The Pain Has Only Begun

Bob McDonnell and Creigh Deeds would think twice about wanting to win the race for governor if they’d read the latest edition of The Virginia Newsletter, written by public finance expert Jim Regimbald. The headline of his essay says it all: “Virginia’s State Budget—A Train Wreck About to Happen.”

The recession may be ending, writes Regimbald, but the hard work of balancing the state budget is only beginning. “Rainy day funds, other cash balances built up from better days, deferring various obligations and payments, and, most importantly, federal stimulus funds have kept state operating budget reductions from being reduced even further than they already have. Now the reserves are gone. The federal stimulus funding will soon be over.”

In the next biennial budget, says Regimbald, “Virginia’s state budget will experience the full force of the worst economic downturn since the 1930s. Even more painful changes to state government policy are forthcoming.”

The Kaine administration has used up all the one-time budget-balancing tricks, like delaying state contributions to the Virginia Retirement System. The Kaniacs made a few tough decisions, but left most for their successors. Writes Regimbald: “Over 60 percent of the budget reductions needed for the current biennium were accomplished through the use of one-time sources of funding. This means that the state operating budget is not yet ‘right-sized.’”

Don’t count on long-term borrowing to bail us out. Says Regimbald: “The commonwealth’s ability to borrow additional funds and maintain its ‘Triple A’ credit rating is also restricted.” The Debt Advisory Committee calculated earlier this year that Virginia has the ability to borrow no more than $125 million in new tax-supported debt in 2010 and 2011 and meet the goal of keeping debt under five percent of blended revenues. And that was before the latest round of reduced revenue projections. Regimbald doesn’t say so, but one can’t help but wonder if the AAA bond rating is in jeopardy.

Meanwhile, Virginia unemployment insurance fund has run out of money. Virginia is expected to borrow $252 million from the federal unemployment insurance trust fund.

Want more bad news? How about this: “The reality is that the 2010-12 biennium current services operating budget is still at least $3 billion above forecasted available revenues. Virginia’s Medicaid budget alone will require all of the additional $2 billion in general fund revenues available in 2010-12 to keep the same eligibility and provider reimbursement policies we now have in place.”

What do McDonnell and Deeds have to say about this? Nothing, as far as I can tell. They’re both living in la-la land. You can forget the promises they’re making about all the wonderful things they’re going to do when they’re elected. They’ll have one job in the next two years, and that’s balancing the budget. They won’t be spending one dime on anything new.

The new age of fiscal austerity is upon us. Virginia is feeling the bite before the federal government does because the commonwealth is required by the state constitution to balance the budget. The federal government will continue on its merry way, spending “stimulus” money and adding new entitlements like health reform as long as it can continue borrowing. It’s only a matter of time before Uncle Sam can’t borrow anymore. Then things will get really ugly. Let’s hope Virginia stays solvent when the federal government cannot.

The gubernatorial campaign has been a farce. Neither candidate is addressing the issues he’ll be dealing with as governor. The media is complicit, obsessing over Bob McDonnell’s graduate thesis. And the public is somnabulent, still demanding more services like better roads — as long as “someone else” pays for them. Our fiscal path is unsustainable. Our profligate use of energy is unsustainable. Our environmental impact is unsustainable — and I’m not even counting anthropogenic global warming, which I don’t believe in!

Repent ye, Virginians, of your foolhardy ways! Repent before it’s too late!


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Comments

99 responses to “The Pain Has Only Begun”

  1. You know in every crisis there can be a silver lining – an opportunity and this one is tailor made for the 'no mo tax' folks who spend most of their lives talking about how big and wasteful the government is and needs to have all that waste and abuse dispatched with the finality of a warrior beheading the heathens…

    this is it.

    this is McDonnell and the 'no mo taxers' time.

    it has arrived.

    it's DANG UGLY for the tax and spend types.. they'd rather get non-stop root canals than have to deal with a down budget.

    Consider this cocking the zero-based budgeting gun.

    instead of having to fight the GA folks ..threatening vetoes and all that rot – and he has to say is " we have no choice, we must balance the budget".

    so what's all the fuss about?

  2. Now if you read this from the
    Rockefeller Institute:

    State Tax Revenues Falling Off a Cliff

    "Total state tax collections as well as collections from two major
    sources — sales tax and personal income — all declined
    for the third consecutive quarter. Overall state tax collections
    in the April-June quarter of 2009, as reported by the Census
    Bureau, declined by 16.6 percent from the same quarter of the previous
    year."

    http://tinyurl.com/ygpbhdl

    Virginia is only being nicked compared to some other states.

