Bacon's Rebellion

Here’s the latest salvo from the General Assembly battlefield: Senate Democrats this afternoon killed a measure that would ensure that funds raised by regional levies would be spent exclusively in the regions that paid the taxes.

According to an email missive from the Virginia Senate Republican Caucus, Sen. Creigh Deeds, D-Bath, led Democrats on the Privileges and Elections Committee to defeat the measure proposed by Senator Ken Stolle, R-Virginia Beach. It failed by a single vote, despite unanimous Republican support.

Stolle’s measure would have initiated the process of adopting a constitutional amendment that would establish a “lock box” for regional transportation funds. Without a constitutional guarantee, future legislatures could divert the funds for any other purpose. Said Stolle: “Without this constitutional protection, taxpayers have no assurance that the measures we pass will do what we say they will do. This vote today does a great disservice to those who want to find solutions to our transportation challenges.”

I have to agree. I’m sure the Dems offered some fig leaf of a reason for blocking the measure, desperately needed to retain trust, and I’ll report it when I come across it. Until then, I find this action unfathomable.

Update: OK, here’s the story (as I understand it). Deeds blocked the Republican version of the lockbox measure in order to submit a substitute bill. That bill added some clarifying language regarding regional authorities but otherwise preserved the intent of the original. States Peter Jackson, with the Deeds campaign: “I think it’s worth noting that the same day Stolle expressed such outrage at Senator Deeds in that missive from the Senate GOP, he voted to advance the McEachin/Norment bill to the floor.”

If that’s the case, I have to ask, what was the purpose of the email salvo?

Speaking of Deeds, he’s offered a couple of interesting bills: one an income tax credit to employers whose employees enter into flextime scheduling agreements that allow them to avoid rush hour commutes, and a tax credit for employers to conduct a telecommuting assessment. Encouraging flextime and telecommuting are good things. But there must be another way to spread those practices. The state tax code is riddled with too many tax credits already.

The following was submitted by Ron Utt of the Heritage Foundation and the Virginia Institute for Public Policy:

As the state legislature convenes in Richmond this June in a special session to revise Virginia’s recently enacted surface transportation program, a number of elected officials – ranging from the legislature’s Republican caucus to the Attorney General – have recommended that the state conduct an independent, comprehensive performance audit of the state’s transportation operation to determine areas of deficiency, improve program management, set clear goals and measures of accountability, and develop a plan to reduce traffic congestion. Such a performance audit was completed in Washington state in 2007, and the Idaho legislature is contracting with private consulting firms to conduct a similar audit in 2008.

Among the many findings from Washington’s independent performance audit were problems related to the large number of overlapping government bodies that had some responsibility – and some portion of the resources — for some facet of the state’s (or region’s) transportation policy. This balkanized system of responsibility, in turn, made it difficult to devote the combined resources of government to solving transportation problems, coordinate responses, or – most importantly — to hold any of these many public entities accountable for successes and failures.

In the event that Virginia agrees to conduct its own independent performance audit of the state’s transportation system, the auditors will quickly discover a mother lode of more than a dozen overlapping, costly, and redundant government transportation bureaucracies spending vast sums of taxpayer money in pursuit of contradictory – and often counterproductive — transportation policies and projects. Indeed, Northern Virginia may very well have the most confusing and redundant collection of transportation bureaucracies in the Nation.

A good place to start is with the Metropolitan Washington Council of Governments and the region’s metropolitan planning organization – the National Capital Regional Transportation Planning Board (TPB). Members of the Board (and overseers) include five northern Virginia counties and five incorporated cities, as well as the District of Columbia, three Maryland Counties, and six Maryland pseudo-cities. In addition to these two region-wide bureaucracies, each of the five Virgina counties and five cities may embark upon some of their own transportation policies and initiatives.

Serving as ex-officio member on the TPB are three Federal agencies — the National Park Service, the Federal Transit Administration, and the Federal Highway Administration – and also the Metropolitan Washington Airports Authority (MWAA). Although MWAA has no experience in surface transportation issues, it recently became a major player in NoVA transportation policy when it assumed responsibility for building the Dulles Rail project.

Recently added to this mix is the state government created and empowered (and then Supreme Court disempowered) Northern Virginia Transportation Authority (NVTA), whose member jurisdictions are the same as those Virginia entities serving on the TPB. This new transit-oriented focus will be supplemented by the ongoing work of three other Virginia government entities with some responsibility for transit: the Northern Virginia Transportation Commission, the Potomac and Rappahannock Transportation Commission and the Virginia Department of Rail and Public Transportation. The first two are responsible for operating and funding the Virginia Railway Express (VRE).

