Monthly Archives: December 2006

Virginia must be running a budget surplus — lawmakers are pushing for new entitlements. The latest bid to expand the size and scope of government comes from two Republican lawmakers. Never let it be said that Democrats are the only ones who support bigger government.

Senate Majority Leader Walter A. Stosch, R-Henrico and House Appropriations Chairman Del. Vincent Callahan Jr., R-Fairfax have teamed up to push a bill that would create a giveaway program called Virginia Community College Transfer Grants. These grants, explains Matthew Bowers with the Virginian-Pilot, “would pay the difference in tuition costs between students’ two-year community colleges and any Virginia four-year public colleges or universities to which they are admitted.”

Scott Leake, an assistant to Stosch, said the first-year cost to taxpayers was projected at $8 million, with the annual cost increasing to $10 million to $12 million within a few years.

As far as giveaway programs go, this one is modest. For me, it’s the principle of the thing: Legislators approach education much the same way they approach transportation. Roads too congested? Build more roads. College too expensive? Subsidize tuitions. The “solution” is always the same: shovel more money into propping up a dysfunctional system.

In the case of roads, it never occurs to most legislators that instead of endlessly increasing supply to match every increase in demand for roads, they might examine alternatives that would dampen the demand. Likewise, when it comes to education, lawmakers seek to redress the higher cost of higher ed with more tuition subsidies. No one talks about restructuring higher ed to meet its mission at less cost and lower tuitions.

Back in the days of the Allen administration, people did talk about curtailing the growth in the university spending that undergirded the ever-escalating tuition increases. Costs were spiraling out of control back then, too. Gov. George Allen required each university to submit a “restructuring” plan. The idea was that universities, like private-sector organizations, had to make choices. If an institution wanted to invest more resources in one area — life sciences, say, or nanotech — it had to retrench somewhere else.

Private companies continually re-evaluate their product portfolios and lines of business. To finance expansion in growth sectors, they consolidate operations in slow-growth sectors. They shutter outmoded factories. They spin off businesses they’re no longer competitive in. Universities don’t do that. They just grow, grow, grow. When’s the last time you read about a state university shutting down,consolidating or shrinking a department? When’s the last time you read about a state university spinning off an under-performing unit? It hardly ever happens.

Why? Because university administrators can get away with it. Higher education is such a sacred cow that Americans are willing to pay whatever the universities will charge. If tuitions get unaffordable, then colleges jack up tuitions even higher to squeeze students of more affluent families to subsidize students of needier families. Meanwhile, the federal government dishes out more student loans, many of which are never repaid, and state government hands out more subsidies to universities and students alike.

I’m all in favor of making college more affordable to everyone. But what does it have to come at the expense of taxpayers and relatively well-off households? Why can’t higher ed function more efficiently?

Let’s look at some numbers:

1995-2005 Cost of Living Index: 25 %
1995-2005 Enrollment increase in public Virginia colleges and universities: 19 %
Total inflation plus enrollment increase: 44%

FY1999-2008 Increase in General Fund allocation to public colleges and universities: 50%
FY1999-2008 Increase in Non-General Fund budgets for public colleges and universities: 67%

Bottom line: Virginia has increased its financial support for public institutions of higher ed 6% more than the rate of inflation plus enrollment increases combined over the past 10 years for which CPI figures are available. Drawing upon other sources of revenues, primarily tuitions, endowments, dormitory rents, etc., Virginia colleges increased other revenues, adjusted for inflation and enrollment increases, by 23%. In just 10 years!

Affordability of higher ed in Virginia is not a matter of insufficient state support. It is a matter of out-of-control spending — higher faculty salaries, a greater emphasis on expensive technology-intensive disciplines, and god knows what else. If we want our universities to all become polytechnic institutions, that’s fine — but let’s shrink those programs deemed less critical to the future.

