afford lawyers will be more likely to hire them. Traffic courts will get more crowded, and police will spend more time testifying. Next thing you know, there will be an outcry for more judges, more courtrooms and more police. Has anyone calculated what this will cost? The answer is no.

Second, drivers who can’t afford lawyers will get ground down by the system. I chatted recently with an attorney who has handled a number of traffic-court cases, and he described how, under the current, relatively lenient regime, many poor people can’t afford to pay the fines. Then they get fined for failing to pay the earlier fines. Then they get thrown in jail. The attorney spoke passionately about one client, a poor man who worked hard to provide for his wife and children. The client is now serving time in jail, not contributing to society in any way.

I don’t know how many people there are like that — maybe dozens. But they certainly will number in the hundreds, if not thousands, when traffic fines treble or quadruple. How much will it cost to put those people in jail? How much will the state lose in wages unearned and taxes not paid? Has anyone calculated what this will cost the state? No. No one will bother to do so until the law goes into effect and the unintended consequences become all too apparent to ignore.

House Speaker William J. Howell predicted yesterday that Gov. Timothy M. Kaine’s amendments to the General Assembly’s transportation/land use package would encounter little opposition when the Senate and House reconvene Monday. Republican lawmakers approve of the Governor’s changes for the most part, he told the Fredericksburg Rotary Club yesterday. Chelyen Davis has the story for the Free Lance-Star.

Also, because Kaine packaged his amendments as a substitute bill, rather than as line-item changes, lawmakers won’t have an opportunity to tinker with it, Howell said. “You can’t go in and really look at each of the different amendments, it’s up or down, basically.”

So, the likelihood that the Transportation Abomination will become law is now approaching 99 percent. Virginians will pay a hodge-podge of higher taxes, fees and penalties with only the most tangential relationship to how far they drive, when they drive, or the strain they put on Virginia’s transportation system. There is absolutely no incentive for anyone to modify their driving habits in any way — no reason to carpool, ride the bus, telecommute, move closer to work, what have you. The bill does provide additional sums for mass transit, but there’s no methodology for determining if dollars would be spent to greater effect that way than by making other types of improvements.

On the positive side, the creation of Urban Development Areas and related transportation districts will encourage local governments to think very differently about the relationship between land use and planning. Fast-growth jurisdictions across Virginia may be forced to re-write their comprehensive plans. Meanwhile, the new local option to impose impact fees could shift the transportation debate from the state to the local level. It will take months, maybe years, for the implications of this legislation to work its way through the system.

Lost in the controversy over transportation funding is the fact that the GOP transportation bill, as amended by Gov. Timothy M. Kaine, will make significant changes to the way local governments approach land use and transportation. We’ve chronicled that un-sung aspect of the transportation debate on this blog, mostly from a Republican perspective, mainly because Republicans got out front on the issue.

Now, we hear from Gov. Kaine. Responding to a question from yours truly during a blogger conference yesterday, Kaine praised the land-use elements of the controversial HB 3202. The bill has several worthwhile features, said Kaine, who gave specific credit to Del. Clay Athey, R-Front Royal, for his role in writing the legislation.

Said Kaine: “UDAs and UTSAs are very good ideas. We’ve turned the corner and we’re embracing the notion that land use has to be a part of transportation.”

By UDAs, Kaine was referring to Urban Development Areas, which would require fast-growth counties to create districts designed to accommodate future growth. Local government would concentrate their infrastructure in the UDAs and encourage more compact, New Urbanism-style development, while developers would be forewarned that efforts to develop outside the areas would not be supported. Kaine liked the idea so much that he expanded the eligibility to far more counties and cities than the Republican authors originally contemplated.

By UTSAs, Kaine was referring to Urban Transportation Service Areas, which would typically overlay the UDAs. Kaine amended the legislation to expand the authority of local governments to levy impact fees. He expects that most eligible jurisdictions will jump at the chance “in fairly short order.” Impact fees will help raise revenue for transportation projects and offset development taking place outside the UTSAs.

I don’t yet fully understand the impact-fee aspect of the legislation, but I anticipate that it could become the most far-reaching piece of the bill. We can anticipate lots of sturm and drang as local governments debate setting up UTSAs and adopting impact fees, especially if local home builders associations mobilize to oppose them. Normally, I’m leery of impact fees, which can load disproportionate impact of new development onto developers and newcomers, increasing the cost of real estate and making housing unaffordable. But they may prove worthwhile if they’re used as a cattle prod for developers to create more balanced, more compact and better connected human settlement patterns.

Perhaps the most encouraging news from the Governor is that the current legislation is not the last word on land use reform. Last year, the state broached land use issues when it passed a bill requiring the Virginia Department of Transportation to analyze the regional traffic impact of rezoning projects, Kaine said. This year, UDAs, UTSAs and impact fees constitute another step forward. Looking ahead, Kaine said that his transportation accountability commission is looking into land use issues as well. “I think there will be more [legislation] to come. This is not the work of one session or two.”

Several days ago, I raised a question about Gov. Timothy M. Kaine’s amendments to the GOP transportation package, which seemed to represent a dramatic turn-around from previous stances. (See “Kaine Submits Transportation Amendments,” March 26, 2007.) After criticizing the use of debt to pay for transportation improvements, I asked, was Kaine really amending HB 3202 to borrow $500 million more than the $2.5 billion the Republicans had proposed?

