Bacon's Rebellion

While I am despondent about the passage of the GOP transportation-financing package, there are shreds of consolation from the General Assembly, and Gov. Timothy M. Kaine has enumerated three of them in a Saturday press release touting his legislative successes. They are:

SB1181: Subdivision Streets
Patron: Martin E. Williams, R-Newport News
Strengthens standards for accepting subdivision streets into the state system by increasing connectivity standards for roads and subdivisions. Basic connectivity enhances the overall capacity and efficiency of the transportation network and reduces congestion on major arterials by providing alternative routes for local trips.

HB 2228, SB 1312: Access Management
Patrons: Del. Leo C. Wardrup, R-Virginia Beach, Sen. Charles B. Hawkins, R-Chatham
Promotes traffic flow and interconnectivity on the state’s road system, ensuring that new and existing roadways are not degraded by the creation of too many and poorly spaced intersections, turn lanes, median breaks, and other impediments.

HB2163, SB1144: Incident Management
Patrons: Del. Shannon R. Valentine, D-Lynchburg, Sen. Frank W. Wagner, R-Virginia Beach
Allows VDOT vehicles to participate in clearing cars and restoring traffic flow after an accident, improving response time.

Each of these bills is worthwhile, and each will make an incremental improvement to ameliorating traffic congestion. They constitute worthwhile first steps down the long road to land use reform. Let us hope, however, that lawmakers don’t declare victory and move on.

So… the GOP compromise on transportation has won approval in both the Senate and House of Delegates. The bill now goes to Gov. Timothy M. Kaine, who has expressed major reservations about it. In a press release yesterday, he stated:

When the final conference report on a long-term revenue package for transportation was developed, too few people were involved, and as a result, the bill on its way to my desk is not only insufficient to address Virginia’s needs, but contains numerous issues to address. I will use the 30 days between now and the reconvened session on April 4 to consult with legislators, local elected officials, and other stakeholders to fix the problems in the bill and reach a comprehensive, long-term, and statewide transportation solution.

I’m not familiar enough with the legislative process to know what leverage, other than threatening to veto the bill, the Governor has to tinker with the legislation at this point.

Whatever procedural influence he may have, it seems clear that the Governor has lost much of his political leverage. His call earlier this year to take the transportation issue to the people in the fall elections now rings hollow. Despite long odds, Republicans shed their differences to pass a far-reaching piece of legislation. Between taxes, fees, bonds and penalties, they will throw even more money at transportation than Kaine would have in $1 billion-a-year plan. Furthermore, GOP passed their bill with a measure of bipartisan support. While six Republicans in both chambers voted against it, 13 Democrats voted in favor.

If Kaine vetoes the transportation financing bill, he will be the obstructionist. He will be the one who prevented what Speaker William J. Howell calls Virginia’s “best chance” to address the transportation crisis. Kaine can point out all sorts of problems with the bill, but his job in persuading the public, which is not particularly attentive to arcane policy details, will be rendered far more difficult.

Is the financing piece of the GOP compromise an abomination? In my mind, it certainly is. Is the idea of empowering opaque and unaccountable regional authorities a potential disaster in the making? Absolutely. But the GOP has the “Big Mo” now. I will be most interested to see what the Governor’s next move is.

The Hampton Roads chapter of the Axis of Taxes is riding the wave of public frustration with traffic congestion to generate public support for higher regional taxes and big regional road projects. But two of the biggest projects topping the list of regional priorities — the Third Crossing and the U.S. 460 upgrade — won’t address traffic congestion at all: They are economic development projects. The purpose of this post is not to denigrate the economic development potential of either project — that’s an entirely separate issue — but to point out that many citizens in Hampton Roads are likely to be quite unhappy if they find themselves $200 million a year lighter in their wallets and still stuck in traffic.

A number of this blog’s readers have been making that very argument in the comments section. But the point was really driven home by numbers cited in a press release issued by the Coalition for Smarter Growth. Describing the U.S. 460 project as “a symbol of waste and misplaced priorities in our transportation program,” Executive Director Stewart Schwartz writes:

Route 460 would be a new 55-mile interstate equivalent highway between Suffolk and Petersburg. The cost of the road is currently estimated at $1.5 billion, but some estimates go to $1.9 billion. The state’s taxpayers would have to pay at least $1 billion toward a project that VDOT wants private toll-road builders to construct under the Public-Private Transportation Act.

The PPTA isn’t living up to the promises made by its boosters. This amounts to a substantial public subsidy…

Remarkably, the existing Route 460 is predicted in VDOT’s Environmental Impact Study to be at Level of Service A (free-flowing) in 2030, except in small towns with traffic lights. Today, the highway carries fewer than 10,000 vehicles per day compared to average daily traffic volumes on I-64 on the Peninsula of 43,000 to 80,000 vehicles per day in the Williamsburg area.

