Bacon's Rebellion

There is a very good profile of who really profits from knee-jerk, political pandering over the New London case on the front page of WaPo today. “The Last Handshake Deal: Southeast’s Old-School Landlords Make their Exit–and Money–as Developers Swoop In.”

Also in today’s WaPo there are stories on the front page of Business (“Deal Would Swap Land for Hotel Site”) and on page three of Metro (“Alexandria Buys 2 Waterfront Properties”) about attempts to upgrade urban fabric where the public’s cost is significantly increased by the shadow of New London case over reaction.

There are thousands of acres of land in the Virginia and hundreds of thousands of acres in the United States within the Clear Edges of New Urban Regions where transition to new uses would benefit exiting and future owners as well as the general public. Raising the price of these transactions benefits primarily lawyers, agents and denizens of places like the Nexus Gold Club strip joint.

No one in their right mind would argue that the existing municipal governance structure does not need Fundamental Change if there is to be fair, open and equitable use of eminent domain. Let us focus on making those changes: Move the level of decision to the level of impact; Create open processes within a governance structure that reflects contemporary human settlement patterns.

Knee jerk political pandering and property rights uber alles vis a vis the public interest obviously just makes matters worse.

It is just that many good opportunities to evolve functional settlement patterns are lost? No.

Is it just a matter of dollars and the need to raise taxes to pay for lining the wrong pockets to achieve positive change? No. (Recall that Southeast revitalization did not start by itself, it required hundreds of millions of dollars, much of it direct or indirect public expenditures that tax payers will foot the bill for.)

There is a bigger (regional) reality: For every acre within a half mile of a shared-vehicle transport system station that is converted from parking lots and boarded up buildings (see WaPo photos) we do not need to develop 200 acres of Countryside and build five miles of roadways.

That is not all. When gasoline hits $7.00 a gallon, the human settlement patterns that result will still be functional: Citizens and their governments can achieve mobility and access; Shelter will be affordable and accessible.

If we make the transition of vacant and underutilized land to viable settlement patterns (ones that constitute Balanced Communities in sustainable New Urban Regions) easy, fast and fair, the cost of dwellings and economic opportunity space will not be just accessible, it will also be less expensive. (See “Wild Abandonment,” 8 September 2003 at db4.dev.baconsrebellion.com

EMR

I’ve had a very good run here at Bacon’s Rebellion, but I’ve decided to strike out in a new direction. I have agreed to join Chad Dotson full-time over at Commonwealth Conservative. This is my last post as one of Jim Bacon’s “wonks.” That word–“wonk”– may be at the crux of my decision. I’m more of a commentator on the passing scene than a “wonk.” I believe my style is better suited to Chad’s blog. I’ll try to enhance what he already does so well.

Jim Bacon has been great to me and I want to express my thanks for all the help and support he has extended me over the years. Jim has been a visionary in both print and online media in Virginia and beyond. This blog is a unique resource because of his vision.

My Rebellion colleagues and readers have also been great. I’ve learned so much from all of you, even when you got me hot under the collar.

I know I’ll be linking to the good stuff that appears here and I’ll continue to roam the comments section.

Thanks to all … and, to paraphrase Professor Sabato, “blogging is a good thing.”

Today’s WaPo has a story on the front page of the Metro section about population change over the past five years. Virginia is the 7th fastest growing state, several Virginia counties are among the fastest growing in the United States. The story is a landmark in one sense, a continuing disaster in another.

For the first time in memory WaPo focuses on population growth and not on percentage population growth. That is a real and important landmark.

On the other hand WaPo quotes those who reinforce the unfounded myth that more people means more congestion. More population means more transport congestion only if the newcomers are forced to make bad location decisions by government policy and by the distorted, subsidized market that drives “Business-As-Usual.” See “Five Critical Realities That Shape the Future” at db4.dev.baconsrebellion.com.

Virginia and the National Capital Subregion need to use the surge in jobs and population to evolve Balanced Communities in sustainable New Urban Regions. Current trends disaggregate settlement patterns and enhance dysfunction in mobility, access and shelter.

