Bacon's Rebellion

I’ve been a vocal opponent of Gov. Timothy M. Kaine’s proposal to raise $1 billion in taxes for transportation. And after hearing him address the Virginia Foundation for Research and Economic Education (VA FREE) yesterday, I still oppose his plan. But I believe in giving the devil his due. Kaine made a more lucid case for his tax plan than anything I have read in the voluminous newspaper coverage of the issue. In the interest of elevating the transportation debate to a higher level of discourse, I present his arguments here without my usual commentary.

Kaine’s transportation plan does not hinge upon taxes alone. The Governor acknowledges the need to change the way the system works. Virginia has made good headway in improving the accountability of the Virginia Department of Transportation, and the state has begun connecting transportation and land use decisions. “Five years ago VDOT could not finish a construction on time or on budget,” he said. The Commonwealth Transportation Board could not build a reliable six-year plan — its list of transportation projects bore no relationship to the actual costs of the projects or revenue available to fund them.

Today, VDOT is 1,000 employees leaner and engaging in a round of facility consolidations that will make it even more efficient. The number of projects coming in on time and on budget has reached roughly 90 percent. And the projects listed in the state’s six-year transportation plan, though sharply curtailed, are at least realistic.

As for land use, Kaine said, “We will have more discussions about that next year” — presumably in reference to legislative proposals submitted by the House of Delegates but not acted upon in the September transportation session.

Even with all those reforms, Kaine contends, the transportation system needs more funding. One of the core revenue sources, gas taxes, has been flat since 1986 but construction costs have escalated steadily. In “a growing, thriving state with population growth … the only way to solve our challenges is to find more revenues. … You cannot have an ‘A’ system on a ‘C’ revenue stream.”

The question then becomes: Where do the revenues come from? Kaine does not want transportation to “compete with” schools, health care and other General Fund priorities. Transportation needs its own dedicated revenue sources. Kaine proposes to raise about $1 billion a year through “user based” taxes — on auto insurance, car registrations and auto titling, supplement by abusive driver fines. A competing state Senate plan would rely primarily upon a wholesale gasoline tax.

In setting new tax rates, Kaine compared current Virginia tax rates to those of neighboring states. In most cases, our taxes are lower — often significantly lower. Our 17.5 cent-per-gallon gasoline tax compares to $.30 in North Carolina, $.22 in Washington, D.C., $.245 in Maryland, and $.21 in Tennessee.” Only South Carolina, at $.16, is lower. There are similar discrepencies in the auto titling tax, he argues. Bottom line: Virginia can raise the extra $1 billion a year without raising its transportation taxes any higher than its neighbors.

People who think Virginia can solve its transportation problems without more revenue, Kaine suggested, either “don’t understand economics” or are willfully obscuring reality.

Update: Read Michael Shear’s account of Kaine’s speech in the Washington Post. You’d hardly know we attended the same meeting or heard the same speech. Shear focused exclusively on the political elements of the Governor’s speech, especially the implied criticism of the House of Delegates, and totally ignored the substance of his arguments. It causes me to wonder — what else is Shear leaving out of his stories? Which is a scary thought because Shear is less captive to his partisan/ideological prejudices than many of the reporters covering state politics. What are they leaving out of their stories?

If journalists don’t report the substance of politicians’ arguments — as I have done in this post, even though I don’t agree with them — citizens have no hope of understanding the complex issues that confront them.

Note: I have corrected a couple of facts and typos brought to my attention by readers in the comments section.

Fairfax County has hired Vanass Hange Brustlin Inc., a transportation and land development firm, to design two key stations in the proposed Rail-to-Dulles project. With construction expected to begin in early 2007 and end in 2012, the county wants to get this “once-in-a-lifetime opportunity” right. Says project manager Rick Stevens: “The Dulles Corridor is already a busy corridor. With the arrival of the MetroRail at two stations in Reston, we must ensure pedestrian and vehicular access is efficiently maintained and that the desired community character is reflected at each station.”

