Monthly Archives: March 2008

Kaine Working on Transportation Plan

Gov. Timothy M. Kaine is working on a new transportation-funding plan in preparation for the special General Assembly session. Details are not yet available, but the governor has articulated at least three main principles, reports the Daily Press.

  • The plan will address funding for the two most congested regions of the state — Hampton Roads and Northern Virginia.
  • The plan will be simple, replacing the patchwork of taxes, fines and fees passed by the General Assembly last year.
  • The plan will address the ever-increasing claim of the maintenance budget on Transportation Trust Fund dollars. As maintenance requirements grow, money is running short for construction funds.

Missing from the Daily Press account is the phrase “user pays.”

According to the Daily Press, GOP lawmakers on the Peninsula are pushing for a regional sales tax. Such a levy has only one virtue: the ability to raise lots of money while not pinching anyone too badly at any one time. But it would represent a massive transfer of wealth to drivers from non-drivers, subsidize auto-dependency and prolong Virginia’s vulnerability to rising gasoline prices. We can only pray that Gov. Kaine doesn’t have that idea in mind.

Learning to Love Lawyers: Economic Development in the Knowledge Economy

Some people regard the proliferation of lawyers in the United States as a blight, a symptom of a society addicted to litigation. But here in Richmond, we love our lawyers.

In this town, where the economy is based largely upon professional services, the law is big business. At the end of 2007, according to Emily Dooley with the Times-Dispatch, the legal sector employed 5,838 people, about 2,000 of whom are attorneys. The industry sector’s average annual salary, which includes non-lawyers, was $77,000.

The legal profession is remarkably large for a city Richmond’s size. Several characteristics of the region account for the proliferation of practitioners. Richmond is home to the state capital, which provides lots of lobbying and regulatory work; a U.S. Court of Appeals, one of 12 in the country; and a Federal Reserve Bank. The city also has a large business clientele, including the corporate headquarters of 10 Fortune 1000 companies.

In my observation, however, the local client base is almost incidental to many Richmond attorneys, who are road warriors serving clients who rarely, if ever, set foot in the city. One friend of mine, who handles litigation for automobile manufacturers, zooms off every week to trials in courtrooms around the country. Another friend, an expert in land use law, travels nationally to work on cutting-edge real estate projects. Yet another represents a roster of Israeli firms doing business in the U.S.

More examples: After stepping down as governor, Gerald L. Baliles built a national practice as an aviation attorney. After stepping down as Secretary of Commerce and Trade, Michael Schewel has started working on alternate energy deals around the country.

In the Knowledge Economy, lawyers are more than ambulance chasers and pettifoggers — they are deal makers. The best of them do business anywhere, and they can live anywhere, they want. A remarkable number of top attorneys choose to live in Richmond.

Economic development of the Knowledge Economy is all about recruiting and retaining human capital. That’s made easier in Richmond by the number of large and growing firms: most prominently Hunton & Williams and McGuire Woods, but also fast-risers such as LeClair Ryan. Richmond has another big advantage in talent recruitment: access to excellent law schools such as the University of Virginia, William & Mary and the University of Richmond, all located within the region or a few miles down the Interstate. All three law schools recruit nationally, and a disproportionate number of their graduates are recruited by local law firms.

So, what can the Richmond region do to build its legal sector? Top lawyers travel a lot, so the most important piece of physical infrastructure is Richmond International Airport. Only a few years ago, Richmond had arguably the worst air service of any city its size. We now have a handsome new facility and much more competitive air fares and flight schedules. Otherwise, “economic development” consists of building the kind of communities that lawyers like to live in. In that regard, last weekend’s French Film Festival at Virginia Commonwealth University, an internationally known cultural event, may do more to make Richmond desirable to legal professionals than anything that traditional economic developers can do.

A Broken Transportation System

A Conservative Transportation Alternative” rejects Business As Usual transportation policy on the grounds that the existing transportation system is broken, and no amount of money raised through taxes and allocated by politicians, is likely to fix the problem. The authors marshal a powerful body of evidence to make their case.

First, they make the point that, contrary to assertions by the Axis of Taxes, Virginia has dramatically increased transportation spending since 1986, when the modern era of transportation funding began. The chart below shows that spending outstripped growth in the number of licensed drivers and even growth in Vehicle Miles Traveled.

(Click on image to enlarge.)

