Subsidies for the Driving Class

The state Senate has spiked a proposal to slap a 5 percent sales tax on gasoline, and the House of Delegates has passed its package of transportation taxes, land use reforms and VDOT restructuring. Now it’s time for the House package to cross over to the Senate for consideration.

So, this is what it’s like making sausage. The process is truly nauseating… Read the coverage and reach for your vomit bag:

Richmond Times Dispatch
Washington Post
Fredericksburg Free Lance-Star
Associated Press
Northern Virginia Daily

As I plow through the details of the legislative process, I am reminded of the observations of fellow Bacon’s Rebellion columnist Ed Risse, who long ago discounted the possibility of anything meaningful emerging from the session this year. I had maintained hope that some incremental progress would be made, and that legislators might demonstrate a growing understanding of the problems we’re dealing with. But the awful truth has dawned upon me: Legislators will succeed only in raising our taxes this year, not in addressing traffic congestion. Once again, it appears, the forces of Business As Usual will prevail. The citizenry will wind up poorer and still stalled in traffic.

I have dedicated many pixels to flaying the Axis of Taxes proposal to boost the gasoline tax as a way to preserve the massive, non-transportation spending programs funded by the General Fund. But at least a gasoline tax has one undeniable virtue: Those who drive are the ones who pay. By contrast, the Republican supporters of the compromise plan avoid the gas tax at all costs. Why? The only justification I’ve heard is that it would be burdensome to drivers, often those who can least afford it.

Instead of a gas tax, the GOP proposes increases auto registration fees, boosting the tax on diesel fuel, taking $250 million from the General Fund instead of rebating the surplus to taxpayers, and giving regional authorities in Northern Virginia and Hampton Roads power to impose their own grab-bag of taxes. Are those taxes going to impact Virginians any less than a gas tax? No! Taxes are going to come out of the pockets of taxpayers one way or another.

The difference is that while the gas tax is transparent — motorists are reminded of it every time they top off their tanks — the GOP revenue flows from so many different sources that taxpayers are only dimly aware that their pockets are being picked. Where the gas tax is open and honest, the GOP tax mix is furtive and sly.

Transparency is critical. When you raise the gas tax, taxpayers can see what’s happening. If they don’t like paying the tax, they can change their driving habits in ways that benefit the public good. They can start car pooling, ride a bus or take the Metro. If they’re looking for a new house, they can move closer to where they work. If they have an office job, they can ask their boss to let them telecommute a couple of days a week. If the gasoline tax induces even a few people to change their behavior, it reduces congestion.

By contrast, raising the registration fee on cars imposes costs on all car owners without respect to whether they drive 3,000 miles a year or 30,000. Raiding the General Fund to pay for roads is even worse: It obliterates any vestiges of a connection between those who drive and those who pay. The end result: The GOP compromise package will subsidize those who drive the most — those who contribute the most to traffic congestion — at the expense of those who drive the least. Such an approach is incomprehensible.

In a desperate bid to stave off an election debacle, to say that they’ve “done something,” the GOP legislators have abandoned any pretense of economic rationality. Their compromise package does have elements worth saving: particularly the proposals that would restructure the way roads are built and maintained in Virginia. But those reforms, as useful as they are, won’t begin to un-do the damage of continued subsidies for the driving class.

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20 responses to “Subsidies for the Driving Class”

  1. Anonymous Avatar

    “incomprehensible.” Agreed. You and I disagree on the need, but we agree that if there is to be more money it should be based on usage of the transportation system.

  2. Reid Greenmun Avatar
    Reid Greenmun

    IRT “Raiding the General Fund to pay for roads is even worse: It obliterates any vestiges of a connection between those who drive and those who pay.”

    (1) No – it is not. State roads are a priority – they should be treated as such. The Transportation Trust Fund (TTF) is bogus – it doesn’t protect anything.

    (2) Okayyyy – how about all those decades of robbing money FROM the TTF and dumping it into the General Fund – for ??? Quick – name what the billions of TTF dollars were spent on!