The problem is not a lack of space for more people inside the Clear Edge, at least not at the levels projected for the next 50 years. The problem is that when the current binge is over there will be no economic leverage to reconfigure human settlement patterns. Citizens, enterprises and agencies will not be able to afford – economically, socially or physically – the resulting dysfunction.

EMR

While Virginia’s General Assembly and some three dozen other state legislatures wrestle with the implications of the Supreme Court’s decision in Kelo v. New London, BB&T, the bank with No. 2 market share in Virginia, is taking action on its own. The Winston-Salem, N.C., bank has announced that it “will not lend to commercial developers that plan to build condominiums, shopping malls and other private projects on land taken from private citizens by government entities using eminent domain.”

The Supreme Court ruling expanded eminent domain authority historically used primarily for utilities, rights of way and other public facilities.

“The idea that a citizen’s property can be taken by the government solely for private use is extremely misguided, in fact it’s just plain wrong,” said BB&T Chairman and Chief Executive Officer John Allison. “One of the most basic rights of every citizen is to keep what they own. As an institution dedicated to helping our clients achieve economic success and financial security, we won’t help any entity or company that would undermine that mission and threaten the hard-earned American dream of property ownership.”

Now, let’s see if Virginia’s lawmakers have as much respect for property rights as BB&T.

A bill submitted by Sen. Ken T. Cuccinelli, R-Centreville, would limit the use of eminent domain to public utilities and specifically exclude broader applications such as or private development, or an increase in the tax base, tax revenues, employment, or general economic health.

Speaking of the VA Cost Cutting Blog (see previous post), here’s a topic I wish the contributors would address: Virginia’s Standards of Quality. The little-understood SOQs are so complex they make most peoples’ eyes glaze over. The press writes next to nothing about them, and legislators are apparently terrified to touch them. Yet SOQs are one of the most aggressive drivers of government spending in Virginia — and legislators have little control over them.

In a nutshell: The SOQs set the formula that distributes about 90 percent of all state contributions to local education. This “input” driven model sets the staffing standards for the number, ratio and compensation of teachers, aides, guidance counselors, administrators, etc. in Virginia schools, as well as other educational costs. Not only does this statist, top-down system eliminate any staffing flexibility on the part of local school systems, it “re-benchmarks” the standards every two years, adding huge new costs — more than $1 billion each biennium — that must be borne by the state.

This monstrosity runs on auto-pilot. A handful of bureaucrats who understand the SOQ formula crank out the new standards every two years, and legislators are compelled to find the money to meet them. As a consequence, the Governor of Virginia and the General Assembly have little latitude in launching new educational initiatives because the SOQ standards have the first call on any new educational dollars.

I’ve written about SOQs in my latest column, “The ABCs of SOQs.”

For a detailed critique of the SOQs, readers should consult an excellent report by Lil Tuttle with the Clare Boothe Luce Policy Institute, “Education Funding in Virginia: Aligning Dollars to Achievement Priorities.”

The VA Cost Cutting blog is gaining a good head of steam with commentary focused on a subject near and dear to our hearts at the Bacon’s Rebellion blog: cutting government waste and inefficiency. If you like the subject matter we address here, you’ll like the VA Cost Cutting Blog.

It’s not often that the politics of agency appointments find their way into the news, but Daily Press columnist Wil LaVeist has written two fascinating pieces about behind the scenes maneuvering at the Department of Minority Business Enterprise (DMBE).

In his first column, LaVeist wrote of the unceremonious departure of Ed Hamm, DMBE Director in the Warner Administration:

Some black politicians and community advocates in Hampton Roads believe the 60-year-old Hamm, who is CEO of E.L. Hamm & Associates in Virginia Beach, a consulting and engineering company, was disrespected by the “Richmond Connection.”

There’s lots of juicy gossip and speculation.

In a follow-up column, LaVeist puts more pieces of the puzzle together, reporting on possible candidates for the job, including one who was named Deputy Secretary of Commerce and Trade instead. Instead of the “Richmond Connection,” there is mention of shadowy “Richmond folks.” He criticizes the Kaine Transition team for its handling of the situation.

