Bacon's Rebellion

The House of Delegates leadership has announced a legislative package that would dedicate $50 million a year in state funds over 10 years in order to qualify for matching federal funds to upgrade METRO service to Northern Virginia.

According to a press release from the Speaker of the House, the package would dedicate the first $20 million annually of the existing tax on automobile insurance premiums to Metro, and increase the portion of recordation tax receipts directed to localities by an additional $60 million, which would mean an additional $30 million for Northern Virginia.

The funding, says the press release “will support the Metro’s 10-Year Capital Improvement Program, developed to adequately recapitalize the system and keep its assets in a state of good repair.” Legislators provided only the barest of details of what METRO improvements they have in mind.

“These funds will help preserve and expand the commuting options for the citizens of eastern Prince William,” said [Del. Jeffrey M. Frederick, R-Woodbridge]. “Hopefully, as Metro does more to eliminate waste and make their operations more efficient, this investment, combined with the federal match, will help bring Metro into the 21st Century and begin the process of expanding the system to Woodbridge and points south.”

The METRO website says that its $12.2 billion, 10-year capital improvement plan would replace depreciated assets, increase the length of trains from four/six cars to eight, and add 114 miles of rail in multiple projects.

It was big headlines in the Mainstream Media when a coalition of twenty-some Northern Virginia business groups endorsed more taxes for transportation, but no news at all when 19 environmental/ conservation organizations sent an open letter to state lawmakers outlining their consensus position.

Because you didn’t see them anywhere else, I’m summarizing the key recommendations here:

• Reduce travel demand. Existing transportation plans are unaffordable even with additional funding, and should be reevaluated with an eye to reducing travel demand. No more open-ended commitment to endlessly expand capacity.
• Volatile energy prices are combining with a changing real estate market to change the type of transportation investments needed Translation: Developers are designing more pedestrian- and transit-friendly communities. State and local government is behind the curve.
• Performance standards at the state, regional and local levels should include goals to reduce per capita Vehicle Miles Traveled; increase market share for transit, carpooling, biking and walking; and increase the share of jobs and residences within walking distance. Transportation funding should be tied to meeting these goals.
• Evaluate alternatives. A full range of alternatives should be fairly and transparently evaluated for transportation projects, rather than zeroing in on a pre-selected approach.
• Public-private partnerships must maintain public oversight, make the planning process transparent, ensure that the private sector really invests new money, and funds transit alternatives where congestion pricing is utilized.
• Change allocation formulas. More investment for transit, freight rail, pedestrian and bicycle needs. More money for local streets. Less money for mega projects.
• Improve street connectivity. Better connectivity of streets accepted into the VDOT system would reduce the burden on the few large arterials the state can afford to build.

You don’t have to agree with every one of these proposals to acknowledge the vitality of thinking that is taking place. Between the market-oriented House of Delegates and the “smart growth” prescriptions of the environmental/conservation community, virtually every core assumption about transportation policy in Virginia is being called into question. Yet, judging by the news and editorial coverage of the Mainstream Media, you’d never know an intellectual revolution was occurring.

When will those guys open their eyes?

The High School student from Waynesboro could make a t-shirt with these images of Confederate veterans and the Battle Flag.

It would be interesting to see if this is provocative speech.

Tolerance means tolerating things you don’t like seeing or hearing. It means controlling yourself. If schools can’t teach that individual self-control, then what do they teach – Nannyism?

My 4th grade teacher of Virginia history, Mrs. Scharf from NYC, didn’t have problems teaching about the complexity of issues in Virginia during the late Unpleasantness. Of course, that was in the 50s, when schooling was about education more than indoctrination.

Speaking of white elephants (see previous post about U.S. 460), the Virginia Department of Transportation has nixed the idea advanced by STAR Solutions to build an an eight-lane, border-to-border upgrade for Interstate 81 that included truck-only tolls and lanes. Instead, writes Ray Reed with the Roanoke Times:

Transportation planners said Virginia needs to move faster on I-81 by making safety improvements such as more truck-climbing lanes and longer ramps at a few interchanges.

