Now It’s Official… Senate Most Likely to Cave in Budget Impasse

I look to Jeff Schapiro, arguably the most loquacious and best-connected journalist covering Virginia state politics, as a barometer of the latest conventional wisdom in the Capitol. Here’s what he writes in his weekly column about the budget impasse:

The betting is that the centrist Republicans who lord over the Senate ultimately will cave on $1 billion a year in new taxes for transportation to spare the state from going without a budget after July 1, the start of the spending cycle.

There you have it. The assessment of Richmond’s political insiders, as digested by Schapiro, is that the Senate will capitulate. Schapiro then proceeds to examine the implications of the House of Delegates’ “huge, albeit temporary, victory.”

The House budget, Schapiro writes, will give transportation only a “temporary fix … just enough extra jack for roads and transit to get through ’07.” Between an expanding maintenance budget and escalating costs for new construction, he concludes, Virginia soon will run out of money for road-building altogether.

I will defer to Schapiro’s reading of the immediate political situation, but I think he is overlooking a number of factors impacting public reaction to the defeat of the $1 billion-a-year tax proposal.

First, tax hike or no tax hike, the Kaine administration is moving aggressively to finance major road construction projects through public-private partnerships. Secretary of Transportation Pierce Homer has laid out a vision for toll funding of HOV lanes or other improvements for all four of Northern Virginia’s major transportation arteries — the Capital Beltway, Interstate 66, Interstate 95 and the Dulles Toll Road — and we’ll soon see details on comparable proposals for major arteries in Hampton Roads. One of these days, the Kaine administration also may decide on how to proceed with prickly Interstate 81 public-private partnership proposals.

Second, I’m willing to bet that the House of Delegates has more to contribute on the subject of transportation financing. House leaders have been so busy fending off the tax increase this year that they haven’t had the opportunity to lay out their long-term transportation vision. I would expect House Speaker William J. Howell to propose privatizing certain transportation assets and reinvesting the proceeds in projects designed to relieve congestion-causing bottlenecks. Such proposals will be highly controversial, to be sure, but it will be impossible to paint the House as “doing nothing” on transportation.

Third, I expect we’ll see more moves to overhaul the efficiency with which the Virginia Department of Transportation spends its maintenance dollars. The Senate and House have agreed already to permit design-build contracts, and we may see additional moves to outsource more.

Finally, there is always the possibility that the Kaine administration and both chambers of the General Assembly will recognize that, in the absence of new geysers of tax dollars, they need to fundamentally re-think Virginia’s emphasis on adding new transportation capacity to accommodate every up-tick in demand. We could conceivably see lawmakers giving more attention to the demand side of the equation: congestion pricing, land use reform, telecommuting/telework, and encouraging the private sector to get more creative with carpooling, van-pooling and bus services.

One thing we can count on: The transportation debate will be with us for a very long time.


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8 responses to “Now It’s Official… Senate Most Likely to Cave in Budget Impasse”

  1. Ray Hyde Avatar

    I have pointed out previously that travel and GNP are almost exactly correlated. Correlation and causality are not the same, so surely there are ways to reduce travel demand that don’t necessarily reduce commerce, and may even increase it: telecommuting being a case in point.

    However, as a general rule, I have never seen any analysis of how reducing travel might affect us in other ways. I had hoped that there would be some usable information to come out of the London Congestion charging experiment, but so far that has not happened.

    Business appears to have fallen more in London than in other areas (5.5% vs 0.5%), but the London bombings are surely part of the reason. The C-charge only covers a small area, so you cannot measure its effect on “London”. Anecdotal evidence suggests that restaurants that used to have two sittings now have mainly the later seatings – after the C-charge expires. Tourist attraction revenues, like the Tower of London, are down.

    As it stands now the spin from business is that it is hurting business and the spin from the government is that it is not. One argument that has been made is that the business decline in the central area is offset by business increases outside the zone. Revenues from the scheme have not met expectations, because compliance (lack of fines) has been higher than expected and traffic declined more than expected. One result was that government increased the charge, rather than lowering it!