    You can’t – – can you? Not without googling stuff and doing research.

    The TTF is a scam – face it – let’s abolish it and put transportation back into the mix with all other General Fund priorities.

    It has been nearly 4 years since the failed November 2002 Regional Sales Tax Referenda in HR/NORVA to increase transportation funds – – what exactly has been accomplished to amend the state Constitution to protect the TTF?


    That inaction reveals the lack of urgency to protect the TTF – thus, it is NOT a “trust” at all – so, let’s get rid of it – it is a sham.

    Let’s see – the Governor wants to add to the Democrat Nanny State by adding NEW SPENDING for day Care!!!! But the Transportation “crisis” can’t be addressed using General Funds – not even a SURPLUS?????

    The “separation” of the General Fund and TTF scam needs to go – it’s bogus, disingenuous, and deceptive – and we all know it.

    What we are witnessing is an incredible increase in the explosion of the sate budget/spending – and Transportation is treated outside the budget as the “tool” to “force” more tax hikes – and not prioritize explosive state spending increases.

    Which is more “critical” – funding new entitlements for state paid DAY CARE – or fixing our roads???

    It is a “debate” we do NOT witness because of a political shell game called the TTF and the General Fund.

    Folks – the Democrats are opposed to even spending future SURPLUS tax funds on transportation – let alone reaching into the existing budget and reprioritizing state spending to live within the state’s means – and avoid more tax hikes!

  3. Anonymous Avatar

    Dear Jim Bacon:

    The legislative process is working
    as it should in the oldest continous democratic leglistaive body in the New World relative to
    the status of the so-called transportation compromise package.

    Your comments about needing a barf bag and being concern Virginians
    having their pockets picked is out
    of line.

    Nor should you be upset that the
    press is reporting the events in
    Richmond. I think a free press is
    a cornerstone of our country.

    Chill out Mr. Bacon. The world is
    not coming to an end.


    Rodger Provo

  4. Groveton Avatar



    Absolutely brilliant!

    You really should send you post in, as a letter to the editor, to all of the newspapers cited by Jim Bacon.

    Drivers should pay for roads but …

    Those who use day care shouldn’t directly pay for day care

    Those who use the public schools shouldn’t directly pay for their education

    Those who benefit from economic development programs shouldn’t directly pay for those programs

    Those who attend public universities shouldn’t pay all the costs associated with their schooling

    If it’s paid for by the General Fund it’s a right.

    If it’s paid for by the Transportation Fund it’s a privilege.

    Raiding the General Fund is an immoral, almost criminal misdeed.

    Raiding the Transportation Fund (by not adequately funding it) is just good public policy.

    According to the Fairfax County Taxpayers Alliance:

    Since 1979 the population of Virginia has grown 43%

    Since 1979 transportation funding (adjusted for inflation) has grown 33%

    I wonder what’s been happening to non-transportation funding since 1979?

  5. Anonymous Avatar

    Jim you’ve seen the light!

    Go further and realize we need to do a better job of taxing vehicles based on weight and the amount of miles driven each year. Stop funding all additional lanes on roadways. Make sure out of state vehicles pay their way through virginia. And make sure VDOT won’t any secondary road into its system unless that road provides good connectivity.

  6. Ray Hyde Avatar

    “how about all those decades of robbing money FROM the TTF and dumping it into the General Fund”

    Good point. There is no point in having dedicated funding unless it is really dedicated, and unless those who use the services pay for it.

    “Make sure out of state vehicles pay their way through Virginia.”

    Careful, you may be treading on interstate commerce. Why set up a competion among the states to restrict free trade while we are competing for our lives against foreign interests. Would you want extra taxes every time you go to visit in another state? Why not collect a fuel tax and be done with it? Out of staters buy fuel too.

    I can tell you this. If this goes through I will junk my four farm trucks and get one big wasteful one. I don’t think that’s the desired result.

    I concede. Larry was right. A fuel tax is a political non starter, even if it does make the most sense.