Rail upgrades are part of the planners’ picture, too, with a study led by Norfolk Southern Corp. that could lead to government transportation dollars being used to upgrade tracks on NS’ north-south lines.

The quick fixes don’t change the need to add lanes to I-81, the transportation planners said. The highway is sure to be heavily congested by 2035, with double today’s cars and triple the number of trucks.

Three conglomerates who want to build a new, improved U.S. 460 between Petersburg and Suffolk have submitted cost estimates ranging from $1 billion to $1.5 billion — two to three times what the Virginia Department of Transportation thought it would cost. And all three companies want public money to help defray the costs, Malcolm T. Kerley, chief engineer for VDOT, told the Commonwealth Transportation board yesterday.

Writes Bill Geroux with the Times-Dispatch: “Among the questions Kerley did not answer yesterday was how much of the financial risk the companies had volunteered to bear in case the highway ran far over budget or attracted too few paying customers.

Bottom line: The project cannot pay for itself. It is not economical. One must question whether it should be built.

This is hard news in many ways. It undercuts the hopes of those (like myself) who hoped that toll-financed projects could pay for many of the transportation projects on the drawing boards.

But the news also undercuts those who would pay for such projects through taxes. The beauty of soliciting private bids is that it forces people to take a hard look at the economics of a project. In the case of U.S. 460, either the design is too expensive, or the demand for the improvements is too meager, or insufficient economic value is being created in property aligning the route. If the project can’t pay for itself… if the private sector isn’t willing to assume the risk of failure… maybe the project shouldn’t be built!

Indeed, when the private-sector proposals come in at two or three times VDOT estimates, it calls into question the cost estimates of a lot of other mega-projects. Like the $4 billion price tag on building the Rail to Dulles project — championed by Bechtel, the guys who brought the Big Dig to Boston. Is anyone believing that forecast? How much risk is Bechtel willing to assume on that project?

(The good news: It sounds like the transportation board was asking good questions: Who would assume the risk if the project tanked? Very, very good.)

Sixteen-year-old Steven McDonaldson, who attends Waynesboro High School, has been twice expelled from class and lectured by the principal — for wearing a t-shirt bearing the Confederate battle flag. As the News Virginian reports:

The school dress code prohibits clothes that “reflect adversely upon persons because of their race, sex, color, creed, national origin, or ancestry,” and administrators have deemed the controversial Civil War battle flag to fall into that category.

This is not a case, as in South Carolina or Georgia, where controversies erupted over the state-sanctioned display of the flag on state property. This is a case of an individual wearing a t-shirt in school. Leave the kid alone. He wasn’t misbehaving in any way. Isn’t it time we all stopped hyper-ventilating over this sort of thing?

As many have argued in this blog, the gas tax has its flaws as a vehicle for raising money to fund ongoing roadway maintenance and construction. The flaws will become increasingly evident as Americans shift to vehicles with better gas mileage — or to electric automobiles that don’t consume any gasoline at all. Some, including myself, have argued that Virginia should move to a system that charges automobiles on the basis of Vehicle Miles Driven: The more you drive, the more you pay.

The issue has been this: Does the technology exist to track Vehicle Miles Driven cheaply and unobtrusively? We have an answer: Almost. A Canadian company is developing technology, which it expects to roll out in a year, that will transform the way people think about transportation.

Toronto-based Applied Location Corporation was profiled by Business 2.0 magazine in a list of 11 disruptive new technologies. Founder Bern Grush has created a satellite-based system, Skymeter, for toll collection, traffic congestion management, and pay-as-you-drive insurance. Writes Business 2.0:

He says he’s created an algorithm that corrects for the noise and missed signals to which GPS is prone, especially in urban canyons, so Skymeter can reliably pinpoint a car’s location to within 1.5 meters. Once that becomes possible, cities can start to manage traffic better by charging more for driving during peak times. (London already does this, but with an expensive system of cameras.) “The problem is congestion,” Grush says. “We need to send pricing signals to motorists to drive at alternate times.”