Says Schwartz: “Roads like 460 have been pushed through the [Commonwealth Transportation Board] process by VDOT and would make an early claim to both the $2 billion in bond funding and the increases in fees, taxes and tolls in the Hampton Roads region. This will siphon money away from real congestion problems within the metropolitan areas of the state.”

The House and Senate conferees have pounded out their final compromise on the transportation package. There are two more obstacles to go: The Senate must approve the final version, which may or may not happen: Democrats and a handful of Republicans are still unhappy with key elements of the plan. And then the package goes to Gov. Timothy M. Kaine, who also has expressed his displeasure.

As compromise has succeeded compromise, and amendment has piled upon amendment, the legislation, to my mind, has gotten worse and worse. The most significant change in this latest iteration, according to a press release from the Speaker’s Office is that it relies even less upon the General Fund than previous versions to pay for roads. Total General Fund revenues amount to “consistently less than 1 percent in any given year – and actually declines as a percentage over time.”

In other words, the legislation requires increased taxes, levies, fines and fees from other sources. Here’s how it the new revenues stack up: (1) a statewide revenue stream reaching $600 million per year; (2) regional taxes of more than $400 million per year for Northern Virginia; (3) regional taxes of more than $200 million for Hampton Roads; and (4) a sweetener of $2.5 billion in bonds issued over an eight-year period.

We started the General Assembly session arguing whether Gov. Kaine’s proposal to increase statewide taxes by $1 billion revenue was too much. Now the putatively “anti-tax” Republicans are patting themselves on the back for a package of state and regional taxes, fees and fines totaling about $1.2 billion a year — and that’s before taking on $2.5 billion in debt. No wonder Kaine has been sitting quietly and “contributing nothing” throughout this process. The more the Republicans have talked, the richer they’ve made the tax-and-spend elements of the legislation.

I can only imagine that Republican legislators are so close to the process that they have lost all perspective. They haven’t noticed that they’ve moved backward, not forward. They may be able to insulate themselves against charges of “doing nothing” on transportation, but they also have to deal with the utter dismay of their small government constituents. Maybe there’s something I’m missing, but based on the documents provided by the Speaker’s Office itself, I am absolutely apalled.

HB 3202 does contain a couple of useful VDOT and land use reforms, but they only tinker on the margins of the problem. They don’t begin to un-do the damage created by the incoherent mix of tax revenues, or the shoveling of money into unaccountable regional transportation authorities. This entire process has wound up worse than I could ever imagine.

J.R. Hoeft over at BearingPoint, a solidly Republican blog, doesn’t sound any more enthusiastic than I am. If there are any Republicans out there who want to defend this legislation on the grounds of conservative/free market principles, as opposed to a panicky bid to save their nexts in the next election, I would like to hear from them.

This cryptic passage appears in an e-mailed press release issued around 9 a.m. today by Del. Kirk Cox, R-Colonial Heights, one of the conferees working on revisions to the state budget (my italics):

Based on the continuing constructive discussions between budget conferees for the House and Senate, I am confident that a budget agreement acceptable to both houses will be reached in advance of our regularly scheduled adjournment on Saturday, February 24.

The recent action by the conferees for the House on House Bill 3202, acceding to the Senate position on the amount of additional funding for transportation in the current budget – at least $500 million – removed what everyone recognized was the chief obstacle to a swift budget resolution. I concur with the widely reported sentiments of both conference committee chairmen – Senator Chichester and Delegate Callahan – that we are now in a far better posture to sort out any unresolved issues and achieve a timely budget compromise.

I’m not clear what this means. Does the $500 million constitute entirely new revenue? Is the General Fund off limits for transportation funding? If it turns out that the House has caved again, after already compromising once, the extremely loud noise you hear emanating from western Henrico County will not be a nuclear weapon or a volcanic eruption — it will be my head exploding.

Update: Chelyen Davis with the Free Lance-Star explains the significance of this development in her story yesterday. In the grand scheme of things, it doesn’t represent a terribly large shift in the House’s position. It eliminates one stumbling block in the transportation negotiations, but there are other issues to resolve.

Update II: Paul Nardo, on the Speaker’s staff, says the House did not “cave” but made a tactical concession to keep the negotiations moving, while preserving core budgetary goals. For priorities, click on “comments” and scroll to the third comment.

While the MSM cyclops focuses its monomoniacal eye on the absolute level of transportation funding — will legislators raise another $1.2 billion a year, or only $1 billion — quiet progress is being made in other areas: in particular, the prioritization of funding.