Update: Neither the newspaper articles filed by the Virginian-Pilot and the Times-Dispatch — nor my post, which was based upon them — does justice to this issue. Stosch and Callahan lay out their thinking in considerable detail in a press release that I’ve posted online here. I also would recommend consulting a comment to this post written by Scott Leake, an aide to Stosch. New bottom line: This legislation must be viewed in the context of an anticipated expansion of higher ed enrollment in Virginia by 20-25 percent by FY 2012. Question to Leake: Is this bill actually designed to save the Commonwealth money?

House Speaker William J. Howell, R-Stafford, has pledged to commit at least 50 percent of the anticipated $475-550 million, biennial budget surplus to transportation projects. He also said that he would submit a package of proposals, crafted by a special subcommittee set up after the September transportation special session, to align transportation and land use.

Additionally, the Speaker said the House will introduce legislation “designed to reduce congestion and chokepoints on our roadways, and give hard-pressed localities the tools they need now to manage growth.”

Read the Speaker’s press release here.

I will withhold comment on the House legislative package until I see the details. Agree or disagree with the House reforms, however, no one can deny that they aren’t meaty and ambitious. I will do my best to cover the substance of the debate as it unfolds.

As an aside, I will track the Mainstream Media commentary, which I anticipate will continue to follow the meta-narrative defining the transportation crisis as a purely fiscal phenomenon, as if no other institutional reforms were needed. Maybe one day the capital press corps will be shamed into covering the debate in all its many facets.

Any comprehensive approach to transportation in Virginia must include aggressive use of public-private partnerships. Not only can the private sector tap private sources of capital, making it possible to build road and rail projects the state can’t afford, but the discipline of the marketplace improves the odds that projects are built only if they are supported by real-world demand — not because developers and land speculators have lobbied for them. If the state builds a road with tax dollars and bets wrong, no one is held accountable. If investors bet wrong, they lose their shirts.

Virginia knows a lot more about public-private partnerships today than it did in 2002 when it opened the Pocahontas Parkway, an 8.8-mile road that connects Interstate 64 and Interstate 295 southeast of Richmond. The justification for the project was economic development: The road would make the Richmond International Airport more easily accessible, and it would open up eastern Henrico County to development. But demand for the road didn’t materialize. Revenues fell far short of projections. The way the deal was structured, the state incurred increasing liabilities for operations and maintenance. Even payments to bond holders were in doubt, reducing the bonds to junk status.

This May, the Kaine administration completed negotiations with Transurban, the Australian infrastructure company, to take over operation of the Parkway in a 99-year lease. The state recouped $27 million in public funds and got off the hook for $225 million in maintenance and operations expenses over the life of the project. Most important of all, finances are back on a sound footing. We don’t have to worry now about a Pocahontas Parkway default spewing radioactive fallout over the debt of all present and future public-private partnerships.

Peter Galuszka has the story here: “Close Shave.”

I derived two lessons from the story:

1. Distrust transportation mega-projects justified on the basis of “economic development.” Such projects win the support of broad constituencies, who don’t have to pay for them, on the basis of vaguely defined benefits, which may not materialize. Projects not subject to market discipline are more likely to fail.
2. Properly appraising risk is critical to making these projects work from a taxpayer perspective. The state is far better protected financially in the restructured Pocahontas Parkway deal than it was in the original version. Let’s apply what we’ve learned to the negotiation of future deals — even if it means walking away from projects where the risk-reward ratio leaves the state too exposed.

There’s one other point that bears noting, even if Peter didn’t have the time and space to explore it. Mega-projects like the Pocahontas Parkway cannot be viewed in isolation. They need to be seen as part of a larger transportation system.

One way Transurban intends to make money is to promote traffic along the Parkway. One way to do that is to lobby for new interchanges and encourage new development at those interchanges. One such project is already in the works — a giant mixed use project on the James River proposed by the Wilton development group. Wilton would pay for the interchange. Sounds like a great deal, doesn’t it? Isn’t that exactly what we want — for the private sector to pay for transportation improvements?