Skymeter is disruptive more for the new economic models it might spur than for what it might displace. For instance, in addition to congestion tolls, it could be used to charge for parking anywhere in a city, even where there are no meters. Or the technology could enable insurance companies to offer better rates to safer drivers, since it records speed, time of day, and driving route. …

Grush thinks his product could ultimately help to supplement or even replace the fuel tax now used to pay for the upkeep of our roads. “The need to fix road financing and congestion is so acute,” he argues, “that a dramatic shift will necessarily occur.”

Virginia is running out of money to maintain its road network. We need to envision a future that abolishes the gasoline tax and replaces it with a tax based on Vehicle Miles Driven, adjusted perhaps for the weight of the vehicle. This tax would cover the maintenance of the road network. As maintenance costs increase (or conceivably decrease, if we outsource maintenance), the tax would adjust automatically each year.

Funds for new construction would come from tolls — ideally, tolls that varied the price according to congestion levels. With such a two-track system, Virginia could ensure that (a) all maintenance costs were covered, (b) that tolls encouraged people to drive during off-peak periods or to shift to carpooling, buses, rail or telecommuting, and (c) that the money for new construction came directly from the people who used the new facilities. We could then turn the conversation from how much money we need, and where to get it, to a more productive dialogue: how best to align our transportation systems with our human settlement patterns.

As lawmakers discuss Virginia’s transportation funding in the soon-to-convene special session, they need to be thinking about the larger context: emerging technologies and new, user-pays transportation-funding models that are sweeping the world.

The stories are flying fast and furious as the General Assembly prepares to convene again to discuss transportation. Among the more significant:

• Congestion pricing pilot project. Garren Shipley with the Northern Virginia Daily writes about a legislative package filed by Del. Chris Saxman, R-Staunton, to authorize a congestion-pricing pilot program. On an interstate yet to be selected, the state would set up variable, time-of-day tolls to encourage motorists to drive less during periods of peak demand. Saxman would make the scheme “revenue neutral” by eliminating the gas tax in the transportation corridor for the duration of the pilot project, and he would allow voters to determine in a referendum whether to make the tolls permanent.
• Tolls for Hampton Roads. Christina Nuckols with the Virginian-Pilot quotes House Speaker William J. Howell as saying that he supports the idea of a regional tolling authority to pay for Hampton Roads road projects. Howell predicts that the idea will pass the House.
• Pilot Pundits Wrong Again. The editorial writers at the Virginian-Pilot are back to form, distorting the transportation debate beyond recognition. “The House’s leadership,” says the Pilot, “prefers a solution that includes almost no new revenue, which makes it no solution at all.” Guys, let me explain something. Tolls = new revenue! Read your own writer’s story!

As veterans of the 2004 tax debate recall, Warner administration officials forecast that Virginia would face chronic budget deficits within a few years. Thanks to the 2004 tax increase — and economic growth — Virginia now may be facing chronic budget surpluses. The magnitude of these surpluses are obscured by the wise General Assembly practice of spending hundreds of millions of dollars in one-time investments — roads, Chesapeake Bay clean-up, mental health restructuring — instead of ramping up spending for ongoing programs. But the surplus of revenue over spending on ongoing programs continues to be large.

Now we’ve entered a new budget cycle, and once again Virginia is running ahead of forecasts. In her August report on state finances, Secretary of Finance Jody Wagner reported that General Fund revenues for July and August 2006 had increased 8.6 percent over the same period in 2005 — double the 4.2 percent increase estimated in the budget.

By way of caution, July and August are not major revenue-generating months. September, Wagner notes, will provide a more reliable indicator of where the budget is heading. However, when legislators meet in a few days for the special transportation session, July/August budget numbers are all they have to go on. Given the chronic, recurring budget surpluses that Virginia has been running since 2004, it is increasingly difficult to make the case that the state needs to raise any more taxes.