VHB’s context-sensitive design plans will improve mobility for all modes of transportation and create a series of walkable, pedestrian-oriented environments and unique public spaces, states a VHB press release.

I’m still not persuaded that Rail to Dulles is a justifiable project as currently envisioned and financed, but if it’s going to happen regardless, this is a necessary step. If people are going to use the heavy rail service, planners need to take special care in designing access to the stations.

Kudos to Gov. Timothy M. Kaine for backing meaningful market-based reform of Virginia’s health care system. The Commonwealth of Virginia has joined a federal initiative to stimulate effective market competition in the health care sector by giving citizens the information they need to be effective consumers. The four key measures include:

• Public reporting of the quality of care delivered by health care providers
• Public reporting of the price of care
• Commitment to health information technology standards, and
• Commitment to use incentives for high quality care, competitive costs and consumer choice.

“Health care transparency provides consumers with information and creates an incentive to choose health care providers based on value,”Kaine said in a press release. “It will help Virginians spend their health care dollars wisely when they know their options in advance, know the quality of hospitals in their area and know what procedures will cost. This transparency also will further motivate our health care providers to provide quality care at competitive prices.”

Kaine elaborated briefly on this consumer-driven health care initiative in comments at the Virginia Foundation for Research and Economic Education banquet today. The purpose, he explained, is to create “a health care system that works like a market.” Between the Medicaid program and medical insurance for state employees, the Commonwealth provides health care for one in eight Virginians, the Governor said. The state will use its clout as a buyer to help shape the medical marketplace.

Reforming the health care system is one of Kaine’s top legislative priorities. It is reassuring to see that he has embraced market-based reforms.

Waking up to the threat of global climate change, the giant insurance companies are re-thinking their potential exposure to storm damage along the Gulf and Atlantic coasts — even as far north as New York and New England, where hurricanes haven’t hit for a half century. They’re jacking up rates and raising deducations for houses vulnerable to storm surges and floods. Insurance has gotten so expensive in places that it’s putting a crimp in coastal real estate development. Joel Garreau has the story, “A Dream Blown Away,” in the Sunday Washington Post.

You don’t have to be a believer in the more hysterical scenarios regarding global warming to appreciate the risks that insurance companies are appraising. Almost everyone, even global warming skeptics, agree that the northern Atlantic Ocean is probably entering a lengthy upswing in the frequency and intensity of hurricanes. Coastal development, often underwritten by state and federal schemes to keep insurance affordable, now adds up to trillions of dollars. A string of Katrina-size disasters could prove crippling to the economy.

Coastal real estate developers won’t like it, but any sane person will recognize that we need to begin controlling our risks — now. The issue is especially urgent in a low-lying areas like Hampton Roads, which is incredibly vulnerable to flooding — my elderly parents were delayed leaving downtown for hours on the day before Thanksgiving because a rainstorm had flooded the streets — and lacks the means to evacuate the population in a timely manner.

Higher insurance premiums will provide people the incentive to storm-proof their properties or, better yet, not to develop in areas vulnerable to storms and floods at all. State policy needs to reinforce the marketplace signals sent by the insurance companies.

In a trend that bodes well for the future of America’s core urban jurisdictions, the white people living in central cities are wealthier on average than their suburban counterparts — and the city/suburb wealth gap is actually widening. That’s the conclusion of University of Virginia scholars William H. Lucy and David L. Phillips in their latest research, “Whites Lead Cities’ Income Revival 2000 to 2005.”

The situation is different for African-Americans who, as they increasingly enter the middle class, are moving into the suburbs, and for Hispanics, who are swelling the ranks of the poor through massive immigration.

Write the authors: “This finding reverses the standard belief that most middle and upper-income whites had left cities before 2000 and that white middle and upper income newcomers usually choose suburbs over cities, leaving mainly low and moderate income whites in cities.” The finding also confirms the oft-state contention of fellow Bacon’s Rebellion columnist Ed Risse that Americans with greater financial resources, who enjoy wider latitude in the places they can afford to live, have demonstrated through their decisions in the marketplace that they prefer more compact human settlement patterns.