(I would add one important caveat to this data: It appears not to adjust transportation spending for the inflation in construction costs. There has been little if any increase in real spending, as opposed to nominal spending. Still, the data demonstrates that Virginia’s transportation system has hardly been starved for funds.)

Over the years, the General Assembly has supplemented the 1986 Baliles-era funding sources with several additional revenue streams: the state recordation tax, a state tax on insurance premiums and General Fund appropriations in 2000 ($307 million), 2002 ($147 million), 2005 ($348 million) and 2007 ($661 million).

No amount of spending under the current system, the authors argue, will ever be enough to solve traffic congestion. I will quote the document at some length because I couldn’t say it better myself:

The model of urban development that the Virginia legislature has been funding for decades simply doesn’t work anymore — if it ever did. … Virtually all of the assumptions underlying the model are flawed. It is foolish to assume, for example, that every resident in a region should be able to move by automobile from one point in the region to any other without substantial delay.

Another assumption is that interstate motorists can be whisked around or through urban centers on new highways. Whenever a highway is built for that purpose, it serves as a magnet for development, resulting in yet another clogged corridor.

The model also assumes that the public should be required to pay to extend roads and utilities to new residential and commercial developments located far beyond urbanized areas where the price of land is relatively low. Perhaps more than any single factor, this proposition has produced the sprawl that characterizes Virginia’s metropolitan areas.

The prevailing attitude is that traffic congestion is a problem that can be relieved by constantly constructing new roads and adding lanes to existing ones. … Government tends to respond with a single formula: raise taxes and build more of the same. … Elected officials have been too quick to pass over the most equitable, efficient and disciplined option for paying the staggering cost of transportation projects. That option is tolls or other user charges, land or cash contributions by adjacent property owners who will benefit or other methods of having special beneficiaries rather than taxpayers pay for new projects.

Well said, gentlemen! Well said!

A Conservative Transportation Manifesto

A coalition of activist Virginia conservatives has distributed an analysis of Virginia transportation policy, “A Conservative Transportation Alternative,” in the hope of informing the General Assembly during its upcoming special session on transportation. No single author is listed, but I suspect that the guiding light behind the document is Patrick McSweeney, the Richmond-area attorney whose legal work persuaded the state Supreme Court to strike down the Northern Virginia Transportation Authority.

The ideas in the “Conservative Alternative” will sound very familiar to readers of Bacon’s Rebellion. They are based on the propositions that (a) the existing transportation is broken and cannot be fixed with more tax money and (b) Virginia needs to devolve responsibility for transportation policy to municipal governments, where transportation and land use planning can be aligned. The document also supports the idea of a “user pays” financing system.

The “Conservative Transportation Alternative” is significant because it represents an important advance in the conservative movement beyond the “Just Say No” rhetoric of the past. Instead of fighting an obstructionist battle against bone-headed ideas — raising taxes, creating unconstitutional regional authorities and perpetuating Business As Usual — these conservative activists have shifted to the ideological offensive, so to speak, articulating a positive set of principles to guide transportation policy going forward.

The manifesto is significant in another way. In the past, free-market and fiscal conservatives opposed Business As Usual policies mainly on the grounds of opposition to new taxes. That left them little in common with the Smart Growth movement, comprised mainly of liberal-leaning environmentalists who emphasized land use reform and environmental issues. By embracing land use reform, at least in principle, the “Conservative Alternative” builds a conceptual bridge between the two groups, opening up the possibility that Virginia’s free marketeers and Smart Growthers may find sufficient common ground to collaborate in the future. Mark my words, “A Conservative Transportation Alternative” is a very important document.

I will delve into the document’s detailed arguments in subsequent posts, but for now, let me leave you with the principles it espouses to guide Virginia transportation policy:

1. Fund transportation:

(a) without tax increases,

(b) without more tax-supported debt,

(c) without allowing diversions of funds earmarked for transportation to non- transportation programs, and

(d) by imposing the costs of new projects, to the extent possible, on those who will directly benefit from new transportation spending.

2. Refocus state transportation policy to encourage greater investment, innovation and risk-taking by the private sector.

3. Transfer responsibility for secondary roads to cities and counties that are not already exercising that authority, and accompany such transfer of responsibility with the authority over the revenues currently used at the state level to build and maintain secondary roads.

4. Adopt true performance-based criteria for spending government funds on transportation, with relief of traffic congestion having the highest priority.