Why is this important? The state is expending an enormous amount of money and effort as it tries to swing more state contracts toward woman and minority-owned businesses, but results have not been impressive. Incoming Secretary of Administration Viola Baskerville was a huge advocate for more minority contracting when she was in the House of Delegates. Now she is in a position where the problem is her “baby.” Others have also been persistant advocates, including Bacon’s Rebellion‘s own CG2.

Will there be more spending to try and raise minority contracting numbers, or will new leadership try different approaches?

The House Finance Committee passed a telecommunications tax simplification bill 15-7 yesterday, according to the Washington Post, but it faces an uncertain future.

A crazy quilt of local taxes would be replaced by a flat 5% tax on all services, including previously untaxed monthly satellite television bills, Internet calling technology and long-distance service. The rub may be the tax on satellite service, which might increase the taxes paid by rural residents who presumably rely more heavily on satellite technology. Citizens with cable might see their taxes decline.

According to a study cited by the bill’s patron, Del. Sam Nixon (R-Chesterfield), “the Council on State Taxation, a Washington research group, that found that Virginia has the highest telecommunication taxes in the country. ” Nixon’s bill must now pass the full House and the Senate.

[I would have linked to the bill, but the legislative site is either down or overwhelmed as I write.]

A number of bloggers on Bacon’s Rebellion have wondered why Gov. Timothy M. Kaine devoted so much time to holding public hearings about transportation around the state. Transportation has been hashed out in innumerable studies and hearings already. Kaine had heard a belly full of talk about transportation on the campaign trail, and he’d posted detailed and well-crafted commentary about the topic on his campaign website.

Did Kaine really expect to learn anything new in the public hearings? Or was the tour really a smoke screen — designed to provide cover for the $1 billion tax increase proposal that he dropped on the General Assembly last week?

In his campaign essay, “Moving Virginia Forward, Reducing Traffic,” Kaine talks about “locking up the Transportation Trust Fund.” He talks about increasing efficiency at VDOT. He talks about using General Fund surpluses to finance transportation projects. He talks about attracting private investment for toll-financed projects like HOT lanes.

But he never, repeat never, talks about increasing the sales tax on automobiles as a way to raise more money. Indeed, he implies that new tax revenues are not necessary.

There are ways to provide additional support for transportation without raising taxes and without putting transportation projects in competition with schools and other general fund priorities.

Tim Kaine never uttered a memorable line like, “Read my lips, I won’t increase your taxes.” He never swore in front of TV news cameras, like his predecessor did, that he would never, never, never raise taxes. S0, I suppose one could argue that his $1 billion proposal doesn’t represent the world’s fastest breaking of faith with the voters.

But I am inclined to disagree. Consider the quote above: “There are ways to provide additional support for transportation without raising taxes.” Consider that Kaine repeatedly said that “you can’t pave your way out of traffic congestion.” Consider the fact that the $1 billion tax-hike package was never part of his campaign platform. Overall, he created the impression — at least with me — that a tax increase was not in the cards.

The cynical interpretation of Kaine’s action is that he hid his intention from the voters simply to get elected. The charitable interpretation is that he was so blown away by the findings of his transportation hearings that he changed his mind and decided that a tax increase was justified after all. Yeah, right.

Which gets us back to those hearings. Why did he hold them in the first place? Did he really need to be told, again, that the transportation crisis is urgent? Did he really need to hear, again, that people don’t like sitting in traffic congestion? My suspicion is that he needed something to justify the tax increases that he’d planned all along. But it’s only a suspicion. I would welcome any evidence that my ellow bloggers could present either pro and con.

It appears that we are heading for another round of traffic congestion multipliers. Two major stories in WaPo on 11 January made it clear why transport congestion will continue to grow. 11 January was the day the Virginia General Assembly convened and what has happened since then shows WaPo had its nose to the ground, or somewhere else.