A driving force in rising city incomes in recent years, say Lucy and Phillips, is the surge in condominium construction. “We believe the condominium construction has contributed to relative income increases in cities, especially for young professionals and middle-aged and elderly empty nesters.”

Note: The authors are tracking per capita income, not household income. Because central cities contain disproportionate numbers of single people, average household incomes may be lower even if per capita incomes are higher.

Photovoltaic solar cells have an undeniable “cool” factor, but they’re not yet ready for prime time in Virginia. An Arlington blogger who goes by “X Curmudgeon” describes the economics of a 14-cell solar array he installed on his roof. The installation job cost him $24,000 — or $22,000 after a federal tax credit. He expects to cut his electric consumption about 17 percent, saving roughly $300 a year at current electric rates. That’s less than a 1.4 percent return on investment.

Of course, the return will increase as electric rates increase, which they surely will do when Dominion lifts its rate cap in a few years. And X Curmudgeon will always have the knowledge that he’s guaranteed enough electricity to keep the refrigerator running in case of a Dominion power outage. But under current conditions, only hard-core greenies are likely to invest their money this way.

However, things may change. Global production bottlenecks on solar units could ease, allowing prices to come down. Likewise, technological breakthroughs could improve solar PV efficiency. Virginia lawmakers still need to ensure that there are no regulatory barriers to widespread adoption should solar PV become economically competitive.

(Hat tip to Ray Hyde for pointing me to this blog entry.)

Parents and citizens in York County have a blog at their web site to monitor the County’s compliance with the School Board-approved changes to policy. Last year some schools were culturally cleansed of Christmas. The change in policy is to make sure that Christmas is observed as a Holiday in public schools.

You can see the latest status reports at http://blog.ycchh.org

This is a very innovative way to spread the word in near real time on any policy issue. Well done York County folks!

Localities on the Virginia Peninsula are facing the prospect of spending millions of dollars to prevent or repair damage from storm water flooding. Floods have been with us since Biblical times, but dysfunctional human settlement patterns makes them worse. As a Daily Press editorial observes, “Nature has its way of dealing with heavy rain.” Some of the rain filters through the soil where it joins underground water tables; run-off gets buffered by vegetation before it enters streams and rivers.

But development has in many places robbed the land of its ability to cope with a deluge. Residential and commercial development has replaced open land with rooftops and asphalt. It has stripped the vegetation that hung on to soil, so it erodes and runs off, clogging streams and rivers. When heavy rains come along, with hurricanes or just big storms, the water backs up. Into houses and apartments, and deep on roads.

Well said. I would observe only that it isn’t entirely helpful to blame “development,” as if all development was created equal. Land-intensive development that paves over thousands of acres of roads and parking lots make the problem of storm-water run-off even worse. Asphalt is impermeable. The more of it you have, the more run-off you have.

Any long-term solution to stormwater run-off should contain at least two elements: (1) new techniques for creating natural, vegetative barriers to buffer the flow of run-off into Virginia waterways, and (2) human settlement patterns that disrupt less land and create less run-off to begin with.

Update: This from today’s News Virginian: “Hayes, Seay, Mattern & Mattern Inc. outlined eight different ways the council could pay for the stormwater management plan approved earlier this year, with each option centered around the same idea of charging property owners based on the amount of impervious surface they own. … A proposal to offer discounts as an incentive to those who improve their onsite stormwater management facilities was met with a more favorable reception.”

A fundamental principle for any tax that pays for stormwater management systems should reward landowners who (a) reduce the area of impermeable surface or (b) improve onsite stormwater management facilities.

Free parking, like free lunch, is not truly free. Someone pays for it, whether they know it or not. Outside of downtown areas, the cost of parking is usually embedded in the price of real estate, and passed along in the form of higher leases, rents and prices for products and services. Donald Shoup, a UCLA urban planner and arguably the nation’s foremost academic expert on parking, estimates that the capital value of parking facilities — parking decks, parking lots, on-street parking — equals that of motor vehicles and roads combined.