5. Develop a methodology for allocating the cost of new, upgraded and expanded transportation facilities and other infrastructure that appropriately accounts for distance-related factors and any hidden cost of sprawl so that subsidies borne by taxpayers at large can be reduced or eliminated.

These are all sound principles, and they represent a huge conceptual leap forward for Virginia conservatives. The document does leave some work undone: It does not offer specific policy prescriptions for raising the funds that the transportation system clearly does need. (For my thinking on how these principles might translate into a “user pays” system for paying for transportation improvements, I refer readers again to my essay, “User Pays.”) But that is a minor quibble. This is a very important document indeed.

Boomers Are Getting Older… Now What?

An old friend of mine, John Martin, has taken a leadership role in raising awareness of one of the great demographic trends of our time: the aging and impending retirement of massive numbers of Baby Boomers. Martin, the CEO of the Southeastern Institute of Research, has partnered with Matt Thornhill to launch the Boomer Project, a group that specializes in market research on the Baby Boomer generation. He also is an organizer of the Older Dominion Project.

In a meeting of the Older Dominion Project held in Richmond yesterday, leaders from business, government, academia, foundations and the not-for-profit sector set up committees to study issues such as long-term care insurance and the workforce “brain drain” that will occur when Boomers retire. (Bill Lohmann has the story here.)

It’s not clear from the story what the larger mission of the Project is other than, as Martin put it, “to create a marketplace of ideas.” But it sounds like a great initiative. One thing I appreciated about the tenor of the event (as I deduce from reading the story) is that there does not appear to be an operating presumption that the challenges of an aging population are problems that government alone must solve.

Of course, there is a role for government, along with the private sector and the not-for-profits. Virginia state government will have its hands full with two big challenges, and we should consider ourselves darned fortunate if it just handles them well: Fully fund the retirement expenses of roughly 500,000 state and local government employees, and ensure that Virginians have access to quality nursing homes and long-term care. Those are issues that greater minds than mine are thinking about already, so I will not dwell upon them.

I would focus instead on a third challenge facing the Old Dominion, which may be the most important of all even though it is typically considered outside the scope of state government: The sky-rocketing cost of health care. Health care bills are becoming increasingly burdensome to all segments of society — but especially the elderly. And the situation could well get worse. As we all know, Medicare is running on borrowed time.

Of course, Medicare is a federal program, which means that the Commonwealth of Virginia cannot fix it. However, it is within the power of the Commonwealth to address health care costs generally.

Although you would never imagine it from the national-level debate over health care, there are more fundamental causes than greedy drug companies that drive health care inflation. Despite advances in medical science, the health care sector as an industry has lagged the national economy in productivity growth. The preferred solution to Virginia’s health care crisis (and the nation’s) isn’t transferring more wealth from the haves to the have-nots, it is to spur innovation, boost productivity and improve patient outcomes. Achieving greater productivity is our way out of the health care dilemma — but public policy mavens just aren’t talking about it.

Now, let us ask why the health care industry is lagging in productivity. Is it because doctors and hospital administrators are somehow greedier or stupider than executives in other sectors of the economy? Or is it because health care is one of the most heavily regulated industries in the country? Politicians like to blame villains, so they tend to hew to the first interpretation. I happen to believe that antiquated government rules are the root problem. Here’s how state-level regs inhibit innovation and slow a desperately needed restructuring of the health care system:

  1. Certificate of Public Need imposes a layer of regulatory review over hospital expansions and the purchase of medical equipment, which effectively creates competition-free zones for hospitals and freezes the industry structure in place.
  2. Insurance mandates, typically passed at the behest of special interests, hobble insurance companies from devising discount health care plans for businesses and individuals who can’t afford the expensive plans. Thus, the ranks of the uninsured swell, and hospitals pass on the cost of treating them to everyone else.
  3. Professional licensing requirements converts the health care workforce into a collection of professional guilds, which, like industrial craft unions, are more concerned about protecting their turf than finding more productive ways to deliver health care services.

Those are just the highlights. There’s more the state could do to promote consumer-driven health care by increasing the transparency of the medical marketplace, and much paperwork that could be eliminated if someone could persuade all health care providers to adopt common IT standards.

A wholesale reformation of Virginia’s health care industry may be beyond the scope of the Older Dominion Project, but I can’t think of anything more important that state government, business leaders and the health care industry possibly could do to improve the lives of the elderly — and everyone else.