As readers of the Rebellion know, we avoid commenting upon electoral mud-slinging and the politics of personal destruction in favor of focusing on the issues. The particular issue that I want to address arises from the much-blogged flap over Sen. George Allen’s ethnic heritage. But I don’t give a hoot whether or not Allen’s grandfather was Jewish, and I’m not interested in dissecting the Senator’s reaction to what he perceived to be a hostile question from television reporter Peggy Fox. I am interested in an insinuation made by Washington Post columnist Dana Milbank:

Fox’s question, while a matter of some intrigue, seemed out of place in the debate, which focused on more urgent matters such as Iraq. But Allen turned on the questioner with ferocity. He may have been irked that the question was a follow-up to one noting that “macaca” was a racial slur that his mother may have learned in Tunisia. He may have been concerned that Jewish roots wouldn’t play well in parts of Virginia. (My italics.)

Now, that’s an interesting statement. What “parts of Virginia” could Milbank be talking about? Could he be referring to Allen’s culturally conservative, red-state constituency of blue-collar bubbas? Is he insinuating here that anti-semitism is a feature of the Virginia cultural landscape? Is not the undertext of that statement that “parts of Virginia” are prejudiced against Jews? Milbanks, it seems to me, may be engaging in some stereotyping of his own.

I wonder if Mr. Milbank would like to clarify his remarks.

There are two bills from Republican Hampton Roads Delegates for the special Transportation session of the GA. (http:/leg1.state.va.us – click on ‘2006 Special 1’)

Delegates Jones, Oder, Iaquinto and Suit (HB5072) have dressed up the failed ’02 Transportation Tax Scam with new funding, Private-Public Transportation Act authority and people-less tolling with congestion tolling.

Delegate Waldrup (HB5091) pulls all the bridges and tunnels across the James and Elizabeth Rivers and The Bay into a Bridge and Tunnel Authority.

Both become unelected Regional Governments – using the exact same wording, but the scope is different.

HB5072, or ‘Back to the Future’ Bill, creates a Hampton Roads Transportation Authority which pulls in 11 Hampton Roads communities (then adds Accomack and Northampton on the Eastern Shore) to build the same projects that were offered in the ’02 referendum that voters rejected.

HB5091, or the ‘Bay Bridge Authority on Steroids’ Bill, creates a Bridge and Tunnel Authority that includes only 9 Hampton Roads communities (- Williamsburg, James City and York Co, + Northampton).

Both omit Poquoson on The Peninsula and Surry, Sussex and Southampton along 460. Good for us.

HB 5072 gets the money with the following:
• Electronic tolling and congestion tolling
• Additional tax each year at registration ($30 for a car)
• One time tax for registering a new car (.0075 = $150 for a $20k car)
• Hotel/motel room tax (5%)
• Rental car tax (2%)
• Dedicates 20 cents on $100 value on state records tax
• The language of the bill says ‘includes’ these taxes. I’m not a lawyer so I don’t know if that prevents other taxes, because it says cities and counties may levy additional fees.
• $25 m of Hampton Roads’ sales and income tax in the General Fund goes back to this authority every year. This bill does not inflict a new sales tax like the’06 Quayle bill did.
• When the Chesapeake-Bay Bridge bonds are paid (09), it becomes a cash cow for this government.

HB 5072 has the same projects as the failed ’02 plan. Interesting because that plan’s own analysis said there would be MORE congested miles of roads in 20 years after the plan is built out than in ’02. (Message again – you will have more miles of congested road in 2026 than in 2006 after you build the plan).

HB5072 doesn’t add tubes to the Hampton Roads Bridge Tunnel. It takes trucks from the Port of Virginia and dumps them on I-64 about 12 miles up from the HRBT. (I believe the rail connection is from the Peninsula too, not Southside to the Port – not sure and the bill doesn’t say.)