“Free” parking has at least two pernicious consequences: (1) by reducing the cost of driving, it encourages people to drive more often than they would otherwise, and (2) by separating buildings spatially, it reduces the number of buildings that fall within the 1/4-mile pedestrian shed of bus and transit stops, thus undermining the economics of mass transit.

As I argue in my column this week, at the root of this problem is the universal practice of local governments to set minimum parking-space requirements for every conceivable land use. Although a free market would provide a lot of “free” parking, it would provide significantly less of it than under the current regime. Yes, thanks to government regulations, American landowners have over invested in parking spaces to the tune of tens, if not hundreds, of billions of dollars, kneecapped mass transit and subsidized traffic congestion!

The very first thing we should do is repeal minimum parking-lot requirements and let property owners make their own calculations of how much parking they should provide. A free market, I suggest, would encourage property owners to devise creative solutions, such as clustering land uses that generate peak traffic demand during different times of the day: apartments at night, offices during the day, shops and restaurants in the evening.

The second thing we should do is embrace emerging GPS satellite technology that will simplify tracking and billing for parking services. Parking managers soon will have the latitude to apply a wide range of creative pricing strategies that will maximize parking-space utilization and charge motorists the full cost of their driving. For this article, I had the opportunity to interview Bern Grush, the visionary founder of Skymeter, a Canadian start-up that has solved the technical problems that had made satellite metering impracticable. Grush is taking Shoup’s academic thinking about parking and figuring out how to apply it in the real world.

Grush has some must-read ideas related to congestion pricing and other transportation-related topics that I will share in due course. For now, make sure you check out “No Such Thing as a Free Park.“

(Photo credit: Richmond parking lot after Hurricane Gaston.)

The December 4, 2006, edition of Bacon’s Rebellion has been published. You can view it in its entirety here. Make sure you don’t miss a single issue and sign up for our free subscription.

In case you’re feeling too lethargic to click the mouse and transport yourself to the Bacon’s Rebellion website directly, here are the columns:

No Such Thing as a Free Park
“Free” parking is like a free lunch: Someone pays, whether they know it or not. Trouble is, the hidden subsidy increases driving and worsens traffic congestion.
by James A. Bacon

Blueprint
Northern Virginia localities have the transportation plan should the General Assembly ever stop dithering and decide to fund it.
by Doug Koelemay

Clueless
Politicians talk about protecting the “American Dream.” What they refuse to tell voters is that the greatest threat to an unsustainable American way of life is… the American way of life.
by EM Risse

William & Mary vs the Cross
Multi-cultural expression is great for everyone — except Christians. The removal of the cross from William & Mary’s Wrenn Chapel is just one more reminder of academe’s hostility to Christianity.
by James Atticus Bowden

Good Government Is Good Business
Virginia may have the top-rated business climate in the country, but lawmakers could make it even better by addressing transportation and making the legislative process more transparent.
by Clayton Roberts

Nice & Curious Questions
Mailbox Ballots: Absentee Voting in Virginia
by Edwin S. Clay III and Patricia Bangs

Lest anyone be misled that our 10:38 AM comment on Jim’s “Zipcar to Invest…” posting of 30 November was meant to suggest Zipcar should abandon its current market focus, let me be very clear:

We support Zipcar’s current focus. Our 10:38 AM post suggested additional markets, not abandonment of the primary one.

We believe strongly that every Alpha Village scale station-area urban enclave served by a high-capacity, shared-vehicle system (e.g. METRO) should have two or more Zipcar-like services.

Our only problem with Zipcars is any implication that Zipcar-like services alone, without Fundamental Change in human settlement patterns – especially in shared-vehicle station areas, will have a major impact on mobility and access.

As Jim’s post and comment suggest, he and I agree on this. We also agree that the existence of Zipcar-like services will enhance the market for more functional, less private-vehicle exclusive settlement patterns as he notes in a comment.

While we are at it let us also note that in functional Dooryards and Clusters, informal and formal individual-vehicle sharing has been going on since the autonomobile first appeared and existed for horses and bigger buggies before that.

