by James A. Bacon

I have come to a reluctant conclusion: Virginia’s business leaders are intellectually bankrupt when it comes to solving the most pressing public policy issues facing Virginia. They have nothing to contribute beyond the same tired nostrums that have proven unworkable for a decade or more.

Nowhere is this lassitude of mind more evident than in the realm of transportation policy. This morning I attended a two-hour conference hosted by the Hampton Roads, Richmond and Fairfax County chambers of commerce  which framed Virginia’s transportation crisis as a problem of insufficient funding. I endeavored to report the proceedings of that meeting dispassionately in the previous post, “The Tax of Inaction.” With this post, I put my personal spin on the issues.

Upon one thing I can agree. Virginia does face a transportation funding crisis. I concur with the broad proposition that we must invest in our transportation infrastructure in order to maintain our economic competitiveness and our quality of life. I also accept the McDonnell administration’s analysis that, absent new revenues, Virginia will run out of state revenues to pay for new construction by 2017. Indeed, the situation is so dire that we will soon thereafter run out of state funds to match federal dollars for new construction.

Here’s my problem: Business leaders apparently are willing to increase taxes — exactly which taxes was not clear from the morning’s deliberations — without pre-conditions. Their advocacy of taxes is not contingent, for instance, upon setting up a system for ranking projects on a Return on Investment basis to ensure that funds aren’t squandered upon political projects with a low economic return. Taxes are not contingent upon governance reforms that would align transportation with land use planning. Taxes are not contingent upon exploring alternatives to laying rail and asphalt, such as investing in smart roads — using sensors and algorithms to dynamically optimize traffic lights — or encouraging private-sector competition in shared-ridership services.

Moreover, no principles were discernible this morning for determining how to fund transportation projects. The prevailing ethos is to find tax dollars from whatever source can be sold politically. Whether the money comes from tolls, gas taxes, income taxes, sales taxes or some grab-bag of miscellaneous levies and fees does not appear to matter. Such political pragmatism would obliterate any semblance of a user-pays system in which those who use or benefit from a transportation project are those who pay for it. There seems to be no awareness that when someone else pays, the demand for transportation improvements always will be limitless.

Conference participants lamented the difficulty in “educating” Virginians as to their true best interest in boosting taxes. There was no sense that citizens resist raising taxes because they fear the money will be spent to benefit others, be they special interests or other regions of the state.

Mark Peake, Lynchburg district representative to the Commonwealth Transportation Board, told me that CTB members were discussing this very point the evening before Wednesday’s board meeting in Winchester. Northern Virginians are certain Richmond gets more than its fair share. Hampton Roads is convinced that rural Virginians make out like bandits. Rural Virginians swear that the big urban areas get the lion’s share. They can’t all be right. But nobody knows for sure, so everyone is opposed to raising taxes that think will benefit “the other guy.”

It would seem relatively easy to combat that perception. Just total the state and federal gas receipts, sales tax revenues and other revenue sources generated by each region, add up all the maintenance and construction expenditures for each region, and graph the net contribution over a relevant period of time. Then let’s compare. If the money is distributed reasonably fairly, then the issue dissipates. If some regions are favored over others, then adjustments can be made.

The other issues will be harder. Virginia needs to develop a methodology for calculating a project’s ROI based on congestion mitigated, safety improved, economy stimulated and pollution reduced. Lawmakers also need to devolve responsibility for secondary roads to county governments — and provide adequate funding for localities to do the job. Finally, the General Assembly needs to formulate a tax system based upon the principle of user-pays. Otherwise Virginians will remain convinced that they’re paying taxes to sweeten the pot for developers, big contractors and politicians.

It’s one thing for the politicians to perpetuate business as usual. It takes no imagination or insight to throw more money at a problem. But it’s a sad day when Virginia’s business leaders endorse the stale conventional wisdom of the past 25 years. If they conducted their corporate affairs that way, they wouldn’t stay in business very long. Virginians count on business lobbies to act as a counterweight to the worst instinct of the political class. If this is the best they can do, I fear for the future of the commonwealth.

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  1. aren’t these the very same folks who say Obama is a socialist and we need to elect Romney and cut taxes?


    I’m getting an incoming transmission.

    lower taxes on business and business people, increase taxes on the driving public and a great side benefit is all the new direct and indirect business opportunities that will accrue …..

    and why should business care whether it’s taxes or tolls?

    because tolls affect how much people drive and it also increases business transportation costs.

    just curious – were the trucking associations represented in this meeting?

    1. “Aren’t these the very same folks who say Obama is a socialist and we need to elect Romney and cut taxes?”

      Maybe some. But a discouraging number of business people, especially in the corporate world, are perfectly comfortable with Obama.

      “Were the trucking associations represented in this meeting?”

      Yes, Dale Bennett was there. Before the formal meeting began, I grilled him on the matter of under-taxation of the trucking companies, and he gave a spirited defense of current practices. I wasn’t taking notes so I can’t quote him, but the issue has several layers of analysis. One of these days, if I have time, I’ll delve into it.

  2. reed fawell Avatar
    reed fawell

    Boy – is this article discouraging. If not these folks, then who?

  3. DJRippert Avatar

    Our elected officials are imbeciles. Dissembling, corrupt imbeciles.

    You can’t freeze the gas tax in cents per gallon and expect any outcome other than the one we now have. No other state has frozen their gas tax since 1986 except Alaska – a state that sends checks to its residents from oil company exploration fees.

    Tolls are a joke. Route 81 was going to have tolls until the trucking industry asked their bought and paid for politicians to kill the idea. The only places which have tolls are the places that have failed to buy off The Imperial Clown Show in Richmond.

  4. Why isn’t the “Bi-County Parkway” a/k/a a segment of the Outer Beltway being built as a toll road? Over time, how much money would that free up for other projects? Whoops. I forgot. Til Hazel and some other landowners want this road constructed on someone else’s dime.

  5. Interestingly, Fairfax County, which is crying for higher taxes for transportation, is in the process of cutting Capital One a sweetheart deal on Tysons Road Fund fees. Several years ago, Cap One received rezoning approval to build three more buildings totalling 600,000 sq ft. This triggered a Road Fund payment obligation of $ 4 and change per sq ft.

    Now, Cap One no longer wants to build those three buildings, but has received approval to build two different and much larger buildings. It needn’t re-zoning approval because it wanted to build something different that what has been approved. Re-zonings now trigger a Road Fund payment of $6 and change per sq ft. But Cap One claims it has zoning approval for 600,000 square feet, such that it’s Road Club obligation is $1.2 million less. And guess who’s position is being adopted by the BoS? Yes, the same county that says residents need to pay higher taxes is giving a big, influential landowner a sweetheart deal. Precedent anyone?

    Old Judge Dillon had these local government officials figured out. They stand ready to swindle their constituents, even today.

  6. we end up with the same type of thing down here. They vote for proffers and road impact fees but when a company offers something the county wants – like jobs or taxes, they roll over pretty easy.

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