Connaughton changes his tune on the gas tax

by Norm Leahy

Virginia Transportation Secretary Sean Connaughton told a group of road contractors in March that the state was going to have to “adjust” the gas tax to keep it as a viable source of revenue. As “adjust” does not mean “lower” in government-speak, Connaughton was promising the assorted tax consumers that he would push for a hike in the 2012 session.

Today we learn that the Secretary is still worried about VDOT’s fund balances, but he’s backing off of his call for a gas tax increase:

The former Prince William Board of County Supervisors chairman told a Prince William Chamber of Commerce lunch crowd at Old Hickory Golf Club on Wednesday that the state’s main goal is to plug a $400 to $500 million hole each year that could be devoted to capital projects but instead is funneled to pay for road upkeep.

However, other than speaking to the possibility of public-private partnerships, Connaughton did not provide any details on how to stop this trend. He also reiterated Gov. Bob McDonnell’s opposition to raising the gasoline tax in a one-on-one interview with the News & Messenger.

It would seem that Connaughton’s freelancing days on the gas tax are over — not only because of the Governor’s stance against general tax increases, but more importantly, because of McDonnell’s possible vice-presidential ambitions (what would John Nance Garner have to say about that?).

This still leaves open the question of how the state intends to raise the monies it thinks it needs for new construction. Rest area advertising is mentioned as a possibility. It’s a fine idea, but hardly likely to pump $500 million a year into the state’s road building account.

Connaughton talks of public-private partnerships. Those are fine things, too, and Virginia should pursue those whenever possible. But even these don’t begin to close the construction gap.

But a “menu of potential options” needs to go much further. Some appetizers Connaughton might like to add include:

* Ensuring that the General Assembly can no longer raid the transportation trust fund to pay for other government programs. Constitutional amendments to put the fund off limits have been introduced, but have failed, because Democrats and Republicans can’t agree on the particulars of how it would all work.

* Overhauling VDOT. The current system is a Byrd machine relic that insists on the state having to maintain local roads. This isn’t just inefficient, it’s insane. Harry Byrd is dead. It’s time to put his road agency in the urn along with him and replace it with one that puts the responsibility for local roads in local hands.

* Stop using gas tax money to pay for mass transit. This is a wealth transfer, plain and simple. Worse, it breaks the implicit contract between the drivers and the government that their gas taxes will be used to maintain roads. It’s time for transit to pay its own way and stop leeching off the guy stuck in traffic.

* Begin experimenting with the next tax regime – whether it’s a miles-driven tax, congestion fees, tolls or something else – that will replace the per-gallon tax. Higher fuel economy and inflation have seriously eroded the gas tax’s purchasing power.

It would be very helpful, too, if Connaughton would use his bully pulpit to advocate against federal meddling in state road construction (points on which Heritage Foundation transportation expert Ron Utt elaborated in our radio interview with him in June).

If Connaughton is really interested in a full menu of alternatives that can generate the cash and policy freedom he wants, I’ve got Ron’s number…

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17 responses to “Connaughton changes his tune on the gas tax”

  1. So part of your solution is devolution? I guess you have not read Connoughton’s-sponsored report [or Jim’s post] that devolution would make counties responsible for the construction and maintenance of a badly deteriorated road network without sufficient revenue sources to do the job. Thus, counties, and not the state, would have to raise taxes on all real estate to pay the responsibility.

    Here are some findings/conclusions from the report:
    1. VDOT’s secondary road maintenance budgets declined from $483 million in 2007 to $345 million in 2010, or by 29%.
    2. VDOT estimates total needs to repair secondary pavements deficiencies at $1.3 billion, and a “targeted” need at $338 million for maintenance.
    3. VDOT’s FY 2011 budget for secondary maintenance and operations = $3,240/lane mile statewide. FY 2011 payments to Arlington=$16,121/lane mile and Henrico=$9,101/lane mile [counties responsible for their own roads]. FY 2011 payments to cities = $17,180/lane mile [principal and minor arterials] and $10,087/lane mile [collector and local streets].
    4. Under any devolution scenario, road funding from the state to the counties would be stable “at best” but are likely to decline over time.

    While devolution sounds good in concept, it would require the state to spend more than a billion to correct past deficiencies and also find the funds to help counties pay for annual construction, improvement, and maintenance of the devolved roads. Then, there would be the question of other mandates. Would VDOT remain the final word on construction standards?