“You are welcome to borrow the Expedition to pick up your family at the Airport.”

“We will be happy to pay for gas and insurance to use your Land Rover to go get a Christmas tree and we will bring you back one too.”

“Why don’t our four families pool our resources and get a “second car” that will serve all of us for special trips and in an emergency?”

As Jim points out higher cost per mile are a catalyst for such discussions.

One final note. The sort of take-home-and-plug-in shared vehicles that Larry suggests do exist. So do many other ways to reduce the area devoted to parking vehicles and making vehicles avaliable to those who need them just when they need them.

You have heard this before:

If the total cost of mobility and access was equitably shared these systems would be part of the America’s way of life and the American Dream instead of being fringe ideas for tree huggers.

Appologists for Business As Usual and those who want to profit from dysfunctional settlement patterns will continue to look for nits to pick.

EMR

Reports Chuck Hagee at the Gazette Packet:

Alexandria Transit Company (DASH) has partnered with nearly 40 local businesses to expedite buyers throughout the holiday season. “DASHing Through Alexandria” encourages holiday shoppers to “take the bus and leave the driving to us.” The program’s goals are to help shoppers reduce holiday stress, reduce traffic congestion, and alleviate the endless search for parking, according to the transit company announcement. They believe Alexandria enjoys a competitive edge over many other area shopping venues by offering accessibility by transit.

Good for DASH! Public transit companies need to create a lot more partnerships with merchant groups and real estate developers, and execute a lot more special promotions like this. That they don’t is one of the drawbacks of the public ownership of public transit. If bus companies were privately owned, as they once were, I feel certain that they would promote their services far more aggressively and gain significantly more market share.

While the publicly owned DASH deserves praise for its initiative in this instance, the “DASHing through Alexandria” promotion reminds us what could be possible on a much larger scale.

The automobile industry spends billions of dollars annually in advertising to hype the joys of car ownership (as they have every right to do). By contrast, public transit companies are notorious for skimping on advertising and promotion. As a consequence, publicly owned transit systems fall far short of the automobile industry in validating mass transit as a viable transportation and lifestyle option.

If mass transit is to have a prayer of making a comeback in this country, it needs to be far more aggressive in packaging promotions and advertising its allures. Lovers of mass transit should think seriously about eliminating the monopolistic franchises that protect the weak public transit systems, and start thinking about ways to create strong, well-capitalized private transit companies that can compete for transportation market share.

In anticipation of receiving the Copley medal from Britain’s Royal Society, revered cosmologist Stephen Hawking granted a rare interview this week. He told BBC that “humans must colonize other planets.” That statement generated headlines around the planet. His arguments are sound and you can read them on http://www.cnn.com/ in a story CNN picked up from Reuters.

Before anyone runs out and suggests that Hawking’s position in anyway supports the current NASA / administration view that one nation-state, the US of A, is wise to spend the resources necessary to put humans back on the Moon and then on Mars, let us get four things straight:

1. Hawking correctly points out that eventually an asteroid, nuclear war or some other event (and in the long term the natural life cycle of our Sun) will make Earth uninhabitable. With this position, no scientist disagrees. Every major religion has an escape clause for those who believe in that particular faith, the rest just burn up.

2. Hawking also notes that to get to the nearest potentially habitable planet it would take 50,000 years with current technology. See Fundamental Thesis Nine (No Exit) in Chapter 1 Box 1 and Chapter 23 on sustainability including Chapter 23 Box 1 No Exit in “The Shape of the Future.”

3. Before humans go back to the Moon, we need technology that will get us there in 30 minutes. If humans can develop that technology it will be done here on Earth, not on the Moon or on Mars. This is especially true when the rationale given by the administration to go there is to exploit material resources on these nearby bodies.

4. There is an even bigger issue:

Before US of A taxpayers, or everyone on the planet, expend vast resources to insure survival of the humans species, citizens need to prove they can efficiently and sustainablely manage our activity on Earth. The Earth is the only known planet where human survival is possible under current conditions. Without a sustainable trajectory for civilization, going to Mars and beyond would just be exporting chaos.