On the front page of WaPo’s Metro section for 11 January there was a three column story with a headline: “Some Headway Against Gridlock.” The story suggested that several projects are moving ahead and that, because of these projects, 2006 will be the year when congestion will begin to ease.

No one in their right mind would could say with a straight face that The I-95 / I-495 / I-395 “Mixing Bowl” (to be completed in 2007?) the rebuilt Wilson Bridge (to be completed in 2009?) and the proposed Intercounty Connector in Maryland (to be started in 2008?) will reduce traffic congestion or improve the lot of “commuters” in the National Capital Subregion in 2006. But WaPo and the politicians they quote say just that. What is more they will never improve regional or subregional congestion. See “Self Delusion and Fraud,” 7 June 2004 at db4.dev.baconsrebellion.com. As the Houston New Urban Region data shows if they had built more roadways 10, 20 or 30 years ago congestion would still be about the same but the potential of fixing the problem would be less likely.

We wonder how many who read the WaPo headline or story will say:

“With all these new roadway improvements being completed it is time for us to move to Western Loudoun where our house cats can roam free on our five acre farm.” [The Christian family said just that some time ago and the story of their cat Cody’s untimely end made the front page of WaPo on Monday, 9 January]

How many will say:

“Wow, they are getting the I-95 bottle neck fixed! Lets sell out here in Arlington while the market is still hot and move to that nice New Urbanist place in Caroline County we have been reading about for two decades. We will have to drive four time as many miles but with the new roadways, No Problem.” [The story of how Haymount in Caroline County is yet again getting underway made WaPo on 27 December 2005.]

Hold those thoughts while we look at the other big story on congestion in the 11 January issue. This is on the front page and has a headline: “Va. Set To Open Assembly Today: Improving Transit Likely to Be Priority.” More good news for those who are expect or believe that “government” can “solve” the National Capital Subregion’s (and the Commonwealth’s) mobility and access crisis!

When you read the front page story you find it is about finding more money for “congestion busting projects” like the ones mentioned in the Metro story.

We will say this just one more time until after this (“The Devil’s Dance”) session ends:

More money for more projects will not solve regional or subregional congestion. More money will at the very best relieve specific bottleneck congestion in a specific corridor but only for a short time. That is what has been happening for forty years and that is what will continue to happen until municipal, state and federal agencies adopt a new strategy that creates Fundamental Change in human settlement patterns.

Our first three columns at Bacon’s Rebellion written following the defeat of the November 2002 sales tax referenda (“What’s Next?,” “Wrong Solution, Wrong Problem” and “Too Little, Too Late”) outlined the parameters of solving the mobility and access crisis and nothing has changed in over three years. More money is not “the” solution. More money is not “a” solution until there is a better strategy of how to spend money.

No one in a position of authority actually says “generating more money will solve the problem” but everyone acts as if this gem of conventional wisdom has validity.

When the topic comes up, the leaders in the development industry sit in stoney silence. They send NVTA out to flog for more money for road projects to open new land for development but the leadership of the development industry including bankers and managers of real estate investment trusts, never address the fact that projects of the wrong kind in the wrong location just generate more demand that cannot be met by building more roadways.

The development industry has access to facts and data that demonstrate the futility of just building more transport facilities. They hope that just avoiding the whale on the beach will do the trick for another development cycle.

The road building industry – contractors, aggregate and asphalt suppliers, etc.) has no alternative but to ignore reality and lobby for more roads, otherwise their businesses will shrink, not grow.

Civil engineers are in the same boat as the road builders. In private they acknowledge that more money for more roadways will keep them busy but will not reduce regional or subregional traffic congestion.

In other words, the interest groups who have the information and experience to understand the futility of the more money approach and politicians who live from election to election leave it to pundits and hired PR guns to carry the load. These participants in the “debate” have never built a cluster, much less a neighborhood, village or community. They are “experts” on settlement patterns only because they live there. Some have land to sell, most are blinded by ideological perspectives unrelated to the common good.