Metro’s Slow-Motion Train Wreck

What’s the real cost of running the Washington Metro? Does anyone really know? Metro authorities cite problems such as worn track fasteners, crumbling concrete platforms and corroded traction power cables, reports Lena Sun with the Washington Post. The agency needs $489 million for “urgent” maintenance work, $244 million of it in the next two years. Metro doesn’t have the money, and municipal governments in the Washington region are reluctant to cough up any more.

Please note, that half billion dollars just covers Metro’s “urgent” needs. How much would it cost to bring the Metro up to the standards of a first-class commuter rail? How would that liability translate into fiscal obligations for Virginia localities under the current cost-sharing formulas?

As gasoline prices soar, Metro should be riding high as motorists seek alternative modes of transportation. But the railway system is crumbling. Is there any hope that Metro can function effectively under its current governance structure, which must balance the interests of multiple municipalities in three different states?

One more question: Is this a system that Fairfax County really wants to buy into with the Rail-to-Dulles project? Does the county have any idea of what kind of liabilities are lurking off the books?

Annexation Count-Down: Two Years and Counting. What Comes Next?

Gov. Timothy M. Kaine is one of the few people, it appears, who is looking ahead to the year 2010 when a state moratorium on annexation expires. Unless the issues that inspired the moratorium years ago are addressed, Virginia could face a wave of bitter conflict between cities and counties. According to Ray Reed with the Media General News Service, Kaine wants to start a discussion with state legislators and city leaders.

A quick primer: When the drafters of the state constitution envisioned a system of independent cities and counties, they gave the municipalities different powers and authorities. The thought was that cities, as urban centers, would require greater fiscal resources to provide urban services to their citizens. Counties, by contrast, were overwhelmingly agricultural, and their citizens did not expect, or want to pay for, the same level of services. However, as growth spilled out of cities into neighboring counties, annexation gave cities a tool to incorporate surrounding urban settlement patterns and provide the citizens the services they desired.

The system worked as planned for decades. Then two things happened. First came the Civil Rights and the rise of the black vote. White-dominated city governments used annexation (or, it was feared they would use it) to annex white-dominated precincts of neighboring counties in order to preserve their white majorities. Clearly, this was a use of annexation not intended by the framers of the state Constitution.

Then came the rise of auto-centric development that hop, skipped and jumped beyond city boundaries. Cities had a nasty habit of annexing those districts with heavier concentrations of tax-paying businesses, leaving the citizens (with their craving for urban services) to the counties. Needless to say, the counties felt victimized by this cherry picking.

Those two trends led to the annexation moratorium. But that created a new set of problems as poverty became concentrated in cities, saddling them with high costs of crime fighting and social services, and new economic growth occurred in the counties. Despite the perceived inequities, counties and cities have lived relatively tranquilly ever since. Well, at least they haven’t been suing each other.

But that could all change. Kaine is not the only one looking down the road. Steve Newman, R-Lynchburg, says he’s concerned that cities may soon start filing annexation lawsuits.

Also, according to Chris Graham in the New Dominion, Del. Matt Lohr, R-Rockinham, authored a bill this session that would extend the original 15-year moratorium another 10 years to 2020. But Kaine vetoed the bill. Lohr worries that cities and counties may stop collaborating on mutually beneficial projects like water and sewer. Said Lohr: “Waiting until the last minute, as the governor suggests, only brings more harm to the problem. I learned on the farm many years ago that you don’t wait until the last minute to fix a fence.”

Kaine says that annexation is never coming back. Now is the time to think long-term about city-county relations, and that includes the ticklish issue of how to allocate state aid to localities and the idea of revenue sharing between localities. As Ray Reed quotes him, Kaine said:

“If I’m in Wise County and I know that I’m going to get some percentage of the state’s income tax collections, I’m pleading for the Fairfax County Economic Development Authority to be successful,” Kaine said.

“And similarly, if I’m in Norfolk I want Wise County to be successful.

“So, we have to build some mechanisms in place that give everybody a motive to help everybody else be successful,” Kaine said.

These issues won’t be easy to solve. But it’s nice to know that people are actually thinking ahead for a change.

Do Taxes Matter?

The extent to which taxes drive economic behavior is a topic of some debate among economic development theoreticians. Some, like myself, believe that, all other things being equal, higher taxes discourage corporations and affluent individuals from investing in, or moving to, a state or region. Others believe that all other things never are equal, and that the effect of taxes are negligible.