Kaine’s amendments seemed at such variance with his previous rhetoric, and the rhetoric of fellow Democrats, that I wondered whether I even properly understood the amendment. Turns out that I did. During a blogger conference yesterday, the Governor illuminated the thinking behind this important amendment.

The General Assembly proposed issuing $2.5 billion in debt, with debt service to be paid out of the General Fund. But HB 3202 identified no particular source of funds, Kaine explained. “If you’re going to issue long-term debt,” he said, “you should use a transportation revenue source to back up the bonds.” He found a long predictable, long-term source of revenue — the tax on automobile premiums — to cover the debt service. Because the tax generated enough revenue to cover the debt service on $3 billion, he decided the state might as well borrow the full $3 billion.

In other tweaks to the legislation, Kaine lifted the restriction that would have limited the bond proceeds to Interstates and primary roads. His wording would permit the finacing of secondary road projects, making it possible to spread more money around the state.

Gov. Timothy M. Kaine held a telephone blogger conference yesterday afternoon. His most interesting comments came at the tail end of the session, when a blogger identified as Joshua with Raising Kaine, the hugely popular pro-Democratic Party blog, asked the Governor about the political impact of his decision to work with the Republicans on their transportation legislation. Coming to an agreement with the GOP, as I read the sub-text of his question, neutralized the Democrats’ big campaign issue this fall.

I replicate Joshua’s question almost verbatim, but not quite; he spoke a little faster than I could type: “I see you as the coach for Virginia Democrats. I find the message from the transportation bill and this session not necessarily conducive to the goal of helping Democrats win. … In terms of winning in November, where’s the plan? How do we take the message and win the legislature?”

Kaine didn’t seem particularly concerned about the Democratic Party message in the General Assembly elections this fall. His response: “While I’m Governor … I define my role as 60 percent chief executive, 30 percent interacting with the legislature, and 10 percent [Democratic Party] coach. … My goal is getting results.”

Thank you, Governor. It’s nice to know that your Number One priority is the well being of the Commonwealth, not creating Democratic Party talking points for the next election. As one of the 40 percent or so of the electorate that classifies itself as “independent,” I, too, am far more interested in the well being of Virginia than I am of either political party. As for the merits of the legislation itself, I’ll leave that for another blog post. But your heart is in the right place.

Update: Well, at least the Governor’s rhetoric is in the right place. I was praising the Governor to a Republican delegate during the VCAP reception for Newt Gingrich last night. The delegate (who spoke off the record) seemed less than impressed. GOP legislators had boxed Kaine into a corner with the transportation legislation, he said. Politically, the Governor could not allow himself to be perceived as the one responsible for torpedoing a transportation solution that had proven elusive for so many years. As I interpreted the delegate’s meaning, once Republicans crafted a far-reaching legislative package, Kaine had to go along or he’d jeopardize the Democrats’ chances in the upcoming elections.

That’s a plausible interpretation. At the very least, give Kaine credit for this: He’s smart enough to know when to look like he’s rising above partisan politics. Virginians like that. Virginians do want results. And in the long run, governing well is the best political strategy of all.

Update: Not Buck Turgidson offers much the same interpretation as the delegate I quote above. Read his post on Bearing Drift.

A reader has passed along an “initial staff analysis” of Gov. Timothy M. Kaine’s proposed amendments to the Republican transportation package. Viewed in context of the broad scope of the legislation — transportation funding, VDOT reform and land use reform — the Governor’s changes seem modest indeed. View the PowerPoint here.

Among the important points not noted previously on this blog:

• CBT board. The Governor would eliminate a General Assembly bid to appoint a number of members of the Commonwealth Transportation Board — a clear power grab. This provision strikes me as a bargaining chip that legislators will willingly yield.
• Urban Development Areas. The Governor would expand the number of jurisdictions required to create Urban Development Areas (UDAs) where growth and infrastructure improvements would be channeled. Not only would the requirement apply to jurisdictions showing a 15 percent growth rate between the last two census years, the UDAs would apply to localities with populations over 20,000 showing a five percent growth rate — about 75 in all. Clearly, the Governor has accepted, even expanded upon, a key land use provision of the legislature.
• Impact fees. First, the Governor is extending to about 75 localities an existing road impact fee authority that is authorized for only eight counties now, and actually utilized only by Stafford County. Second, he kept in the bill the broad impact fee authority available to six large counties but limited their use to outside Urban Transportation Service Districts, and only for land zoned for agricultural being developed for residential purposes. (Thanks to Reader Roll Tide for correcting my previous explanation.)

Kaine accepted the following changes designed to improve VDOT performance:

– Performance Measures for Project Evaluation and Selection

– Competitive Bidding of VDOT Functions

– Automated Toll Collection

– Reassignment of Road Classification Based on Function

– Creation of Transportation Accountability Commission

The financing portion of the legislation — both the statewide piece and the regional pieces — is such a sorry mess, even after Kaine’s amendments, that my brain goes into a death lock at the mere contemplation of it. If you want details, you’ll have to consult the PowerPoint.

All things considered, this is extremely complex legislation, and we’ll be sorting out the implications for months, if not years, to come.