Those who say there is no way to:

Make a connection between land use and transportation, or

Distinguish between functional and dysfunctional human settlement patterns, or

Determine the full and true costs of location variable goods and services, or

Achieve a balance between transportation system capacity and settlement pattern vehicle travel demand,

Have all the credibility of Cyrano de Bergerac running around The Hall of Mirrors shouting “I cannot find my nose.”

Advocates for Business-As-Usual cannot “see” or “understand” because to do so would undermine their arguments for their own narrow self interest including being paid to obfuscate reality. Consider those who advertise and lobby against mine safety, pollution control, food labeling and political contribution limits or those who advertise and lobby for smoking / alcohol consumption by teenagers, violent video games and scattered urban land uses.

In our last post (“WHICH BUS, GUS”) we considered the futility of simple, short term solutions.

The current Kaine and Senate “solution” packages demonstrate the dangers of another approach the “Omnibus Solution” which is also less than a Comprehensive Solution. A Comprehensive solution embraces Fundamental Change in settlement patterns and Fundamental Change in governance structure.

What is the difference between the “simple solution” and the “Omnibus Solution?”

The “simple solution” (Spend Money on Roadways, Buy more Buses, Build BRT lines, Create HOT Lanes with public-private partnerships, etc.) make some happy and others mad. Omnibus Solutions such as those floated by Governor Kaine and Senator Chichester purport to have something for everyone. They give the impression that somewhere in this pile of manure there must be a pony. Among all these actions, taxes and fees something will “solve” the mobility and access crisis. They achieve a critical mass of support and result in “something” getting passed.

If something does pass, the response from citizens will be: “Let’s move to a five acre farm in Loudoun County or West Virginia,” or “Let’s move to a cute village in Caroline County.”

Kaine says: “We don’t need any more studies.” He is only partially right. We need to understand why some current studies appear to justify building roads. The reason, as noted last week in our post “THE SHORT TERM FIX FOR KAINE,” is that these studies rely on cooked numbers for the projected traffic demand. They do not consider the full impact of currently planned and zoned but not yet built land uses. This potential demand becomes a reality when citizens believe there is fix in sight due to an Omnibus Solution.

The biggest problem with any Omnibus Solution, be it Kaine’s, Chichester’s or the pending one from the House of Delegates, is that it will be 15 years before it is clear to most citizens that it did not work.

Back in 1986 we worked hard to support the Baliles Tax Package. We did not fully understand until 10 years later that raising the gas tax without Fundamental Change in human settlement patterns was only a Band-aid. It was a Band-aid that masked a deep infection that now needs radical surgery, not just a bigger compress.

There is reason to support a gas tax increase and other levies that will raise the cost of making the wrong mobility choices as Jim Bacon has noted. But money is not the issue until there is an intelligent place to spend the money.

So for one last time: No! No more money! No more money until we grow up and understand how to spend it.

And what does WaPo say today? On Page One of the Metro section: “Va. Plans Costly but Could Ease Commutes. See “The Commuting Problem” 17 January 2005 at db4.dev.baconsrebellion.com.

(NB: This post was edited for clarification 10:50 PM 22 Jan 2006)

EMR

Help me out if I am missing something. A few weeks ago when Tim Kaine was running for Governor, did he promise to raise taxes (and fees which are taxes)? I missed it.

I saw TV commercials in Tidewater where he talked about cutting taxes in Richmond. There was a blow up when the Kilgore campaign said Kaine cut the rate in Richmond, but not the actual dollar amount of taxes and the Kaine folks protested – no he cut taxes.

I remember when Gov. Warner swore up and down he wouldn’t raise taxes – and then proposed we raise our own taxes in 02 and got the RINOs to support his largest tax increase in Virginia history in 04. Good politics, bad for integrity.

So, where did I miss that Tim Kaine ran on an increasing taxes platform?

On Tuesday, 17 January we posted “NEW AND USED MOBILITY IDEAS IN CONTEXT” on this Blog. Jim Bacon raised several questions to which we responded that evening. Bill Vincent, in his response to our attempt to answer to Jim’s questions concerning Bus Rapid Transit (BRT) shared-vehicle systems, raised several points that deserve further consideration.