We may be getting a real-world experiment, with Virginia and Maryland in the petrie dish.

The experiment will originate from actions on the northern side of the Potomac. The Maryland state Senate, to quote the Associated Press, “is weighing the option of using an income tax increase for people making more than $750,000 a year to replace the computer tax that was approved in the November special session.”

Senators from Montgomery County (who are Democrats, incidentally) say the higher income tax will disproportionately affect taxpayers in the county, which is the state’s wealthiest. Their fear: Wealthy taxpayers may move to Virginia. An alliance of Montgomery Democrats and the state’s Republicans may be sufficient to quash the proposal, however. If they are successful, we’ll never know for sure whether an increase in the state income tax — from 5.5 percent to 6 percent for those earning more than $750,000 a year, and 6.5 percent for those earning more than $1-million — would induce a measurable number of rich Marylanders to forsake their terrapin-hood and embrace the cavalier life of Virginia. (Virginia’s top income tax rate is 5.75 percent.)

But we still may get our social-scientific lab experiment. If the income-tax hike fails, that presumably leaves the computer tax in place. Maryland’s Information Technology industry bitterly fought the measure, which added computer support services, data center support, custom programming, consulting, and disaster recovery services to the list of activities covered by the state’s 6 percent sales tax. (See article in Information Week.) If that tax stays in effect, it is but a short hop, skip and jump to Northern Virginia.

If the tax does drive business behavior, we can predict a growing number of announcements by Maryland-based businesses that they are locating their server farms, data centers and other operations in Northern Virginia. Stay tuned…

Update: Here’s a sample of what Maryland will subject itself to if it keeps the sales tax on computers. In an open letter addressed to Maryland tech firms, dated march 14, Sen. Ken Cuccinelli, R-Fairfax, wrote:

I would like to take this opportunity to personally invite you to relocate your business to the Commonwealth of Virginia. Virginia has consistently been rated one of the most business friendly states in the nation in independent assessments, including receiving Forbes Magazine’s top-ranking for the last two years. Here in the Commonwealth, we believe that business is the lifeblood of the economy and I am personally committed to making sure we remain welcoming to business owners. …

As you consider your best options for the health of your business, please consider bringing your expertise to the Commonwealth of Virginia. Right here in Fairfax County, we have space in the high-tech Dulles Corridor that is calling your name. I would love to hear from you and connect you with resources for business owners here in Virginia.

What Are You Waiting for, Governor?

A bill that would repeal Abuser Fees has been sitting on the desk of Gov. Timothy M. Kaine since March 19 — a full week now — but the governor has not signed it yet. Del. Tim Hugo, R- Fairfax, author of the bill, is getting impatient.

HB 1243 would totally repeal the abusive driver fees and go into effect immediately upon receiving the governor’s signature. The measure also would refund motorists who had paid the fees, and would forgive any remaining fees.

Says Hugo in an e-mail missive today: “We worked extremely hard with members of the Governor’s administration to ensure their recommendations were incorporated. … It is now time for Governor Kaine to stop delaying and sign this important repeal into law.”

Has the governor developed cold feet about the repeal? Is he wondering what will replace the lost revenue? Or does he just have such a large pile of legislation on his desk that he can’t get to everything at once? Whatever the case, let’s repeal this dog and move on.

Update: The governor signed the bill on March 27. I guess he was just backlogged.

Renewable Energy: Be Careful What You Wish For

An unidentified company has filed a “pre-application” to construct 90 400-foot wind turbines in parts of Virginia’s George Washington and Thomas Jefferson national forests. Eighteen miles of national forest crest line would be affected by the proposal, says Rick Webb, an environmental scientist at the University of Virginia who opposed another wind farm proposal, since approved, in Highland County. (See the story on NVDaily.com.)

Given the incentives to develop renewable energy resources, Webb sees the application as a sign of things to come. “This is the tip of the iceberg.”

Here’s what’s going on: Virginia, like many other states, has set a goal for electric utilities to generate a significant percentage of their electric power from renewable energy sources in the near/mid-term future. Dominion has been buying wind power projects, and in November it issued a Request for Proposal for more renewable energy projects. (Last week Dominion pronounced that it was “pleased” by the response, which included ideas for wind, hydro, biomass and solar.)