    “I wonder what’s been happening to non-transportation funding since 1979?”

    How about comparing it to 1986, the last time the fuel tax was raised? I suspect your argument would be even more compelling.

    Speaking of compelling, isn’t it amazing how much more so internally consistent arguements are. I’m afraid Reid, Groveton and Anonymous win by a TKO.

    Too bad they aren’t in the GA.

  7. Larry Gross Avatar
    Larry Gross

    Tell me how much of the VDOT budget does NOT come from the gas tax?

    You’ll be suprised at the answer.

    HINT: VDOT gets 1/2% of the sales tax that everyone pays .. no matter what kind of vehicle they drive.. or how much or on what roads at rush hour.

    The concept of the TTF was to have a dedicated source of revenue tied to users of the roads and it was that aspect that justified the idea that the fund should be dedicated to the purposes that people paid for.

    When it was extended to included the 1/2% .. and NOW the General Fund whether it be surplus or not – the concept of the TTF was violated and it now becomes just like any other budget item – subject to budget priorities.

  8. Larry Gross Avatar
    Larry Gross

    re: TTF

    Option 2 – take away the 1/2% and REQUIRE that the TTF ONLY get revenues from gas taxes.

    How about that?

  9. Jim Bacon Avatar

    Anonymous 8:34, I’m already there. I DO support the “taxing vehicles based on weight and the amount of miles driven each year” — see my column “The Oregon Solution.” And I do think it’s a good idea to stop take subdivision roads into the state system unless they provide “good connectivity” (see “Pod People” for commentary on the importance of neighborhood connectivity.”)

  10. Larry Gross Avatar
    Larry Gross

    A question for folks.

    Who has a cell phone and who has vehicle tags?

    My point is that the state already knows the type and weight of your vehicle.

    Those who have cell phones.. have you every looked at your detail bill and essentially marvel at not only all the calls you made but the technology behind “caputuring” every single on of those transactions and charging you a different fee determined by time of day?

    This SAME technology already exists for roads.

    You don’t need a GPS or other complicated gadgets.

    You don’t need to have sensors on every road.

    All you need to do is use existing ubiqutous sensor technology – already in use in thousands of worldwide locations….to have your vehicle self report the miles that you put on SOME of those roads and then, just like with the cell phone, receive an itemized bill every month for your use.

    For those that don’t want the sensor, your license plate will be captured (again with existing techologies) and you will receive a bill that will include your share of the extras costs associated with the camera sensors.

    If we imposed on Cingular and Walmart what we say are reasons why we cannot do tolling… there would be no check-out scanners… and phones would be charged at a set price and BOTH would charge you more for the incorporated expenses of NOT using modern technology to deliver a needed service for a reasonable price.

    In essence, we are choosing to not employ existing technology to provide us with more productive mobility at a reasonable cost .. and prefer to stick with a system that is delivers grossly inefficient mobility and unrelenting congestion.

  11. Groveton Avatar

    Well …. all this discussion on Baconsrebellion has compelled me to action.

    I am forming a grass roots “Stop the Robbery” NOVA taxpayers organization. Developers, builders and Dominion executives are not welcome in this organization.

    I will propose an approach to the 2007 State elections. We will all commit to support certain challengers from Northern Virginia. However, we will only support the challenging candidate if:

    1. He / she acknowledges the long running subsidy of ROVA by NOVA. This subsidy must be quantitatively estimated for the last 10 years and must be prominently displayed on the candidate’s web site.

    2. He / she agrees to form a coalition of other state politicians from NOVA without regard to political party or liberal vs. conservative. This coalition will use any legal means at its disposal to reduce the NOVA to ROVA subsidy. They can argue all they want about whether taxes should be increased or decreased, where the money should be spent, etc. However, they MUST publicly pledge and faithfully act to reduce or end the subsidy.

    3. He / she must agree to look for other areas in Virginia (outside of NOVA) that are paying a subsidy to others – on a total tax vs. total spend basis. He / she must try to get politicians from those areas into the “Stop the Robbery” coalition.