First, we are pleased that Mr. Vincent agrees with the need to evolve fundamentally different and more functional human settlement patterns. We will return to this point at the end of this post.

After a careful reading of Mr. Vincent’s points it seems we agree on most issues, even if that does not appear to be the case from the tone of his post. We will address details in a moment but first the major difference:

We said “In Curitiba BRT has been so ‘successful’ on some routes that it is now being replaced by “heavy” rail.” I noted this to amplify the point that the native station area pattern and density of BRT is less than “Heavy Rail” (aka, METRO, Metro, Marta or The Tube.)

Mr. Vincent says the lines are not being refitted based on information he gathered in his recent visit to Curitiba. As we recall we read that information in either METRO or Mass Transit , two transit industry publications that we read on a regular basis. A quick search of their archives does not turn up a citation to that information. What I read (wherever I read it) may have been just a rail partisan’s wishful thinking.

We will take Mr. Vincent’s word that the original and most heavily used BRT line or lines are not being replaced by a rail system to provide more capacity. The fact remains that most BRT systems have less throughput capacity and thus support lower native station-area intensity than Heavy Rail unless it is specially designed to achieve similar capacities and then there is essentially no cost difference between BRT and Heavy Rail.

This brings us to the first point that needs to be made about alternative shared-vehicle transit systems:

Support and opposition of this or that system is a play ground for True Believers.

Those who champion Light rail, Bus Rapid Transit, Trolley, High Speed Rail, Catenary Electric Bus, Horizontal Elevator, Heavy Rail, Conventional (Gus) Bus, Personal Rapid Transit, Vacuum Tube or Commuter Rail all tend to pitch “their system” as the end all and be all for moving people.

That is silly because every one of those systems has a different “native” station area pattern and density. In addition every one of them has a role in providing mobility and access, depending on the station area pattern and density of land use.

In concept all are based on 19th century ideas except for PRT. In addition, all except PRT and some High Speed Ground (e.g. Mag Lev) are based on 19th century technology.

My concern is that instead of focusing on what is important – human settlement patterns – this infighting among shared vehicle system fanatics diverts attention to a side issue. The “which system” question can be sorted out based on facts once a settlement pattern for the New Urban Region and for the Balanced Communities is agreed upon.

The other downside is that the infighting keeps PRT and Vacuum Tube (especially for long distance freight) technology from being given a fair evaluation.

A quick search of the web suggests that Mr. Vincent’s hosts in Curitiba are among the True Believer supporters of BRT and that the detractors cite fundamental differences in settlement patterns as the reason that BRT is not suitable for New Urban Regions in North America. More infighting.

There is another issue that is obscured by inter-system infighting. Every major New Urban Region in the First World with efficient mobility and access – Stockholm, Vienna, Paris, Madrid, London, Toronto, among others with which we are familiar – all employ a combination of systems. London famously has the double decker buses and the Tube but also has added the new Jubilee Line which functions differently than the Tube and then there is the Docklands Light Rail (that is really a horizontal elevator), Commuter Rail etc. Paris has The Metro but also the RER interconnecting with the TGV, etc.

The need to use several shared-vehicle systems is a corollary to a more general axiom: No major New Urban Region functions (or could function) without extensive shared vehicle systems.

For years, Houston, Dallas and Los Angeles were cited as examples of places with no “transit.” That was never true and all three New Urban Regions are now expanding shared-vehicle systems.

The settlement patterns in the Los Angeles New Urban Region were in large part determined by the Pacific Ocean, the Pacific Electric Railway, topography, the size of Spanish land grants, water (or lack of it) and federal land ownership. The reason BRT, Light Rail and Heavy Rail are enjoying more success in the region than detractors projected is that Los Angeles has a higher density inside the Clear Edge than any other major New Urban Region in the United States. “Success” can not be attributed to BRT or any other specific system. As a Left Coast friend noted recently “It is the Settlement Patterns, Stupid.”