At present, wind power and biomass are the more economically competitive of the renewable energy sources. But they tend to be small-scale, and a large number of projects will need to be built to generate sufficient electricity to meet the state’s quotas for renewable fuels. Consequently, there will be intense pressure to build on the limited number of renewable-fuel sites that are available.

I don’t know for a fact that the proposal for wind farms in the national forest is directly tied to the Dominion solicitation, but I wouldn’t be surprised if it is — the timing is surely more than coincidental. Regardless, the hearings for the wind power proposal undoubtedly will be a replay of the controversial Highland County project — where concerns surfaced about the giant turbine blades killing birds and bats — compounded by the fact that the scenic vistas of national forest are being despoiled.

Thus, under the guise of environmental values, public policy in Virginia is promoting renewable energy. But under a different set of environmental values, we’ll find that many of those projects are undesirable.

To my way of thinking, energy conservation is the most pristine environmental policy of all — avoid consuming the electricity in the first place. Of course, our current regulatory apparatus encourages Dominion and other electric utilities to pursue renewable energy sources, whatever the cost, because they can pass on the cost to rate payers. By contrast, power companies in Virginia only undercut their market when they invest in conservation measures.

We’re getting what we wished for, and we may not like it.

(Credit for photo of mountain-ridge wind turbines: Appalachian Voice Front Porch Blog.)

“Richmond” Has a Credibility Problem – Is There a Solution?

The Kaine administration has a credibility problem in Northern Virginia when it comes to matters of transportation. The Department of Rail and Public Transportation has proposed diverting a big chunk of an anticipated $195 million in revenues from HOT lanes along Interstate 95/395 to the Virginia Railway Express. That would mean fewer Bus Rapid Transit buses serving the Interstate — and Northern Virginia politicians are not happy about it. “It’s bait and switch,” says Alexandria Mayor William D. Euille.

As Eric Weiss explains the problem in the Washington Post, Washington area leaders went along with the plan to turn the carpool lanes on Interstates 95 and 395 into express toll lanes on the understanding that $195 million would be devoted to mass transit, including 184 clean-fuel buses that would ferry commuters into the District or the Pentagon. But DRPT had a different idea: In addition to $40 million for VRE, the state now wants to spend $76.6 million on park-and-ride lots and other facilities south of the converted HOT lanes.

Northern Virginians lost no time in painting “Richmond” as the villain. “This is diverting resources needed here to another part of the state,” said Gerald E. Connolly, chairman of the Fairfax County Board of Supervisors. “These are our resources.”

“This is classic,” Weiss quotes Fairfax resident Bob Perotti as saying. Have you noticed that Richmond has the best roads in the state and Northern Virginia has the worst traffic?”

Mr. Perotti might be interested to know that Spotsylvania County, where some of the improvements would go, anchors the south end of the I-95 HOT lane corridor and is at least two counties removed from the “Richmond” metropolitan area, and also that the VRE heads north from its point of origin, not south. He also might be interested to know that Pierce Homer, the secretary of transportation who defended the DRPT study, cut his political teeth in Prince William County before joining the Warner administration and staying on with the Kaine team.

Regardless, the perception of facts has greater political import than the facts themselves. And the perception is that the politicians and planners “in Richmond” — regardless of who appointed them, whom they represent, or where in the state they might have come from — cannot be trusted. Once again, Northern Virginians see “Richmond” grabbing their money and spending it for the benefit of someone else.

In this instance, the perception really isn’t fair. The Kaniacs contend that the new plan still would add five new Rapid Bus Transit stations and 76 buses. Their analysis suggests, however, that they could divert more drivers off the Interstate by investing the balance in VRE and the park ‘n’ ride lots. By expanding the frame of reference from I-95 proper to the I-95 corridor more broadly conceived, they get a different result.

An I-95 Corridor Authority. The issue here is one of trust. Fairly or unfairly, Northern Virginians don’t trust anyone from “Richmond.” That itself is a political reality that must be addressed. How do we change that suspicion?

The political dynamic would be very different, I believe, if Virginia embraced the idea of planning transportation around “congestion corridors.” Interstate 95/395, stretching from Spotsylvania to the 14th Street Bridge, would logically fall into a single corridor. But the corridor should be defined more broadly than the Interstate alone. It should include U.S. Route 1, which runs parallel for most of the distance, as well as the VRE. The goal should be to improve mobility and access for the entire corridor, not just a single component of it.