    4. He / she must maintain a complete, thorough and usable web site describing their votes on all legislation and their logic for each vote. They must also publish a quarterly statement to voters on their web site describing the progress being made on the programs I am describing in this post.

    5. He / she must pledge total allegiance to transparency in state government. They will push legislation that creates clear reporting, they will vote for bills that clarify the state government’s actions and they will use their own newsletters, web sites, office staff and public speeches to publicize the truth about the state legislature’s actions – particularly with regard to taxes and the spending of tax money.

    6. He / she will not accept donations from builders, developers or Dominion. I realize that this will be a hardship. That’s why I think the “Stop the Robbery” group will have to pledge more than just their votes to these candidates.

    I am open to other ideas as to what the principles of the “Stop the Robbery” campain should be but that’s what I have so far.

  12. Larry Gross Avatar
    Larry Gross

    Some Friendly amendments:

    1. – A complete and kept up to date statement of Economic Interests INCLUDING all donations, lunches and other amenities provided by 3rd parties.

    2. – The appointment book of each BOS online… for all voters to see.

    3. – A promise to all voters that if 10% of them sign a petition on a particular issue that a Referenda will decide the issue.

    4. – A promise that anytime 10% of the voters sign a recall – that BOS will run for election again.

    5. – A promise to adopt a “Balanced Scorecard” modus operandi

    6. – A promise to conduct a citizen satisfaction survey every year and that for any item that fails to get a 70% approval rating will cause a citizen committee to be formed to make recommendations.

    Those recommendations will be put to a referenda.

    Want More? I have them..

  13. Ray Hyde Avatar

    Larry, in principle I agree with what you say.

    But, I make my living doing implementations of existing technology.

    It is inevitably orders of magnitude more difficult than you describe.

    You will notice that Walmart has a lot more scanners than they actually use most of the time. I’ll wager Walmart knows to the penny how much they can afford to spend on peak capacity infrastructure that goes mostly unused.

    When you can match that level of metrics, I’m willing to listen.

    What I can tell you that works right now is this. I fillup the tank on my truck, fill the truck fullof hay and drive to my customer. Note the gas guage. Drive home empty. Note the gas guage.

    The difference is a factor of two.
    What kind of already deployed sensor tehnology can you envisionto match that accuracy? Those scanners at Walmart are good for what, a few inches? The tollgate at Dulles requires you to slow down to ten mph for the smart card reader to work.

    How many scanners and satellites and transmission towers are you willing to put up to make your plan have as much information as my gas tank already has? Where do you think the spectrum is going to come from to transmit all thismostly useless information?

    It is dumb, Larry, and the Oregon Solution is even dumber. Look at their results, and then tellme that is a model you would like to emulate for a few billion dollars.

    BTW I never suggested that the gas tax is the only way to provide funding, just that is should be a big part. Think greaehouse gs instead of revenue for a change.

  14. Ray Hyde Avatar


    I like the way you think.

    I may not agree with what you say, but I like the process.

  15. Larry Gross Avatar
    Larry Gross

    Ray – the technology not only exists – it is actually in current use worldwide.

    The sensors are a cost of doing business.

    They are no more or less an adverse impact on revenues than WalMarts scanners are perceived to be.

    The bottom line is that Walmart uses scanners because scanners pay for themselves and actually contribute to WalMarts productivity because the scanners not only speed up checkout, they provide valuable information with regard to inventory.

    This same equivalent system can be applied to TOLL roads.

    By the way.. High-speed TOLLING is also a reality… on some roads.

    But my point is… how many sensors are needed is determined by what you want to accomplish.

    For instance, some places are using Cordon Tolls which are one set of sensors on each major road coming into an area…

    The question of when/where/how to utilize sensors is NOT a reason for NOT using them – no more or no less than you or I would question how Walmart utilizes them.