  3. Gooze Views Avatar
    Gooze Views

    "Double Double Toil and Trouble"

    Jimbo,
    Ya gotta love those Macbeth witches.
    But before you stir your little pot of woe, cosider this from ABC News (albeit a couple of mnths old.

    Of all 50 states only Montana and North Dakota are having no budget problems.

    The 10 worst states are:

    California, Nevada, New York, Arizona, Alaska (Palin?) New Jersey, Oregon, Vermont Washington and Connecticut.

    I'm dissapointed Virginia didn't make the cut! It sure would have strengthened your argument

    Peter Galuszka

  4. Anonymous Avatar

    Why not set the budget by priorities, 10% for this 20% for that, and stop worrying about revenue. let the chips fall where they may: you cannot spend money you don't have.

    RH

  5. Virginia Unemployment Trends – September 2009

    Virginia Unemployment Trends Visualized as a Heat Map:
    Virginia Unemployment in September 2009 (BLS data)
    http://www.localetrends.com/st/va_virginia_unemployment.php?MAP_TYPE=curr_ue

    versus Virginia Unemployment Levels 1 year ago
    http://www.localetrends.com/st/va_virginia_unemployment.php?MAP_TYPE=m12_ue

  6. re: spending by percentages

    ah.. this gets us back to what those percentages ought to be in the first place.

    how would that work? Just look at historic percentages?

  7. re: heat map –

    excellent map… thank you

    I did my own for foreclosures and school scores.

    this could be a dangerous tool for wonkologists.

  8. Anonymous Avatar

    http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=1&vote=00325 I'd note that Virginia's two senators are casting some good, fiscally conservative votes. This was on the "doc fix," which Harry Reid tried to cram through without a funding source. And within the last couple of weeks, both Webb and Warner voted against the Murtha airport subsidy.

  9. what would be a plain English description of the bill referenced?

    Since Medicare Part D was passed without Paygo – are we now back to Paygo or not?

    anyone know?

  10. Anonymous Avatar

    "how would that work? Just look at historic percentages?"

    That would be a start.

    Then you put the budget ont he back of the tax form and ask peoeple what THEY think it ought to be.

    Average that out and it probably won't be too far from what the budget ought to be, although some people will be afraid that their favorite program wil be shown to have less support than imagined.

    Take that average and put a +/- 15% bracket around it. Legislators can make any budget they like within those brakets. Outside that bracket they needd a supermajority vote, like 60%.

    There would be a lot less lobbying (of politicians, more direct lobbying to the people), and a lot less useless and predirected polls claiming to represent the public's opinion.

    Within the actal programs that spend the money, government would still have an obligation to protect people's property equally and defend minorities against unfair pressure from the spending desires of the majority.

    RH

  11. Anonymous Avatar

    If their budget adds up to 120%, then they are asking for a tax increase.

    RH

  12. how many people do you know that understand how much money the Department of Corrections needs if they are not going to be cut below what they need to not have to release prisoners?

    how many categories would you have on the back?

    5, 10, 100?

    what would you do if their answers totaled up to 120%

    Bonus Question: Do I hear you advocating for Mob Rule for the Budget?

    If so, how serious should I take your other ideas?

  13. re: "voting" for the budget

    I suppose it's also understood that only about 40% of the Va budget comes from the Income Tax.

    Ray' suggestion though – does point up something about the way that Virginia does business.

    The Va Supreme Court ruled illegal the 3202 law that gave unelected officials taxing authority but the Va Constitution empowers our elected officials to decide what level of funding and thus taxing will be determined.

    At times though – we do have State Referenda on issues but to be perfectly honest – I never understood the criteria for deciding if citizens would be allowed to vote rather than having the issue decided by the GA.

    Does anyone here know what that criteria is?

    For instance, why would we want McDonnell or Deeds to decide whether or not Va will support (or not) a gas tax increase?

    Why not put that question to the voters to begin with?

  14. Anonymous Avatar

    "what would you do if their answers totaled up to 120%

    Bonus Question: Do I hear you advocating for Mob Rule for the Budget?"

    All explained above:

    Mob rule for the budget is advisory: the legislators still have to vote on the budget, and they would be allowed some defined discretion in altering the people's suggested budget, something like +/- 10 or 15%. Beyond that discretionary leeway legislators could still change the budget, but now they would a) bring the spotlight on themselves, and b) need a supermajority vote to do it.