The corridor would need an operating entity — the “I-95 Corridor Authority” — that would administer the congestion toll revenues and plan how best to spend them. Currently, the politically correct solution is to plow all the revenues into Bus Rapid Transit or VRE. Those may be the best solutions — but, then, maybe they aren’t. No one has seriously examined other options for improving corridor mobility, such as: (1) ramp metering to reduce congestion at interchanges, (2) improved incident response teams to get wrecks off the road, (3) traffic light synchronization along U.S. 1, or (4) more sensors and monitors to measure, and respond to, traffic flow. (If these options have been considered, they have never made it into newspaper accounts.)

If I might speak even more boldly, I might suggest that a corridor authority should have input into land use planning along the corridor. City councils and boards of supervisors tend to consider the impact of their decisions only upon their own localities. Someone needs to analyze impacts that spill over municipal borders. It is not yet clear how well the Virginia Department of Transportation can fulfill that function — there’s that bugaboo of trust. As long as the authorities are transparent and accountable, citizens and politicians may trust a regional authority to better represent their interests than “Richmond” does.

(Hat tip: Jim Wamsley.)

The War Bill Comes Due

As one who came of age during the Vietnam War years, I am amazed at the lack of protest over George W. Bush’s handling of the Iraq War. Not only has the war now claimed the lives of 4,000 U.S. service men and women, it has killed 90,000 Iraqi civilians.

New estimates put the overall cost of the war at $3 trillion, a quantum leap from the Bush Administration’s original estimate of $50 billion. This is big, big money and is major reason for this country’s current economic woes since the war has grossly inflated the budget deficit and help triple the price of oil. The subprime mess, bursting of the real estate bubble and Wild West financing have been other major causes of the current woes. But the war does far more to negatively impact the U.S. economy that merely land use, which is a popular item, if overrated, of discussion on this blog.

Even more shameful is that the Weapons of Mass Destruction used as an excuse for the war didn’t exist. And, the neocons’ dream of creating a viable model of American-style democracy for the rest of the Middle East has become a bad joke. (See column in Bacons Rebellion).

Peter Galuszka

Adventures in Transparency

Cockroaches famously scurry for their hideouts when the lights come on. Why do they hide? Light brings trouble — swatting brooms, smashing feet and toxic clouds of pesticide.

In other words, the party’s over (for the moment).

Like those apocalypse-proof denizens of the baseboard, governments aren’t too keen on the idea of having a light shined on their activities, either. The more exposed their activities are to scrutiny, the more likely someone is to ask uncomfortable questions (Three grand charged to the Holiday Inn? I didn’t know they had a presidential suite. They don’t? Maybe it was those mini-bar Snickers, then. All of them. On the entire fifth floor).

The move to shine even more light into Virginia’s budget is the topic of my latest column. I take a spin through Commonwealth Data Point to see where the money is going, and find lots and lots of data.

But for all the numbers and all the names, one critical piece of the puzzle is missing: Context.

For example, why did someone at VDOT charge over $500 at a Bass Pro Shop? There might be a legitimate reason for this expenditure (after all, how many people still dig up their own night crawlers?). But you’ll never find out why the money was spent there, or at any number of tire centers, or hardware stores or newspapers because there’s no context for the charge.

Putting the state’s finances in perspective is one of the goals of transparency. It will allow some, of course, to say that the holy trinity of waste, fraud and abuse is rampant and needs to be addressed immediately. Others will be able to discern spending patterns — who the favored vendors are, why spending increases in December, and more. Still others will look at the mess and wonder how they can get in on the good times (cut-rate night crawler salesmen will be beating down VDOT’s door at any moment).

The legislature had a shot at passing a wide-ranging transparency bill in this session, but refused. Meanwhile, other states are passing measures either unanimously or by executive order. Some are more comprehensive than others, but all are aimed at the same, general goal:

Turning the lights on, and seeing what scurries toward the baseboard.

No More Free Lunch: User Pays

Everybody knows that Virginia needs to invest more money in its transportation infrastructure. The central questions that have concerned lawmakers is how much money, and who pays? (I’ll leave aside for now the nettlesome issue, which has received insufficient attention, of coordinating transportation improvements with human settlement patterns.)