    What benefit would devolution be to counties?

  2. The world population of autos has now passed one billion vehicles.

    I project that there will be more roads built.

  3. The world population of autos has now passed one billion vehicles.

    I project that there will be more roads built.

  4. devolution is the way to go. all of Virginia’s cities and towns do their own roads – to their advantage in terms of flexibility and with respect to development.

    two counties in Va also do their own roads and in both cases those counties play a much larger role in deciding what they want, when they want it and how they will pay for it.

    Va should offer the counties a local option indexed gas tax as a “sweetener”.

    since it would be indexed – it would keep up with inflation.

    the idea about a “real” lockbox is well-intentioned but wretchedly naive.

    no lockbox is ever safe from politicians… ever…

    but looming on the horizon is the inevitable technologies to reduce the consumption of gasoline – ergo – the gas tax will inevitably fail to function as it has in the past in terms of revenues.

    The only way the gas tax “worked” was when gasoline was cheap and cars got crappy gas mileage.

    as cars get more and more efficient, the gas tax will generate less and less funds for roads.

    problem is people don’t want to pay gas taxes anyhow.

    you can’t build new roads without a viable funding source. That pretty much insures that major roads (not local) are going to be toll roads.

  5. Groveton Avatar

    “3. VDOT’s FY 2011 budget for secondary maintenance and operations $3,240/lane mile statewide. FY 2011 payments to Arlington=$16,121/lane mile and Henrico=$9,101/lane mile [counties responsible for their own roads]. FY 2011 payments to cities = $17,180/lane mile [principal and minor arterials] and $10,087/lane mile [collector and local streets].”.

    I assume the disparity in lane/mile costs is because more cars travel down those land miles in more densely populated areas. This, in turn, causes more wear and tear and requires more maintenance.

    Is that right?

    If so, any idea of the cost per vehicle mile driven vs. lane miles?

    As far as Bosun’s thoughts on devolution – right on the money!!

    No devolution of responsibility without a constitutionally mandated devolution in the raising of taxes for local transportation too.

    One again, Richmond has failed.

  6. Groveton Avatar

    “Va should offer the counties a local option indexed gas tax as a “sweetener”.”.

    Va (meaning the clown show in Richmond) can shove their offered sweetener where the sun don’t shine.

    They need to have all responsibility for transportation taken away.

    They need to go back to Old Hickory Golf Club and stay there.

    Our state government ought to have all the power of the English monarchy.

  7. Sean Connaughton supports higher taxes?

    Color me surprised.

  8. Groveton – the statewide figure is an average of the VDOT districts, but it shows the disparity between what VDOT spends in Henrico vs. Chesterfield, for example. Regardless, the state would have to come up with big bucks to pay counties to maintain the devolved roads, regardless the wear and tear.
    Local option taxes for local roads represents a ‘poison pill’ to local elected. If the electorate punishes state elected for raising taxes, will they not do the same for locals?
    Like everything, it all boils down to money. Will larryg support the state spending tax dollars to repair the roads before devolving them back to the counties? Will he support giving counties the same amount as Henrico or cities and towns? If so, where will the state get the money?

  9. LarryG would. But understand that VDOT is already giving back all of the money. There is no secret vault in Richmond. The reduced funds are a direct result of the gradual erosion of the gas tax by more efficient cars.

    ya’ll talk like Virginia has a giant secret fund that they could give to the counties but are holding it back ….. amusing…. 🙂

    If nothing changes with respect to the gas tax – less and less money will be available to the counties and it will get worse, not better.

    local option – poison pill? Nope. Two pieces of evidence. Transportation referenda have passed a number of urbanized counties of late – and two local option taxes for things meals and lodging have passed in those same urbanized locales.

    local option in the rural counties? I agree.

    but note once again that the Standard nationwide in the US is for the State to keep most or all of the gas tax and still make the counties responsible for local roads.

    In some places, there are actually elected road commissions similar to elected school boards and they levy a separate tax rate for the roads.

    In most of those jurisdictions – a subdivision is often not a govt-maintained road but an HOA responsibility. In Va, everyone who lives in an apt or townhouse pays for their own roads and essentially subsidizes those who live in subdivisions with state-maintained roads.