I know that this is getting confusing, but, unfortunately, there are still a few more costly bureaucracies floundering around the state and the region, and operating their own competing transportation fiefdoms. Among them is one of the biggest, the Washington Metropolitan Area Transit Authority (WMATA), which operates the Metro and the companion bus system. In the original H 3202, spending priority on taxes raised is to satisfy any debt service obligations incurred by the new NVTA, while each year the VRE and WMATA would have had first claim on the next $75 million raised through H 3202’s unconstitutional tax scheme. Added to this steaming bureaucratic brew is the Northern Virginia Regional Commission, and the biggest player of all – the Virginia Department of Transportation (VDOT).

Maybe this regional broth of bureaucrats makes sense, but I doubt it, and a perfect project for the state’s Joint Legislative Audit and Review Committee (JLARC) and/0r the Auditor of Public Accounts (APA) would be to conduct a comprehensive financial audit to identify what it is that each of these taxpayer funded entities does, determine how much in administrative costs is required to keep them in operation, and provide an inventory of all personnel, as well as their salary and benefit packages. Such information would be a valuable supplement and assist to the independent performance audit that Virginia should conduct, and would also serve to inform taxpayers of the service tradeoffs incurred by big bureaucracies. For example, if the average Virginia pot hole costs $200 to fix, and if the average bureaucrat in any of the above named entities earns $80,000 per annum, then the public cost of each redundant bureaucrat represents 400 unfilled pot holes on Virginia roads. Think about it.

(Cross-posted at Tertium Quids)

There’s a very interesting story lurking within Len Gilroy’s column, “Another One Bites the Dust.” Gilroy tackles the idea that privately financed public-private partnerships are a bad deal for motorists because the private sector can’t avail itself of tax-free bond financing like state and municipal governments can.

In the last few weeks, the Pennsylvania Turnpike Commission issued $177 million in tax-exempt bonds at a 4.89 percent interest rate. Transurban, the major investor in the Interstate 495 HOT lane project, went to financial close earlier this month on $589 million of 40-year, tax-exempt bonds with an average interest of 4.97 percent, and $587 million in TIFIA loans at 4.45 percent for 40 years.

Bottom line: Transurban has a lower cost of capital than the Pennsylvania Turnpike Commission.

How did Transurban get such low financing? Writes Gilroy: “Because private investor-operators can tap into both federal tax-exempt financing vehicles and robust global capital markets, they can structure sophisticated financial arrangements at highly competitive rates that can neutralize the public financing’s supposed advantages.”

As the special session convenes today, the General Assembly has got transportation on the brain, and so do we at Bacon’s Rebellion. Indeed, it’s pretty much transportation and land use from start to finish for the June 23, 2008, edition of Virginia’s preeminent public policy e-zine — with a dash of other topics to keep things from getting monotonous.

(Don’t miss a single issue of the e-zine. Subscribe for free — just click here — and have it delivered to your in-box.)

The War on Sprawl
Andrew Jackson had his “kitchen” cabinet. Tim Kaine has his “sub” cabinet: five secretaries whose job is to marshal state resources to promote smart growth.
by James A. Bacon

Finding Common Ground
There is no other way to conduct the public business successfully. Let us hope that the lawmakers convening in Richmond today take heed.
by Doug Koelemay

Shaping a Functional and Sustainable Future in Greater Warrenton-Fauquier
by EM Risse

Another One Bites the Dust
Another toll-road myth — that governments can access cheaper infrastructure financing than the private sector — has been demolished. The proof? Transurban’s experience in Northern Virginia.
by Leonard Gilroy

A Transportation Reform Agenda
A comprehensive solution to transportation in Virginia requires a lot more than raising taxes and spending money. We have to change the way we fund and administer roads and rail.
by Michael Thompson

On the Eve of Battle
Republicans are bracing for a confrontation this week over transportation taxes and spending. Here are the thoughts, extracted from the first Tertium Quids podcast, of some GOP leading lights.
by Norman Leahy

Richmond vs. Charlotte: an Update
Charlotte, N.C., snarfed up Richmond‘s big commercial banks in the early ’90s, a coup at the time. Fifteen years later, the sub-prime fiasco is pinching Richmond, but it’s putting the Tarheels in a world of hurt.
by Peter Galuszka

Audit Time
Before jacking up taxes and throwing money around, let’s audit the plethora of Virginia transportation-related agencies and authorities, define clear goals and set priorities for spending.
by Ron Utt

Power Surge
Big increases in electric rates are all but inevitable in Virginia. Consumers need to be educated about their options before they get shocked by their electric bills.
by Barbara Kessinger

Nice & Curious Questions
Finding Felons in Virginia: Bounty Hunters in the Commonwealth
by Edwin S. Clay III and Patricia Bangs

My last post generated considerable e-mail traffic from members of the VCU community and I learned of a faculty meeting on June 19 to discuss it. Uninvited, I went to it and was allowed to stay if I respected the participants’ desire for confidentiality. Here are excerpts from a post I did for R’Biz on richmond.com:

Virginia Commonwealth University could risk its national reputation among scientific researchers, its ability to win research grant money and its credibility in the local community if it continues with secretive research agreements with Philip Morris USA, a group of VCU faculty discussed at an on-campus meeting yesterday.