Both plans pay the politicians and bureaucrats for serving plus per diem for going to work where they live.

Both plans have this terrifying paragraph, “To the extent funds are made available to the Authority to do so, to employ employees, agents, and advisors, and consultants, including without limitation, attorneys, financial advisers, engineers, and other technical advisors and, the provisions of any other law to the contrary notwithstanding, to determine their duties and compensations.”

Both plans lack an accountable authority for review of policy, plans and the jobs for friends of ‘pols’ paragraph above.

HB5091 puts all the crossings under one administrative and political authority. Reminds me of NYC’s inter-state Port Authority. That will provide a lot of revenue. The bill doesn’t go beyond that – on what to build and maintain with that money – but it includes the authority to do so and “construct or acquire, by purchase, lease, contract or otherwise,highways, bridges, tunnels, railroads, railroad facilities, and other transportation-related facilities.” It’s not clear if this would include building up the 460 corridor or widening I-64 up in The Peninsula.

Two very different plans.

Putting all the crossings under one authority for revenue – like the Bay-Bridge is now – is fine with me. Giving that authority the planning power to build projects worries me.

I don’t get why another layer of government is needed for either. The Governor and the GA have all the authority they need to set a priority of projects, fund and manage them.

Speaking in the coalfield burg of Norton, Gov. Timothy M. Kaine unveiled yesterday a “Return to Roots” campaign that aims to reach an estimated 15,000 Southwest Virginians who graduated from high school during the past 20 years but left the region. The program, according to the Bluefield Daily Telegraph, will try to reach the alumni through a website, direct mail and the news media to inform them about new employment opportunities that exist today in Southwest Virginia.

“I think it’s a pretty smart strategy,” Kaine told the Daily Telegraph. “The idea of course is we want to recruit good people for these jobs.”

Kaine said the 15,000 plus alumni now scattered out across the nation already know Southwest Virginia is a great place to live and work. The campaign simply aims to reach them, and encourages them to return home.

Kaine said Southwest Virginia is seeing an increase in job vacancies with improving employment rates. For example, Kaine said just last year more than 700 information technology jobs were created in Russell County.

“They (the alumni) are a little bit everywhere,” Kaine said. “It can be hard to find them. But most high schools have reunions. Many of them can be reached through alumni associations and high school associations.”

This initiative is another positive sign that SW Virginia is thinking very differently about economic development. (See “Broadband and Nature Trails.”) The region is investing in higher education through new schools of law and pharmacy in Grundy. It’s investing in nature trails and heritage trails to attract visitors. It’s building a broadband infrastructure. And now its reaching out to alumni.

If there’s one group of people that know, love and have reason to move to SW Virginia, it’s the sons and daughters who left. With their family roots in the region, they have greater reason to settle there than anyone else. I don’t know how well this campaign will work — success will depend in part upon the execution — but it’s clearly a move in the right direction. In the Knowledge Economy, economic development is all about the development, recruitment and retention of human capital.

The House Appropriations Committee had its chance yesterday to question John Bennett, Mark Warner’s Secretary of Finance, about miscalculations that led to a $137.2 million error in school funding formulas. According to Christina Nuckols with the Virginian-Pilot:

Bennett, the top budget adviser to former Gov. Mark R. Warner, said he did not know the full extent of the mistake when he left the administration to take a job at Virginia Commonwealth University in January.

Bennett said he incorrectly assumed that state tax analysts would fix the problem during regular revenue adjustments. …

Bennett said he did not tell Warner about the mistake because it represented a tiny percentage of total state spending on schools and he thought it would be easily fixed. Total state aid to public schools exceeds $6 billion annually.

It sounds like a breakdown in communications. What’s not clear from Nuckols’ story is what can be done to prevent a recurrence of such breakdowns. Was the incident entirely the result of human error? Or were the systems inadequate to handle the transition from one gubernatorial administration to the next?