Over 40 years ago, Will Owen noted that “there are almost no transport facility solutions to transport problems.” There are only settlement patterns solutions, these are changes that match the pattern of travel demand to the capacity of the transport system.

In the context of today’s mobility and access crisis the important thing to keep in mind is that there are NO SHORT TERM, EASY, OR STOP GAP “SOLUTIONS.” None.

All the systems noted above can be part of a “comprehensive solution” but individually they perpetuated the myth that a “solution” is possible without Fundamental Change. That is also true for the “Omnibus Solutions” that have emerged over the past week which will be the subject of our next post.

Now back to Bill Vincent’s position on Fundamental Change: He agrees that Fundamental Change in human settlement patterns is needed but thinks it will take “generations.”

As the price of oil last week indicates, we do not have “generations” to abandon the current settlement patterns. We may have to toss Ford, GM and all the DOTs off the back of the sled but there is no time for multi-generational evolution.

It is not just an economic impossibility to prop up the current private-vehicle dependent settlement pattern, it is an environmental and social disaster as well. We will explore this reality in future work via PROPERTY DYNAMICS and other vehicles.

EMR

There are many reasons to be appalled at the latest crop of proposals to raise taxes for transportation improvements, but the one that is making me irritable at the moment is the total absence of economic thinking. Both Gov. Timothy M. Kaine and Senate Finance Chair John Chichester have submitted proposals that would raise roughly $1 billion a year — but neither one wants to do it by increasing the gasoline tax. House Republicans don’t want to raise your taxes, just divert General Fund money to transportation spending, but their thinking displays an equal deficit in economic understanding.

The strategy consists of the following: raise revenue from other sources, the more hidden to the taxpayer the better. The idea is to fleece the taxpayer while causing as little squawking as possible.

This is bad policy. If you must raise taxes, then put the burden squarely on the gas tax where it belongs. Make the tax as close to a user fee as you possibly can. At least with a gas tax there is a direct correlation — not a perfect one, but a strong one — between the amount of wear and tear a motorist causes on the transportation system, how much he drives, how many gallons of gasoline he consumes, and how much he pays in taxes. At least raising the gasoline tax encourages people to try to find ways to drive less, thus reducing the stress, at least marginally, on the transportation system.

But apparently this elementary economic concept is alien to our lawmakers. Kaine and Chichester would prefer to raise the sales tax on automobiles. Presumably that would be less objectionable to voters because they could finance their tax payment, along with their car payment, over four or five years! Unfortunately, the same tax rate would apply whether the buyer is a 70-year-old granny who drives 6,000 miles a year or a road warrior who drives 30,000.

That kind of thinking will only keep Virginia on a treadmill: Build more roads to relieve congestion, but do nothing to discourage the relentless increase in Vehicle Miles Driven that causes the congestion in the first place.

(Note: I have revised this post to eliminate ad hominem attacks that I made in a fit of severe grumpiness.)

If Jeff Schapiro and Tyler Whitley at the Richmond Times-Dispatch are right, Gov. Timothy M. Kaine will propose later today a plan to raise nearly $1 billion a year in new taxes to pay for new transportation initiatives. “Capitol sources yesterday said Kaine … favors pushing the tax on motor-vehicle sales from 3 percent to 5 percent, putting it in line with the state’s nickel-on-the-dollar sales levy.” (Read the article here.)

Meanwhile, the state Senate is rolling out its own plan for a tax hike, while Del. Leo Wardrup, R-Virginia Beach, chair of the House transportation committee, has his own ideas about raising taxes. Wardrup’s thinking doesn’t necessarily reflect that of other delegates, but it’s certainly an indicator of pro-tax sentiment within the House.

The only viable political alternative to raising taxes, it appears, is discussion in the House to divert existing revenue streams from the General Fund to the Transportation Trust Fund.

Legislators are willing to consider alternatives to building more roads — building more mass transit! In either case, it’s all about spending more money. Only Gov. Kaine has expressed an interest in addressing a root cause of traffic congestion, the disjunction between land use and transportation planning, but there is little sign that this idea is resonating in either chamber of the General Assembly.