Look a little closer. The Wilton project would overwhelm local county roads in eastern Henrico County. County planners anticipate the need to upgrade the secondary road network. In particular, county planners want to build a so-called “concept road” that would link the Wilton property with the city of Richmond. Who’s going to pay for that?

Developers building along the planned route of the Concept Road may pay for some or all of the cost through proffers, in which case taxpayers might come out ahead — I’m not prejudging. But building mega-projects in the wrong places doesn’t do anyone any favors if they just create new transportation bottlenecks that need fixing at public expense. This gets us back to Ed Risse’s point about planning balanced communities and transportation infrastructure to serve them. You plan them together. You’re courting trouble if you start by building a road through the middle of nowhere and stimulating development in an area unprepared to receive it.

Bob Gibson, political reporter for Charlottesville’s Daily Progress, opines on the prospects for transportation taxes in the 2007 session of the General Assembly. Traditional wisdom, he writes, says that it’s hard to get new taxes passed in the 46 days allotted to short sessions of the legislature, especially when all seats in the House and the Senate are up for re-election later in the year.

This year, Gibson contends, the pressure to do something about transportation is so intense that the Assembly may well pass a tax without calling it a tax. One possibility is to let congestion-prone regions like Northern Virginia or Hampton Roads impose a regional levy upon themselves — it may be a tax, but it’s not a “general” tax. Another is to pass a mini-tax on the grounds that, “If it’s hidden, or it’s small, a tax is a tax but may not be much of a tax at all.”

A third trick, suggests Gibson, “is to call a tax a toll.”

I take from the tone of Gibson’s column that his intent is to be light and clever, which entails adopting a voice of tongue-in-cheek cynicism. Fair enough. Trouble is, if enough people adopt that voice, they may kill off one of Virginia’s best hopes to deal rationally with traffic congestion.

A toll is NOT a tax. It is a user fee — and that’s not just semantics. A tax collects revenues from people generally and then redistributes it to someone else. Even narrow-bore taxes like the Kaine administration’s proposed auto titling tax would tax citizens generally (all those who purchase cars, regardless of how much, or where, or when they drive) and redistribute it for the benefit of those who drive the most (pushing up maintenance costs) or who drive on congested routes (increasing the demand for new roads).

With tolls, the people who pay for a road are the ones who use it, when they use it — unless, of course, they are Dulles Toll Road commuters, who are being levied to pay for the Rail to Dulles heavy rail project… in which case the toll really is a tax.

A toll is a “toll,” and not a “tax,” when it is either (a) used to pay off the cost of building an entirely new transportation asset, or (b) is used to ration scarce roadway capacity in order to reduce traffic congestion to levels consistent with optimal throughput. In either case, the toll payer is receiving a direct benefit — access to a roadway — in exchange for his money.

As public opinions consistently show, citizens understand the difference. They express greater willingness to accept tolls than transportation taxes because they know that there is a direct exchange of value when they pay tolls, while there is no guarantee of value when they pay taxes. Citizens understand that gasoline taxes often fund projects that benefit no one but developers, land speculators and the politicians in their pockets.

Last night Tim Kaine and his wife sat in the row behind my wife and me at the Westhampton Theater in Richmond, attending a showing of “The Queen.”

The Governor dressed like an ordinary bloke: He wore a tieless, button-down shirt and a leather jacket. That’s one of his more appealing traits. He may be the Governor, but a year on the job doesn’t seem to have changed him. He hasn’t grown impressed with himself — he does the same things he did as Lt. Governor, mayor and private citizen. Over recent years, I’ve seen him pop into a wine store in the Fan, walking alone down the sidewalk in downtown Richmond, and chowing down on hamburgers with the wife and kids at the River City Diner in Shockoe Bottom.