As Peter Galuszka reports for the Road to Ruin project, there is increasing support for creating performance standards for roads — comparable in ways to the Standards of Learning for schools. These standards would measure outputs, not inputs: rating transportation projects on the extent to which they contribute to key goals like safety, congestion mitigation and economic development.

Gov. Timothy M. Kaine has already appointed, by executive order, a transportation accountability commission to recommend performance standards. And House Bill 3202, the GOP compromise bill, also contains language that would create a Joint Commission on Transportation Accountability to do much the same thing. Ideally, the two groups would work together, not squabble over differing definitions and standards.

The metrics have yet to be devised, although Kaine’s group has already started the process, having held its first meeting. Over and above the safety guidelines, which are well established, metrics might include traffic congestion mitigated per dollar spent, or contribution to economic development. By “economic development,” backers of this concept are not envisioning earmark projects like the $50 million interchange in Stafford County built to improve access to a little-used regional airport. That’s precisely the kind of low-return “investment” they want to prevent. Instead, economic development metrics might measure how a new road would increase the accessibility of labor to a major employment center like Tysons Corner.

Setting priorities is critical. Setting the right priorities is even more critical. This represents an excellent opportunity to align transportation with land use planning. It’s also an opportunity for the state, for once, to stimulate in-fill and re-development in Virginia’s urban core and aging suburbs instead of pushing growth ever farther into the countryside. It could even become a tool one day for building transportation systems that serve Balanced Communities.

There’s one issue that we did not have a chance to explore: the extent to which new priorities driven by new metrics actually would change current spending patterns. Virginia’s road allocation formula is fairly rigid, parceling out funds on the basis of antiquated highway districts boundaries, drawn in the 1920s, and between road classifications that haven’t been updated in almost as long. HB 3202 would require the Virginia Department of Transportation to reclassify roads, but I’m not aware of any measure that would redraw VDOT district boundaries.

Meaningful reform may require more than setting new standards: It may require tearing up the old road funding formula and starting over.

Market pricing is coming to roads and parking sooner rather than later. Virginia can be in the forefront of the trend, or it can get left in the dust. As General Assembly conferees consider their quasi-socialist approach to building and maintaining roads — raising new revenues from every source but those who actually use the roads, and providing access for “free” — they need to recognize that the technology and theory behind market pricing continues to gain credibility around the world.

The latest point of reference: a mini-white paper written by Bern Grush, founder of Skymeter Corporation, of Toronto, Canada. Grush advocates the concept of Road User Charging, which combines a number of features: (1) road pricing, essentially a charge for vehicle-miles driven, as a substitute for the gasoline tax, (2) congesting pricing, a mechanism to cope with traffic congestion, and (3) parking demand management. It’s the ultimate user pays system, and it’s on the cusp of commercial feasibility thanks to satellite and wireless technologies.

Grush is a thought leader in this space. The challenge of his start-up company is to persuade someone to invest in its untested technology and to pioneer its untested theories. Selling to government requires a frustratingly long sales cycle. But Skymeter has raised one round of angel financing, and it expects to close another round, according to an article in the Toronto Star. Although Grush has articulated the possibilities provided by the emerging technology better than anyone I’ve read, he’s not alone. The success of congestion pricing in Singapore, London and Stockholm are attracting attention around the world.

It’s a travesty that, in a state that prides itself as home to a world-class Information Technology industry, the General Assembly seeks to devise a “stable, long-term source of transportation funding” without giving serious consideration to the latest and greatest information technology and theory. One is tempted to blame the politicians for their small, parochial minds, but the responsibility goes deeper. Politicians draw from those around them — the newspapers they read, the television shows they watch, the conferences they attend, the lobbyists they listen to, the academics, businessmen and citizens they interact with. Ultimately, we have only ourselves to blame for our parochial thinking.

It’s bad enough when the Mainstream Media imposes a simplistic meta-narrative on the transportation debate (See my column, “Transportation Abomination“), but it’s impossible for the reading public to understand the issues when a daily newspaper as important as the Richmond Times-Dispatch provides misleading coverage like the article that Michael Hardy and Jeff Schapiro wrote today.

The thrust of the story is that support is building among the 12 Senate and House conferees for a transportation plan that looks a lot more like the House version than the Senate version. Here’s how the story starts:

Road plan support builds
Committee leaning toward the anti-tax House version of bill

by Michael Hardy and Jeff E. Schapiro

The compromise on new money for transportation might not be much of one after all.

With most of the 12 negotiators siding with the anti-tax House on roads and rail, legislators are anticipating an up-or-down vote on a plan that relies on $2 billion in borrowing and diverts substantial tax dollars from education, law enforcement and human services.