Eighteen faculty and researchers came to the meeting at the Student Commons building to discuss concerns stemming from a “research service agreement” that VCU entered into in 2006 with the locally-based tobacco firm. The terms of the agreements forbid discussion about the contracts and require VCU to immediately alert Philip Morris if the news media asks about them.

The existence of the research contracts was revealed in a front page article in the New York Times last month, touching off a controversy about the manner in which VCU conducts research. Since then, VCU has been castigated by experts from other research institutions across the country and among informal blogs linking the VCU community with other scientists. VCU President Eugene Trani says that the agreements are not basic research but are commonly-used consulting agreements. According to Trani, the secrecy and special conditions involved with the contracts are necessary because of proprietary material involved.

At the meeting, the faculty discussed rumors and fears that seem to be abounding at VCU. It was said that faculty and administrators are so fearful of retribution if they question the tobacco contracts that they have been using their cell phones instead of the university phone system to talk about the matter and have been considering trying to file documents to protect themselves with the university human resources department.

A source of frustration for the faculty, they said, is that they cannot get information clarifying Philip Morris’s relationship or future relationship with several major VCU health projects, including the Massey Cancer Center, the Women’s Health Center and the proposed School of Public Health.

Some faculty involved in community outreach noted that if VCU specialists try to promote health in inner cities or other neighborhoods, their credibility could be compromised. It was pointed out, for example, that if VCU workers try to encourage children at Boys and Girls Clubs not to start smoking, they might have a difficult time if it is known that VCU encourages tobacco funding of its research.

Trani has appointed an internal task force to review VCU’s corporate-sponsored research and prepare a report by Oct. 1. The report will later be sent to the school’s Board of Visitors.

One possible point of conflict involves Dr. Francis Macrina, VCU’s vice president for research, who is heading the investigative committee into corporate funding. Faculty members raised questions about possible conflicts of interest within the review committee. They noted that Macrina is head of the review committee although he oversaw the negotiations of the contracts that touched off the corporate funding controversy.

The research service contracts with Philip Morris involve a total of about $284,000 and involve studies of pulmonary disease and wastewater pollution. VCU provided this reporter with copies of the Master Service Agreement under the Virginia Freedom of Information Act, but refused to provide specific “task orders” that give details about the actual work to be done.

For more details, see R’Biz in richmond.com.

— Peter Galuszka

The NY Time’s Jay Tierney has a good post that is also a useful tonic for what seems to be a creeping Malthusian trend on the Rebellion of late.

He discusses an article by George Mason University economist Robin Hanson that focuses on “singularities,” the stunning advances that have completely transformed the way we do just about everything (think the creation of agriculture and the industrial revolution). Hanson believes we’re due for another such event, perhaps within our lifetimes. What might it be? Hanson thinks it could be intelligent machines (no, not Terminators) that will increase growth 60 to 250 fold over current levels.

It’s all a big guess, of course. But I think it’s a far more likely outcome than the ashen forebodings that are both easy and fashionable to embrace.

In other words: Chins-up, people!

WaPo had an interesting front page “analysis” by Neil Irwin this morning:

“Why We’re Gloomier Than The Economy: Consumer Anxiety Outstrips the Data.”

Earth to Neil: Citizens can Read.

They can read the headlines we noted in the recent post “HEADLINES, HEADLINES.”

They can read the other headlines on today’s front page of WaPo and every other MainStream Media Outlet:

“Iowa Flooding Could Be An Act of Man, Experts Say” and citizens know the era of Corps of Engineer ‘flood control’ providing ‘protection’ is past. They can shoot all the pigs on levies they want but the water will keep rising because the there is no storage area.

“Bush Calls for Offshore Oil Drilling, President Joins McCain in Seeking to Lift Long-Standing Ban” and citizens know Bush, McCain and Car Tax Gilmore all would like to barrow from the great grand children to buy a new belt instead of the addressing the consumption / obesity problem.

Citizens also know the economic data is cooked to make a ‘growth is good’ stew. All the economists MainStream Media quotes are paid directly or indirectly by the Business-As-Usual advocates who thrive on ever-expanding levels of consumption.

Finally, more and more citizens are coming to realize that MainStream Media is also an Enterprise that lives on advertising by those same Business-As-Usual advocates. See THE ESTATES MATRIX

EMR