The two central characters in “The Queen” are Queen Elizabeth and Prime Minister Tony Blair, a moderate liberal politician in much the same philosophical mold as Gov. Kaine. When the movie was over and the lights came on, I was tempted to ask the Governor his impression of how Blair was portrayed. But I decided not to: The movie had opened with Princess Diana fleeing the torments of the paparazzi and driving to her death. Even public figures deserve their privacy. Indeed, respecting the rights of people, especially prominent people, to their privacy is a sign of civilized behavior — a trait that the Queen found to her dismay that the British people no longer possessed.

But Virginians are still civilized and respectful of the rights of others. So, I left the Governor in peace. I guess I’ll have to wait until the next blogger conference to ask him what he thought of Tony Blair.

Former VDOT Commissioner has left Dragas Management Corp., a Virginia Beach home-building company, on friendly terms after a year and a half there. An e-mail to friends and associates signed jointly by Shucet and company owner Helen Dragas stated: “Philip finds that his passion for large engineering and construction projects continues to burn. His fire in the belly comes from over 35 years of dedication to an industry that has been a large part of his life. His fire is still burning brightly.”

In an interview with the Virginian-Pilot, he said:

…he has had “some very superficial discussions” with other companies but declined to identify them. “I’m pretty set on staying in the private sector,” he said. “I do plan, however, to take another shot at making some noise about transportation in Virginia.”

The conventional wisdom holds that traffic congestion is getting worse and worse, that commuting times are getting longer, and that citizens are enduring increasingly unbearable frustration while stuck in traffic. But what if that’s not true? What if, while nobody was looking, commuting times actually got shorter? What if the reality on the ground was at total odds with the political rhetoric?

New census data, which the Axis of Taxes (which includes most of the media) conveniently chose to ignore, suggests that there may be a chasm between perception and reality. According to a September statement by the AAA, the Census Bureau has released data indicating that commuting times actually got shorter between 2000 and 2005.

The average daily commute to work has shrunk from 25.5 minutes in 2000 to 25.1 minutes last year, according to data released this week by the Census Bureau.

“We all should hold a celebration,” said Alan Pisarski, author of Commuting in America. “We’re saving 0.4 minutes!”

I don’t know if Pisarski, a prominent Northern Virginia transportation consultant was speaking sarcastically or not. But I, for one, find the news quite encouraging.

Of course, national averages can obscure local trends. Commuting times in the Washington metro area, third longest in the country, actually got “slightly longer” between 2000 and 2005, AAA reports without providing details. A U.S. Census press release singles out Prince William County, Va., as a suburban county with one of the longest average commutes, 36.4 minutes — fifth longest in the nation. (Which may explain the blind frustration motivating the freeze on new home building there.)

Average commuting times for Virginia in 2005 were 25.8 minutes, ninth longest in the nation. How does that compare to 2000? AAA didn’t say. But the Bureau of Census, god bless ’em, puts its data online. Go here and see for yourself: That’s down from 27.0 minutes in 2000!

A decline of 1.2 minutes in averaging commuting time would be so dramatic and so counterintuitive, that one must consider the possibility that some of the change can be accounted for by the margin of statistical error in Census data or some other change in the way data was collected and compiled. But until such a case can be made, I can only presume that the conventional wisdom just may be wrong.

The commuting data also might explain why, despite the media- and politician-generated hysteria over traffic congestion, most Virginians stubbornly refuse to endorse the idea of higher taxes for transportation.

After reader Larry Gross referred to the AAA “Pockets of Pain” survey in comments on a couple of previous posts, I decided I ought to take a look. I found a summary of the survey in a press release but could not find the details of the survey itself. But even the pro-tax AAA’s spin on the data should deliver a sober warning to Gov. Timothy M. Kaine, who has been stumping the state in favor of a tax increase and wants to elevate taxes and transportation to a defining issue in the 2007 General Assembly races.