    You might still call this mob rule for the budget, but it only applies to how much we suggest be spent on various categories. It is still up to the government to see to it that the money is not spent in ways that discriminate against certain groups.

    If the mob wants to spend their money in a certain way, that's OK with me. But if the mob wants to steal, goods, services, or other kinds of property without paying for it, well, that is a different thing entirely. If the mob wants to go out and buy more flood plain protection fine, but if they want to fund a program that increases flood plain protection by 100% without compensation to propert yowners, then that is not fine.

    I would expect that level of detail to be below the level voted on by the people anyway.

    I'd think the budget presented to the people would be simplified to mabe twenty major categories. For example, within the general category of public safety, legislaotrs could allocate between prisons, police, and state aviation agency as they see fit.

    I agree with your contention that people are clueless about what the budget should be. If they get it wrong they will learn the error of their ways quickly enough. Anyway, what makes you think the legislators are any less clueless? At least the individuals don't have the party or special interests strongarming them, even though they may have a party preference.

    Rather than mob rule, think of it as a giant Delphi task.

    RH

  15. Anonymous Avatar

    I think the criteria for referenda is when the subject is too hot for legislators to touch.

    RH

  16. well now.. you have voted for mob rule – with provisos

    in other words, your own version of the Constitution rather than the one we have…

    now what happens if you get outvoted on your version – you know..like the rest of us decide we prefer the Constitution that is already in place?

    is that an example of the kind of Mob Rule you're opposed to?

    isn't this why we have elections?

    what process would you use to "direct" the politicians to do something other than what they do right now?

    methinks you have stepped into it Ray.. now it's time to try to get it off your shoe.

  17. Anonymous Avatar

    Deeds Vs McDonnell

    Deeds is the one suggesting we sell off the state liquor stores. Isn't this an argument for smaller government that you would expect to hear from the Republican side?

    RH

  18. Anonymous Avatar

    well now.. you have voted for mob rule – with provisos

    I never said we don't have a representative democracy, or that we do not have the right to voice our opinions to our legislators.

    But I disagree with your contention that the majority can unilaterally decide to, for example, increase setbacks, in such a way that it does not materially affect the majority but does the minority.

    We don't have any direct political process that supports that, and if we do it should be dismantled. Absent that we have to rely on our representatives who are obligated to represent everyone equally, not just those who voted for him.

    Sadly, we have got to a situation where they don't see it that way, and neither do people like you. You prefer to think that you run the show because you have a majority of the election votes. Our officials are all to eager to prostitute themselves and our government by chasing the money and votes they need to keep their job.

    RH

  19. Anonymous Avatar

    "in other words, your own version of the Constitution rather than the one we have…"

    Where the hell did you get THAT from?

    All I suggest is that we have to send out the tax forms anyway. It will cost us almost nothing to get some feedback on how their money is spent when the returns come back.

    We can choose to ignore that information if we want, just as we can choose to ignore the results of a cost benefit analysis, if we want. But all that means is that we have chosen to make a decision based on ignorance rather than knowledge.

    I figure the odds of making a good decision are better with the knowledge than without. As long as the costs of getting the knowledge are less than the cost of a bad decision, you would be a fool to act without the knowledge.

    None of that requires a change in the constitution, state or federal.

    RH

  20. Anonymous Avatar

    "methinks you have stepped into it Ray.. now it's time to try to get it off your shoe."

    I don't see any disconnect here, and nothing to defend.

    We are free to give guidance to our representatives, singly or as secial interest groups, and except for the money involved our representatives are free to ignore our advice.

    Most individuals never give any advice because ether they are more or less satisfied as things are, or because they see that they have no real voice.

    Plenty of pollsters go out and ask the people for advice and opinions, and they spin that information and feed it to government to suit their needs.

    You can voluntarily go to the public hearings, if you have no real life of your own. And that is supposed to be public participation.

    But you tell me, when was the last time any government agency went out with a dedicated attempt to find out what people really want? And I mean everybody, not just those politically inclined that show up at the polls.

    WalMart doesn't work that way. They know exactly what you want to buy, and where to put it in the store. And it is all based on your observed preferences, voting with your wallet.

    But even WalMart won't let a mob steal from some minorities grocery cart AFTER HE HAS ALREADY PAID.

    RH

  21. Anonymous Avatar

    Oops, posted thi in the wrong thread…..