As the collapse of the HB 3202 funding formula shows, Virginia’s transportation funding policy is in total disarray. In this week’s column, I argue that the only approach to raising more money for transportation that can be sold politically to the public is one built around the principle of user pays. In the normal course of politics, constituencies lobby for road and transit improvements that benefit them — but do their utmost to shift the cost to someone else. That just won’t work anymore. People don’t trust the system to treat them fairly. The only politically palatable way to raise funds is to ensure that those who use, or benefit from, transportation improvements pay for those improvements themselves.

No more taxing the public and cycling billions of dollars to Richmond where politicians, bureaucrats and rent-seeking lobbyists can divert funds to their own special uses. From now on, transportation revenues must go directly back to those who pay for them. And if the money can’t be found to build a pet project, then maybe, just maybe, it doesn’t deserve to be built.

But never fear. There are many, many sources of funds that we can tap to expand our transportation system. In “User Pays,” I outline many of them and show how they can be sold politically to a skeptical public.

Most of these ideas are familiar to faithful readers of Bacon’s Rebellion. But for the benefit of those who don’t haunt this blog every day and read all the comments, here is an outline of the main points:

  • Dedicate the gas tax to maintenance. Raise or lower the tax as maintenance costs rise or fall.
  • Prepare for the day when the gas tax doesn’t work anymore by investigating a Vehicle Miles Traveled tax.
  • Use privately financed tolls to build major new bridge and limited-access highway projects.
  • Charge impact fees on commercial and residential development
  • Use CDAs and TIFs to finance local projects when impact fees do not suffice
  • Use congestion tolls to allocate scarce highway capacity. Create congestion “corridors” and “districts” where the tolls apply, and plow back revenues into improvements that increase mobility and access within those corridors and districts.
  • Tap the General Fund only for projects that can be justified on the basis of public safety or economic development.
  • Pass a constitutional amendment to protect dedicated transportation revenues from legislative raids.

Springtime for the Rebellion

The flowers were blooming, the birds were singing and the Rebellion was spreading. There was optimism in the air. And hope, real hope, for fundamental change — an end to Business As Usual. Feel the freedom. Read the March 24, 2008, edition of the Bacon’s Rebellion e-zine.

If you don’t subscribe to the e-zine, you should. It’s free. Click here.

Here’s this issue’s line-up:

User Pays

Virginia’s transportation system needs more money. But how we raise the money is just as important as how much. Only a user-pays system can break the political gridlock.

by James A. Bacon


Good News, Bad Reporting

As the economy weakens, you can count on the MainStream Media to defend MassOverconsumption and Business As Usual in a desperate bid to keep the advertising dollars flowing.

by EM Risse


Learning from Big Boxes

Consumers love big box stores for their “bargains” and “everyday low prices.” What they don’t see are the costs imposed by hidden subsidies and the scatteration of human settlement patterns.

by EM Risse


Extend Foot, Pull Trigger

The unilateral rewriting of the Dulles Greenway legislation sends a bad signal to potential investors in Virginia roads: When times turn tough, lawmakers renege on deals.

by Leonard Gilroy


Pork and Transparency

The Commonwealth is slowly, grudgingly opening up its books to citizen scrutiny. Putting credit-card bills on a Web-accessible database is a big step forward, but it raises more questions than it answers.

by Norm Leahy


The War Bill Comes Due

The hidden costs of the Iraq war are a bigger economic debacle than the sub-prime mess.

by Peter Galuszka


Juice Junkies

The Day household is addicted to electricity. Our careless consumption has consequences beyond the light bill: pollution, mountaintop removal and greenhouse gases among them.

by Barnie Day


I’ll Take the Two BMWs, Please

Rail to Dulles is so expensive that we could lease two BMWs per rider with the money. The Feds were right to turn down funding, and Virginia Congressmen should leave well enough alone.

by Wendell Cox and Ron Utt


Smokes, Litter and Drugs

Youngsters who smoke cigarettes are more likely to litter and abuse drugs as well. The campaign to snuff out smoking is not just a public health issue, it’s a crusade to save our children.

by Frank Kilgore


More Roads Are Not the Answer

The unraveling of Virginia’s transportation funding plans could be a blessing if it prompts lawmakers to wean the Commonwealth from its auto-centric, sprawl-inducing policies.

by Michael Cecire


Nice & Curious Questions

Doggie Happy Hours, or

Virginia is for Canine Lovers

by Edwin S. Clay III and Patricia Bangs