    It appears that motorists can change their habits. Cab fares and revenue have fallen because trips now take less time on the meter. Is that a gain or a loss? Depends on whether you drive or ride, I suppose.

    I have not yet found any reliable data on the overall economic effects due to the effects of spin. There is one academic report out of France that claims the C-charge costs outweigh the benefits by 50 million pounds per year, and they didn’t examine businesss results, just the direct savings from auto use and congestion.

    Eventually, I suppose that valid figures will appear. Until then the supposition that travel demand reduction is a good economic or tax revenue thing is just that – a supposition. Congestion pricing, land use reform, telecommuting/telework, and encouraging the private sector to get more creative with carpooling, van-pooling and bus services are all ideas that have a place, but for each of them it is unclear to what extent they will have the desired effect, and it is unclear what the costs will be, or to whom they will accrue.

  2. Toomanytaxes Avatar
    Toomanytaxes

    Ray,

    I think that you have corectly noted we will be dealing with much uncertainty. I further suspect that you are also correct in that some other “solutions” will work better than others.

    I’m not so certain that there is such a close tie to transportation and economic growth. I could well be wrong, but we may find that transportation costs have been a drag on some sectors of our society, while a positive force in others. For eons, humankind worked in or near their homes. Could that be a more natural pattern? On the other hand, there seems to be some evidence that we’ve had more economic growth since we generally no longer work at or near home. But even if the latter is true, is there a point after which transportation ceases being a positive and becomes a drag on productivity?

    I suspect that, if the Commonwealth now longer has the will to construct massive transportation infrastructure, there will clearly be winners and losers. Where the winners and losers net out is probably uncertain. We might stagnate, or we might start making better decisions allocating resources.

  3. Anonymous Avatar
    Anonymous

    Ignoring transportation is the Kiss of Death for the House GOP in the next elections.

    Sure, some will survive because they are in rural districts, but those members that represent urban and sprawling districts will have a tough time convincing voters they did the right thing by ignoring transportation.

    There is so much ammo out there that a challenger could use against them it’s almost unbelievable.

    Plus, Republican’s at ALL LEVELS must deal with an unpopular President, Defense Secretary, etc. Ask around up on Capitol Hill and any member of the Republican Party will tell you they are worried about upcoming elections because of the mess Dubya has created. Members of the Virginia House of Delegates should feel the same way – for the same reasons.

  4. James Atticus Bowden Avatar
    James Atticus Bowden

    Or, Anon, the Virginia Senators who raised our taxes in 04 creating huge surpluses and tried again in 06 without a plan that would work to actually help improve transportation will pucker up for that Kiss of Death in the 07 primaries.

    The dissatisfaction with National Republicans and the R label is two fold. The Liberals are in a hurry to surrender in Iraq and have been stewing in outrage that they are out of power since Nov 00. Many Conservatives are unhappy that the Republicans in power can’t control the border against illegal alien invasion, can’t control spending, can’t expand energy sources, and still can’t get a number of conservative judges on the bench – although they won the SCOTUS seats as far as we can tell.

    The Virginia HD GOP stalwarts will be nominated and elected if they run as conservatives.

  5. James Young Avatar
    James Young

    Now that’s “Good Copy”!

  6. Anonymous Avatar
    Anonymous

    JAB:

    “Conservatives” tried to “primary” moderate Senators in 2003 and failed miserably.

    You’re right, that may very well happen again but the results in the general election shouldn’t come as that big of a surprise, just ask Mick Stanton.

  7. Ray Hyde Avatar

    VMT and GNP track almost exactly, including the fuel “crises” in the 1970’s. Causality is another matter. But we know that GNP is related to the stuff we buy. In order to buy stuff we go to work, then go to the store. All that stuff has to be shipped (probably through port of Los Angeles). True enough, for eons people worked close to home, and had more or less subsistence living. I have no doubt we can cut down on travel demand by making people poor.

    It is hard to make a political platform out of that.

    I’m frankly surprised that the situation on 66 near the beltway hasn’t resulted in riots, yet. Probably the most cost effective and novel transportation technology in years is the slug line. Why is it effective on 95 and not on 66?