    Would you proceed to tell your cell phone company that the way that they use technology to bill you per call and by the minute is wrong because you essentially do not understand the technology that they are using?

    That’s the argument that I am hearing. The technology is HERE.. right now .. and in use in other parts of the US and the World.

    The argument that I’m hearing is that even though Walmart uses scanners in Podunk, Alabama.. and has been for years.. that it won’t work here.. and then a list of problems are stated… all of which have not proven to be problems in the other areas of the world where the technology is already in use.

  16. Groveton Avatar

    Larry and Ray –

    Thanks for the comments.

    Larry – I definitely want more. Thanks.

  17. Larry Gross Avatar
    Larry Gross

    Groveton –


    For Reference: Balanced Scorecard


    Comp Plans – all roads must have CIPs.

    No CIP – no line on a map.

    The CIP – is a Capital Investment Plan.

    It states what the cost of the road improvement will be and it establishes how it will be funded.

    Each year, the cost data is updated to reflect inflation and the higher cost of right-of-way.

    For the budget – Citizens are presented with referenda for schools with the following options:

    1. – The tax rate that is required for “fully funding” as defined by the school system.

    2. – The amount of funding that will be provided without increasing the tax rate.

    3. – The amount of funding based on last years funding + inflation + student enrollment growth.

    4. – The amount of funding determined by the average per pupil average cost for the state.

    or some similar framework.

    The idea is for voters to determine how much MORE they would like to pay for schools.

    The Referenda would be held each year two months prior to the final adoption of the budget.

  18. How walmart and toll roads use the sensors is utterlyand completely different from what wouod be required to use tolls as a general funding mechanism.

    Even if I concede that some of the technology is available, the business of using it generally and ubiquitously is a much larger problem than you concede.

    Like I said before, complexity is a very real cost driver, even if the technology is flawless.


    George Roche Recently retired as president and chairman of T. Rowe Price. he has this to say out our dependence on foreign oil.

    “When I joined the firm, the U.S. was importing one third of its oil at a cost of $3 a barrel [!]. Today, we are importing two thirds at $60 a barrel.


    I would recommend that we put a very large tax on the price of gasoline and drive demand down. It would be good for the environment, and it would be good for the country, and it’s a very certain way to reduce our imports.

    Consider that taxes on gas in the U. S. are 40 to 50 cents a gallon, while taxes in Europe are $4 to $5. ….. We cannot drill our way out of this, maybe we’ll find more oil [Arctic and Offshore] but the continental U. S. is drilled out.”

    You are right, Larry, a ten cent increase on gas won’t cut it.

    By the way, how do you suppose the Europeans subsidise their supposedly great train systems?

  19. Jim Wamsley Avatar
    Jim Wamsley

    “How walmart and toll roads use the sensors is utterly and completely different from what would be required to use tolls as a general funding mechanism.”

    Only one commenter is discussing using “tolls as a general funding mechanism.”

    The rest of us are discussing using tolls 1) to pay for new capacity or 2) congestion control.

    The new capacity use puts new pavement in the wrong place. The congestion control increases the capacity of existing lanes.

    Be very careful when you look at a toll comment and separate the three uses in you mind.

  20. Larry Gross Avatar
    Larry Gross

    The technology:

    Red Light cameras that capture plate tags “work” just fine.

    In fact, they work so well that those systems can actually pay for themselves and produce revenues.

    Ray – Do you think those same systems could be used to TOLL vehicles?

    How about vehicles with transponders that self report?

    Do you think those transponders works for secure gated neighborhoods or work sites?

    Ray – when you see a SMART TAG lane… that has cars going through it a speed – do you think it is “working”?

    Ray – do you think the Dulles Toll Road “works”?

    re: money

    Ray – why do you recommend a gas tax increase when only 22% of people support it and a similarily small number of GA support it?

    Ray – why are Stockholm and London using TOLLs even when the price of their gas is 3 times what we charge?

    Ray – why have at least 5 states built TOLL roads in the last couple of years – even states that have their gas tax indexed?

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