If Kaine is shrewd, he’ll tie his tax hikes to land use reform — pass the entire package, or he’ll veto any effort to cherry pick from it. Otherwise, Virginia will wind up pumping more money into the failed, Business As Usual transportation system without changing anything. The state will continue subsidizing dysfunctional human settlement patterns, and legislators will be back in a few years saying that the billion dollars wasn’t enough.

I suppose I should move on. But I can’t. I’m still hung up on the fact that the reasoning behind the 2004 tax hike was irrefutably flawed — and I’m frustrated beyond words that the voting public could care less. Chronic revenue surpluses since 2004, I’ve argued on this blog, constitute proof to any reasonable person that the tax increases were unustified. But a number of readers have responded to the effect that, “Oh, sure, Mr. Monday-morning quarterback, it’s easy for you to say that now. But no one could have prudently forecast the magnitude of economic growth that created that surplus.”

Well, in fixing some broken links on the Bacon’s Rebellion website, I stumbled across what I had written back in 2003 and 2004. You can call me a lot of things, but Monday-morning quarterback is not one of them.

Here’s what I wrote Dec. 12, 2003, in a column profiling George Mason economist Mark Craine, who had just written a book, Volatile States:

Crain … contends that Virginia’s revenue forecasting process, which filters U.S. economic projections through a state econometric model in a top-down process, is flawed. The model overlooks one major fact: Over the past 30 years, Virginia’s economy has increased 30 percent faster than the U.S. economy. Thus, the forecasts tend to be conservative and result in budget surpluses. …

Virginia’s financial situation is brightening perceptibly month by month. In October, reported Secretary of Finance John Bennett, General Fund revenues increased $83 million above the amount collected the same month the year before, a 10.2 percent increase and well in excess of the 4.6 percent estimate this year’s budget is based on. If revenues continue to exceed estimates by the same margin, the state could find itself racking up a surplus at the rate of $40 million per month — an amount almost equal to the taxes Warner wants to raise.

And here’s what I wrote Feb. 2, 2004, in a column chastising Senate Finance Chair John Chichester for his budgetary doom and gloom.

The Warner administration based the current, fiscal 2004 budget on the assumption that General Fund revenues would grow by 4.6 percent. According to the secretary of finance’s December 2003 monthly revenue report, the administration now is projecting 6.7 percent revenue growth. That means Virginia is on track to run up a surplus of approximately $250 million this year.

Secretary of Finance John Bennett has built equally conservative assumptions into his budget forecasts for General Fund revenues for the next two years. Under a no-tax-increase scenario, revenue growth looks like this:

Fiscal 2005 – 5.3 %
Fiscal 2006 – 5.1 %

These rates of growth represent a deceleration from this year’s growth, even though Virginia, like the nation as a whole, is in the expansionary phase of the business cycle. These estimates also are much lower than rates Virginia experienced during the last economic expansion, which reached levels — admittedly unlikely to be repeated — of 14.7 percent in 1999 and 11 percent in 2000.

However, there is a good chance of seeing better-than-anticipated revenue growth in 2005. In just the past month, economists have revised their growth forecasts sharply upward. The Warner budget for fiscal 2005 is predicated on real growth in domestic product of 3.8 percent. The Conference Board Economic Forecast has projected that U.S. growth could reach 5.7 percent this calendar year, which overlaps six months with Virginia’s fiscal 2005.

In a $12 billion budget, every extra percentage point of revenue growth translates into $120 million. If the Warner administration has underestimated near-term economic growth –- based as it was on now-obsolete information — Virginia could run up hundreds of millions of dollars in unbudgeted revenues over the next two years. Combine that with this year’s mounting surplus, and the state could be staring at $500 million to $750 million additional revenue for the biennium.

I don’t gloat often, but I gotta say, I nailed that one! The 2004 tax hike was based on faulty premises. Those who fail to understand history are doomed to repeat it. Lawmakers are talking about raising taxes again, this time for transportation (see the next post). Their reasoning is equally flawed, as I will argue in future posts.