    Fair Growth Fairfax got their hat handed to them on the Metro West deal. Anyone think they are going to take that lying down? Yet, it will be years before we can determine if the project lives up to its promises. If it is all rented it will be a success. But what if all those people are commuting to Warrenton by then? War or no war, conservative or liberal, we are going to have to do something (many things) about transportation, or there will be repercussions.

    Just today I read an article by Richard L. Morrill, professor emeritus of Geography at the University of Washington. He was chair of the program for a Ph.D in urban design and planning. No geographic illiteracy here.

    “Any realistic and fair assessment of mobility requirements for a large metropolis reveals that significant investments are needed in both road and in rapid-transit systems. Anyone who imagines that we can get by with just roads or just transit is not facing the real world. One is not better than the other; they serve different needs.” [We have] “Under-investment in transport capacity, for public transit, for quality roads and for off-street parking.”

    “Density? Minor, but opposite of what many believe. The higher the density, the greater the congestion. Although higher density reduces auto dependence, and increases transit usage, congestion also rises because the demand for trips-per-unit-area increases faster than the shift to transit. Note that Los Angeles and San Francisco have more congestion and are also about double the density of Seattle.” … “The larger the city, the greater the congestion, simply because of specialization, larger concentrations of jobs and of people and the greater separation of people and activities.”

    “Land use: A general area-wide rise in density and concentration of jobs cannot help, because it is not enough to help transit, but is enough to hurt road performance. The only effective land-use strategy is to foster much greater density (two to three times) in selected job and apartment-rich corridors, capable of inducing significant shifts to transit. …..This strategy is hard to implement, as it means the transformation of some neighborhoods. Such high-density, transit-rich corridors can accommodate up to perhaps one-third of jobs and of people that thrive in such settings, but we need to remember that the other two-thirds of the economy and of people will remain car-, truck- and house-oriented. “

    “One problem is the seeming incompatibility between rail stations as focal points for intensive job and residential development, and as sites for large-scale park-and-ride lots to intercept long-distance commuters.”

    Sounds like Metro West, doesn’t it?

    With regard to road construction he says

    “The kind of construction package that would help the most would include three kinds of projects.

    — Drastic improvements in the network of arterials. Our system is horrendous! Investment is needed to widen many arterials to four lanes; …..not to mention many overtaxed two-lane arterials…
    — Some major projects……
    — HOV lanes.”

    And as for growth control

    “To reduce growth to under 1 percent per year would mean bringing migration into balance – as many leaving as arriving. To stabilize the population would require massive net out-migration…. in a migration-balance scenario, as much as a quarter of our population would move to other regions, and be replaced by newcomers – just because people move around a lot. A stable-population scenario would probably mean about 30 percent of our people leaving per decade – indefinitely – and being replaced by 20 percent coming in. Probably about half of those leaving would be kids graduating from high school and college, but not finding jobs in the region – exactly the story of cities that have no growth or slow growth.

    So the ONLY way to reduce growth significantly is to make the region less attractive and hospitable by creating and maintaining FEWER JOBS and to reduce our appeal to those not concerned with jobs.”

    “Also, while about two-thirds of migrants come because of our vibrant job prospects, about one-third come just because the region is attractive and has a great reputation.” (Sounds like Virginia)

    He goes on to say that

    “Mobility sustains our economy and is vital to our well-being. Yes we devote up to one-quarter of our GNP on transportation; but that makes the other three-quarters of our lives possible. Mobility is not cheap….

    People clearly don’t like these measures[Demand management], and political leaders are understandably afraid to support them, but if we are serious about congestion, there is no alternative.”

    And finally

    “Finding a reasonable win-win resolution to congestion and future mobility is made more difficult by the inflexibility and zealotry of too many of the actors….Solutions are possible, but not easy or cheap, or perhaps politically acceptable….”

    Sound familiar? These quotes are from 1999, and a continent away. One thing we can count on: The transportation debate will be with us for a very long time.

  8. Ray Hyde Avatar

    BTW: I notice a lighted highway sign advertizing for VDOT construction workers. Evidently the word is out to VDOT, too.

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