The anti-tax House? The supposedly anti-tax House approved a transportation funding plan that called for the following statewide fines, fees and taxes: (1) abusive driver penalties, $61 million; (2) diesel fuel tax, $20 million; overweight trucks penalties, $30 million; vehicle registration fee, $71 million. Additionally, the House approved packages of taxes that would allow Northern Virginians to increase regional taxes, levies and fees by $383 million a year and Hampton Roadsters by $209 million. My calculator says that adds up to $774 million in new fees, fines and levies. (Important caveat: Those numbers come from the bill as submitted. It may have been modified along the way. Regardless, those are numbers that the “anti-tax” House approved at least at one point.)

Admittedly, the imposition of new taxes is smaller than what the Senate is calling for, but it’s not what any honest person would call “anti-tax.” Interestingly, Hardy and Schapiro never apply the moniker “pro-tax” to factions in the General Assembly that want to raise taxes even more, even though such a descriptor would be more in concert with the facts.

As for the snarky comment that the compromise for transportation “might not be much of one after all,” it omits the fact that House/Senate GOP package already represents a compromise of factions that hardly see eye-to-eye.

Hardy and Schapiro compound their “anti-tax” label with their trope that the GOP compromise plan would “divert substantial tax dollars from education, law enforcement and human services” — a characterization right out of the Democratic Party talking points. In fact, the GOP would take money from the General Fund surplus, not monies allocated to existing programs, which have been lavished with increases in the 15 to 20 percent range this biennial budget — context that also goes AWOL in their articles. Only in the sense that the surplus funds could have been spent on schools and human services programs, launching their funding into hyper-drive, instead of, oh, say, returning money to taxpayers, could it be said that the GOP tax plan would “divert” anything.

The GOP tax plan is awful — I’ve characterized it as the Transportation Abomination — and I think it deserves to be defeated. But at least I characterize the contents of it accurately. I don’t portray the package as something that it isn’t. I also make my biases plain for all to see. The T-D newsroom still pretends to be objective.

I have been much dissatisfied with the coverage that the Mainstream Media has given the transportation debate. Reporters and editorial writers alike have employed a primitive analytical framework for understanding the issues. By and large, the MSM has depicted the debate as taking place between “Democrats” and “moderate” Republicans on the one hand and “hard core”, “anti-tax”, “obstructionist” Republicans on the other.

As I write in my latest column, “Transportation Abomination” (stealing the headline from a previous blog entry), this schema is largely useless, if not outright misleading. It is absurd to call Sen. John Chichester, R-Northumberland, a “moderate” when he has advocated tax increases that even Gov. Timothy M. Kaine and former Gov. Mark R. Warner, both Democrats, were unwilling to embrace.

A more useful continuum, I suggest, is between the Big Government party and the Small Government party. The Big Government party consists mainly of Democrats, while the Small Government party consists mainly of Republicans, but there are plenty of exceptions in both camps. Insofar as Sen. Chichester and Sen. Russell Potts, R-Winchester, and others consistently support an expansion in the size, scope and funding of state government, they have far more in common with Democrats of like mind than most Republicans. These gentlemen may have sentimental ties to the GOP, but it is their commitment to Big Government that defines them, not their commitment to the Republican Party.

But that’s only part of the story. When it comes to transportation, there’s another continuum that cuts across party lines: a spectrum that runs from Business As Usual (the vested interests who buttress the status quo) to the Reformers (those who insist that institutional change must be part of any comprehensive transportation solution).

Along this continuum, Sen. Chichester has plenty of company among legislators who like things just the way they are: There’s nothing wrong with the transportation that more money won’t fix. Moving towards the middle is Gov. Kaine, who acknowledges that we can’t “build our way out of congestion,” but isn’t willing to spend much political capital in achieving institutional reform. Moving further along the spectrum is House Speaker William J. Howell, who has proposed restructuring the way the state and local governments build and maintain roads, and took considerable political risks to push his vision. At the far end of the continuum are the Smart Growth movement, free marketeers and others who, to varying degrees, call for a total overhaul Virginia’s zoning codes, land use policies and governance structures.

There is almost no overlap whatsoever between the Reform/Business As Usual polarity and the Democratic/Republican polarity. Indeed, members of both parties include both zealous defenders of, and critics of, the status quo.

In my column, I interpret the transportation debate as an interplay between Democrats and Republicans seeking partisan political advantage, between advocates of Big Government and Small Government in a battle over the size and scope of state government, and between various constituencies either defending or attacking the status quo.

Frankly, I did not have the time to carry through this line of thought as thoroughly as I would have liked. But it considerably more helpful, in my humble opinion, in understanding how Virginia has gotten to where it is — with a handful of General Assembly conferees trying to cobble together a legislative package before the session expires — than you’ll read anywhere in the MSM.