For all the angst and maelstrom about traffic congestion, the AAA reports, transportation is far from the public’s top priority. “When respondents were asked to rank a list of national priorities, transportation did not fare well.” In order of importance the respondents produced the following ranking:

(1) Healthcare (26% rated most important)
(2) National Security (25%)
(3) Education (24%)
(4) Social Security (12%)
(5) Energy Independence (9%)
(6) Transportation (3%).

Further, stated the report, the public is far more receptive to the idea of paying tolls, particularly for new projects, than to raising taxes.

When respondents were asked to choose from a number of funding options, the public did not favor using general purpose revenues. In fact, the most frequent choice – 52% – was some form of toll option to help raise money to fund our transportation system. The most popular options are those that add tolls to only new roads and highway lanes (39%).

In focus groups, people made it quite plain why they don’t like the idea of higher taxes.

“In previous surveys and focus groups, we’ve seen more reluctance to increasing funding for transportation,” said Robert L. Darbelnet, AAA president and CEO in a speech given at the National Conference of State Legislatures Transportation Leaders meeting in San Antonio, Texas. “Common responses used to be ‘I already pay enough,’ or ‘existing funds aren’t invested efficiently,’ or ‘I don’t trust my state DOT to do the right thing.’…

Those national responses track very closely to polls conducted earlier this year showing that Virginians have very little appetite for raising taxes. (For details, see our October post on the Survey USA poll and our August post on a Richmond Times-Dispatch poll.)

While the business and political elites tend to favor taxes, the public clearly does not. If Gov. Kaine wants to make taxes and transportation the signature issue of the 2007 campaign season, I say, “Bring it on!”

Alec MacGillis with the Washington Post ran a story two days ago on the anti-growth backlash in the Washington region, highlighting recent events in Loudoun County, Prince William County and Montgomery County, Md. Most disturbing from my perspective was a vote by the Prince William board of supervisors to approve a one-year freeze on most subdivisions “to protest the lack of transportation funding from the General Assembly.”

The Prince William action strikes me as an act of blind, inchoate frustration. It’s not helpful in any way, and it’s wrong on so many levels. Let me count the ways:

First: The vote assumes that the primary reason for traffic congestion in Prince William County is a lack of insufficient spending on roads — as opposed to really bad zoning and land use decisions made by previous boards of supervisors. As we documented in our close-ups of Prince William transportation and land use issues earlier this year, there is a massive overhang of land approved for development. It’s only been in recent years, under now-departed board chairman Sean Connaughton, that the board even began thinking about adopting more transportation-efficient patterns of development. Blaming the state absolves Prince William from the responsibility for developing transportation-efficient communities with a balanced mix of homes, jobs, stores and amenities.

Second: Freezing new housing starts will not solve anything. As long as Northern Virginia generates new jobs, people have to live somewhere. If they don’t live in Prince William, they’ll move to Stafford or Spotsylvania. But they’ll drive back through Prince William to get to the jobs closer to the urban core, only adding to congestion on Interstate 95 and other traffic corridors.

Third: Let’s say the General Assembly raises another $1 billion a year in taxes, as Gov. Kaine and the state Senate want to do. Prince William, with about 350,000 residents, accounts for about 4.7 percent of the state’s population. The county’s share of that $1 billion would be $47 million a year. That’s not enough for P.W. to pave its way out of its traffic congestion problems. But it is enough to perpetuate Business As Usual, supporting the same dysfunctional land use patterns that created the mess.

As Ed Risse was quoted in the article as saying, the moratorium could have the unwanted effect of bogging down the county’s land-use policy in court. What Prince William and the rest of Northern Virginia really need is more control over funding and building roads. “It’s nice that Prince William’s evolved to the point where it can put its foot down, but it will take some reallocation of powers for transportation planning until something happens.”

Update: Turns out that PWC doesn’t have the legal authority to put a freeze on new house rezonings. So, the board of supervisors has decided instead to defer action on rezonings as long as legally permissable, 12 months. The Gainesville Times has the story.