    A lot of VDOT-bashing but over the last 4-5 Govs, every one of them has “reformed” VDOT even as VDOT is routinely ranked in the top 5 in the country in terms of cost-effective operations.

    Finally, we need to hold local govt more accountable to the practice of using VDOT to pay for what should be developer-paid infrastructure and use the tax money to deal with safety and congestion reduction improvements.

    Connaughton has become a bit of a target because of his apparently willingness to assume a higher profile and to assert that there are such things as roads of statewide significance, access management and devolution.

  10. Groveton & Bosun – I have been aware for some time that VDOT seems to give Arlington & Henrico more money per lane mile than it spends in other jurisdictions — read Fairfax County. (I don’t know about cities and towns, which also maintain their own roads and receive funds from the state.) Obviously, this would not be possible if all local roads went to local control.
    Fairfax County has been talking about taking over its roads, but I don’t think it will ever offer to do so. Officials are nervous about the likely need to raise taxes and (IMO) still like the ability to blame Richmond for the traffic mess when the County has approved all of the development that created the mess. But there is a glimmer of hope. Because of the 527 process, citizen activism, and a list of un-kept promises from developers, Fairfax County is truly trying to link the rate of development at Tysons to the arrival of road improvements. That is not an easy task. We don’t want the roads to precede the development and burden landowners and taxpayers, while we can’t live with the development arriving without the roads.
    Just as the 527 process has been an excellent change, so to would linking land use, transportation and taxes at the local level. But I won’t hold my breath.

  11. Groveton Avatar

    “ya’ll talk like Virginia has a giant secret fund that they could give to the counties but are holding it back ….. amusing…. “.

    “When faced with bizarre behavior, one has a choice. Attribute the bizarre behavior to conspiracy or attribute it to incompetence. Incompetence is almost always the right answer.”. — Groveton’s Dad.

    I doubt the presence of a secret fund in Richmond. However, I am convinced of the absence of intelligence among those in the General Assembly.

  12. well.. it’s not Virginia is the only State that has funding shortfalls for roads. Virtually all states are having the same problems – even states that make the counties handle local roads – and many states are now building toll roads.

    and I find it also amusing that folks are opposed to toll roads if they are operated by the private sector – they want the State DOT to do it…but then if the State DOT does it then they are incompetent and inefficient.

    damned if you do……eh?

  13. Let’s not forget the $200 million subsidy for overweight trucks.

  14. Raising more road funds by weight….
    Has there ever been a thought to having vehicle registration fees matched to the vehicle’s weight.? Not just a cheap flat fee for everyone.
    It’s that weight that’s breaking up the roadways. Rolling weight, tire squirm weight, sitting in traffic vibrating weight. Semis and commercial carriers are the biggest destroyers.
    Why should a Hyndai pay the same as a commercial carrier or tandem tractor trailer.
    I’m a Californian and I had been paying this way for years. Until I got to cheap Virginia.

  15. well. trucks already pay more but the problem is that unlike Europe – we do not construct roads to the depth they need to be to carry the weight that we allow on them – and if we did – and we charged trucks accordingly – shipping costs would go up to pay for it and we’d end up paying for it anyhow.

    but the DOTs have slowly been pushed into figuring out how to stretch their decreasing revenues… and along with maintenance.. they now do new construction on the cheap…. hoping that by the time the road needs to be rebuilt the funding situation will have gotten better.

    It sure seems funny that when we have politicians “courageous” enough to tell us they have to cut SS and Medicare…. that they lack the courage to tell us that the gas tax has not changed in decades and must be updated to current construction and maintenance costs.

  16. What, exactly, is the problem with a gas tax increase? It’s basically still a user fee, we just collect the toll at the pump instead of a tollbooth.

    Very little of the gas tax revenue actually goes toward public transit, and that serves to reduce congestion in our most crowded areas, so it’s still something I’d imagine most drivers would support.

    If we’d phased in a 10 cent increase over the last three years, no one would have ever noticed and we’d have $500 million more per year flowing into our transportation trust fund.

    The gas tax is 13 cents higher in North Carolina and their average price at the pump isn’t significantly different from ours, so there’s a chance the increase in the gas tax wouldn’t translate directly into a penny per penny price increase.

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