Will anything change, or will it be budgetary Business As usual?

Tourism should play an important role in a balanced approach to economic development in Southwest Virginia. So argues James C. Thompson, chairman of the Thompson & Litton engineering firm, in a column published in the Galax Gazette in response to an earlier column by Jerry Fuhrman (See “Selling Bottles of Water and Granola Bars“).

The average visitor to Southwest Virginia spends $157 per day and stays nearly three days, Thompson contends. He cites the town of Damascus as the “poster child” for the benefits of a tourism-driven strategy. “The Virginia Creeper Trail, with an annual usage in excess of 200,000 and proximity to the Appalachian Trail, has literally transformed the town, lining the main street with locally owned, tourism-related businesses.”

Visitors are financially secure and highly mobile, Thompson argues. “They come from across the country, and many have the ability to conduct their business from any location.” If they visit Southwest Virginia, they may fall in love with Southwest Virginia. By developing tourism amenities and broadband infrastructure, Thompson writes, “we have the potential to create brain gain instead of brain drain by attracting such people to the region to stay and establish businesses locally.”

Thompson is taking a big step in the right direction. In effect, he’s arguing for an economic development strategy based on developing, recruiting and retaining human capital. That’s a radical departure from the traditional emphasis in SW Virginia on recruiting manufacturing (although Thompson makes it clear that he supports that, too — he does, after all, run an engineering firm).

I made the very same argument to the Shenandoah Valley Partnership back when it was a newsletter client of mine. If Thompson’s idea makes sense for SW Virginia, it makes even more sense for the Shenandoah Valley, which enjoys a plethora of charming small towns, old houses and homesteads to restore, beautiful landscapes and, most importantly, proximity to metropolitan Washington. I saw a step-by-step process that would unfold organically over years: (a) use the draw of tourism to get outsiders to visit the region, (b) promote the region as a place to buy weekend-getaway or retirement homes, (c) encourage visitors to settle permanently and start new businesses, and (d) build a new entrepreneurially based economy.

The SVP didn’t bite on my idea, preferring to maintain its focus on industrial recruitment. But it looks like the scenario I described is unfolding all on its own. Whether the idea can work in SW Virginia, far from a thriving metropolis like Washington, is an open question. But the region’s leadership is wise to explore that option.

Patricia Nicoson, president of the Dulles Corridor Rail Association, puts an optimistic spin on the recent decision by Gov. Timothy M. Kaine to pursue the “aerial” option rather than the “tunnel” option for the METRO rail extension through Tysons Corner. Many advocates of the project were dismayed by the decision because running the rail above ground would disrupt connectivity between destinations, making it all the more difficult to redevelop Tysons along the lines of a pedestrian-friendly business district.

In a column in the Reston Observer, Nicoson writes, running the rail line above ground provides a “challenge and an opportunity” to produce “memorable building designs serving as landmarks within Tysons Corner…. Thoughtful design and use of air rights could create a unique urban form at the four stations in Tysons, creating a sense of place missing today.”

A rail line hoisted on pylons need not necessarily interfere with the creation of a walkable street grid or “a public realm of plazas, parks, paths and open spaces.” As Tysons redevelops, she suggests, connectivity can be provided by means of pedestrian bridges.

As a bonus, Nicoson suggests, an elevated METRO line will create a better experience for passengers looking out the window. “An elevated line provides the opportunity to view Tysons as one travels through it, which ought to be an enjoyable experience for riders. … Many are likely to prefer an above-ground experience of rail to descending 80 or more feet below ground in a high-speed elevator to a train station in a tunnel.”

I can’t blame Nicoson for putting the best face on an unfortunate decision, which Gov. Kaine was forced to make or run the risk of losing federal funding for the project. But I’m not sure I’m buying it. As the saying goes, “Puttin’ lipstick on a hog don’t make it purdy.”

Note: See Ed Risse’s response by clicking on “comments.”