Media General Inc., owner of newspapers in Richmond, Charlottesville, Lynchburg, Danville, Bristol and other Virginia cities, has entered into a strategic alliance with Yahoo! and a consortium of other newspaper chains. Media General newspapers will transition their online career sections to Yahoo’s HotJobs platform, with the goal of creating one of the most comprehensive jobs networks in the country. (See press release.)

The move attempts to address the dangerous erosion of employment classified ads, traditionally one of the most profitable revenue sources for daily newspapers. Said Neal F. Fondren, president of the Interactive Media Division: “Our visitors will benefit the Yahoo! state-of-the-art search and targeting features and user-friendly tools. Advertisers can also use contextual, streaming and interactive media to engage job candidates as well as leverage Real Simple Syndication feeds, job search agents, newsletters and a job recommendation engine.”

Clearly, Media General is better off aligning itself with the Yahoo!-led consortium than trying to develop these interactive tools itself. But the move is essentially defensive, an attempt to staunch the hemorrhaging of market share in a former newspaper monopoly. It will be interesting to see if the Yahoo! initiative leads to similar deals to salvage market share in automobile and real estate classified ads.

As memory serves, classified ads generally account for roughly half the profits of the typical daily newspaper. It is essential that newspapers find a way to preserve this revenue stream. If they can’t, they face a very bleak economic future. And the rest of us will face a future with a much-diminished stream of local news.

A friend of mine, whom I will identify only by his nom de plume, Veritatus, has offered the following satire of the Wrenn cross controversy at William & Mary. I will say only this about our pseudonymous contributor: He, like me, is not particularly religious. But he, like me, is distressed by political correctness that expunges our historical heritage. Unlike me, he is a W&M alumnus, which means he’s reaallllyy mad.

This happened in early 2001…

In Afghanistan supreme Taliban leader Mullah Mohammed Omar has issued an edict against un-Islamic graven images, which means all idolatrous images of humans and animals. As a result, the Taliban are destroying all ancient sculptures. Explosives, tanks, and anti-aircraft weapons blew apart two colossal images of the Buddha in Bamiyan Province, 230 kilometers (150 miles) from the capital of Kabul.

Let’s fast forward to late 2006…

At the College of William and Mary in Virginia, Supreme PC Taliban Mullah Gene Nichol has issued an edict against all un-PC images, most notably the Christian cross or any other artifacts of the College’s unfortunate past linked to the Church of England, the Protestant Episcopal Church in Virginal or any other historical references to Christian or other religious connections that that College may have had. Mullah Nichol indicated that by starting in the chapel by removal of the altar cross, he is sending a strong message that more vigorous measures are to follow.

Renovation of the chapel soon will begin because, though a reconstruction of an earlier chapel, the present form and furnishings comport with 17th and 18th century Anglican requirements for a Christian place of worship — a PC heresy.

The next more dramatic step will be to pull down and destroy the large statue (adjacent to Blair hall) of the College’s founding president (1693) James Blair who served as both a minister of the Church of Scotland and the Church of England. During his long tenure as William and Mary president, Mr. Blair also served as the Bishop of London’s Commissary in Virginia, making him the Anglican Church’s leader in a colony that had no bishop.

Mr. Blair’s statue presents him in the garb of an Anglican clergyman of his day. Public display of such vestments at a liberal arts university such as William and Mary has also been declared PC-heretical by Mullah Nichol along with free thought and free speech and common sense.

Mullah Nichol has also decreed that a vigorous campaign to purify the campus of all historical Christian symbolism or reference will be on-going and may include public burning of the original charter or at least a replica of same if the original cannot be found. References therein dwell upon the training of young men for the Christian ministry. King William and Queen Mary were co-heads of the Church of England making all future reference to them inappropriate. Sources indicate that the school may need to be renamed because of this heretical tie to Christian monarchs.

As leader of the secular religion of PC at William and Mary, Mullah Nichol will soon rename the College. Mullah Nichol Taliban U. may be selected.

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.