Evolving functional and sustainable human settlement patterns here on Earth is a first step. It is still possible if governments, institutions and enterprises would stop distorting the market and the environment for short-term profit.

EMR

Sen. Walter A. Stosch, R-Henrico, a certified member of the Axis of Taxes, will face a nomination challenge in June from a seemingly credible opponent — Joseph E. Blackburn Jr., an attorney and former chair of the Henrico Republican Committee.

The article by Jeff Schapiro and Tyler Whitley does little to illluminate Blackburn’s motives in running, offering only one brief quote: “My opponent proposed to place a 5 percent tax on gasoline, even as it was reaching $3 per gallon. He wanted you to pay another 15 cents per gallon.”

Stosch argued that Blackburn’s challenge is a distraction to the larger challenge of beating Democrats: “Our time could be better spent in preparing for the fall general election. Unfortunately, some folks do not see it that way. They want to engage us in an intraparty nomination battle that will drain precious resources.”

Pretty lame. Stosch has done so little to distinguish himself from his Democratic colleagues in the state Senate that many Republicans don’t see much difference. Blackburn will garner some support simply by inveighing against tax hikes. What remains to be seen is whether he offers a positive vision of governance. If he doesn’t want tax hikes, how does he propose addressing the very real challenges in transportation, education, Medicaid, the environment, tax reform, etc. etc.?

Tax hikes are unpopular in Henrico. But “Just say no to taxes” won’t get you elected. I will be most interested to see if Blackburn can develop a platform as strong as his party credentials.

Cayman Brac, a Caribbean island with a population of 1,822 residents, is installing a pay-as-you-go metering system, Smart Meter, that allows homeowners to monitor their electric charges real time. The goal is to equip consumers with data that will enable them to conserve energy. Reports Cayman Net News:

This initiative is driven by efforts to conserve and reduce electricity consumption, and [Jonathan] Tibbetts, [General Manager of Cayman Brac Power and Light,] maintained that consumers gain valuable insight as to their energy usage, which in turn empowers them to take control of their consumption and ultimately save money.

“Energy conservation is an important global issue that needs to be brought to the forefront of all consumers worldwide,” said Tibbets, who has a Smart Meter installed in his own home. “This has saved me as much as thirty percent off my current bill,” he claimed.

If a tiny Caribbean island can equip homeowners with this conservation technology — manufactured by an American company, APMY Metering, incidentally — you’d think that a comparable initiative would be within the grasp of Virginia utility companies more than 1,000 times larger.

Dominion anticipates that economic/population growth in Northern Virginia will lead to scattered electric power shortages within five years. Dominion’s answer: build a 240-mile electric transmission line of 150-foot tall towers to wheel in surplus electricity from the Midwest — against the vehement objections of the communities whose lands would be traversed and landscapes despoiled.

Why isn’t Dominion actively exploring the conservation option? Smart Meters combined with pricing that charged higher rates during periods of peak demand would encourage homeowners (a) to invest in energy-saving appliances, and (b) shift electric demand to off-peak periods of time. Dominion could save multi-millions in transmission-line construction costs.

Perhaps one reason is that the electric utility industry in Virginia isn’t kept on a short leash like it is in the Cayman Islands. This comes from a December 2003 article in Cayman Net News:

The Cayman Islands Government and Cayman Brac Power & Light Co. Ltd (CBPL) signed a 15-year non-exclusive licence to generate, transmit, distribute and supply electricity to Cayman Brac and Little Cayman, on Wednesday. …

The terms of the agreement are in keeping with the policy announced by government earlier this year that no more exclusive licences would be issued in the electricity sector, and that new licences would not exceed 15 years in duration. (My italics.)

Maybe 15-year, non-exclusive licenses would encourage Virginia power companies to be a little more creative in their thinking.

(Hat tip to Larry Gross for pointing me to the Cayman Net News.)