    I see three situations.

    100 people each chip in $10 for lunch and the majority decides what to order.

    1) They order vegetarian.

    The meat eaters might be disappointed, but they still get a fair sahre of what was bought. They might even complain that, in their value system, they got cheated because they don't value the vegetarian diet as highly.

    But, as youpoint out, they don;t get to set the price: that was done by the restaurant, in a competitive environment. The meat eaters don't have a leg to stand on, and no one stole from them.

    The majority order pork barbecue, knowing that a third of the group is muslim. The muslims get nothing and the majority gets stuff they didn't pay for.

    3) Having collected the $10 from everyone the majority changes the rules and gives back the money to everyone who votes with them. They buy what they want with the minorities money. If they order barbecue, they get fed for nothing and the muslims get less than nothing.

    The difference is obvious to me, but somehow we have long since passed over to the point where case three is accepted as legitimate majority rule.

    To me, it is just stealing.

    And there is an obvious problem with situation 3. With fewer people paying there won't be enough to go around. That's the problem with HOT lanes or user fees designed to target "somebody else".

    RH

    10/22/09 12:48 PM

  22. Anonymous Avatar

    "Hundreds of millions of dollars may have been paid to people who fraudulently or erroneously took advantage of a lucrative tax credit for first-time home buyers, an IRS watchdog told a House panel Thursday. "

    You think we might have depended on the same lenders and brokers who brought us round one of mortgage frauds?

    RH

  23. Anonymous Avatar

    Whew, at first i mis-read the title.

    At first I thought it said "The Palin Has Only Begun"

  24. Anonymous Avatar

    A proposal to increase rates on the Dulles Toll Road cleared another hurdle Wednesday.

    Two committees of the Metropolitan Washington Airports Authority board met jointly and voted unanimously to recommend the plan, sending it to the full board for a vote Nov. 4.

    The plan would boost tolls by 2012 from 75 cents to $1.50 at the main plaza and from 50 to 75 cents at ramps. The airports authority is using toll revenue to help finance the $5 billion project to extend Metrorail service to Dulles International Airport.

    The committee vote came days after the board released a summary of 221 public comments in which respondents expressed disapproval of the increase by about 3 to 1. At the meeting, board members thanked the public for their comments, but they showed no sign of wavering.

    WAPO

    ——————————-

    So much for mob rule.

    RH

  25. well they could vote with their wallets… no?

  26. Anonymous Avatar

    Only if there is an alternative.

    Boycott signs are already going up.

    RH

  27. Anonymous Avatar

    Maybe they should organize a bike day. If 2 out of four people on the toll road show up on bicycles, that should send a message.

    RH

  28. Anonymous Avatar

    "Leaders in Fairfax County are upset that money collected from the Dulles Toll Road has been earmarked to help fund the widening of Route 606 in eastern Loudoun.

    Should Dulles Toll Road money be used to widen Route 606?
    The Fairfax County Board of Supervisors unanimously decided at a meeting in mid-September to send a letter to airport officials protesting the use of toll money on projects other than building rail to Dulles or on the maintenance of the toll road itself.

    “We need to find another pot of money” for projects that fall outside funding transit or improving the toll road, said Fairfax County Supervisor Cathy Hudgins (D-Hunter Mill), whose district encompasses much of the toll road"

    —————————-
    Regional politics at its best.

    What does "another pot of money" sound like to you?

    RH

  29. Anonymous Avatar

    "Most local residents are unaware that Dulles Rail total costs include not only the estimated $5.3 BILLION CAPITAL COST but $18 BILLION or more in FINANCING COSTS to be paid by DTR users. Additionally, $8 BILLION or more in OPERATING COST DEFICITS could result from Dulles Rail operations during the next 40 years."

    Restonian

    ——————————-

    Yes, the pain has only begun.

    RH

  30. Anonymous Avatar

    Fairfax County supervisors protest use of tolls collected inside Fairfax County to fund Loudoun Parkway–in Loudoun County.

    Connection:

    “This improvement is in Loudoun County and I don’t think revenue collected in Fairfax should go across the county line,” said Hunter Mill supervisor Cathy Hudgins

    ……

    Springfield Supervisor Patrick Herrity (R) pointed out that many Loudoun County residents pay to use the Dulles Toll Road, though he was not in favor of the toll revenue being used for the Route 606 expansion.

    ……..

    Fairfax County is gladly accepting $900 million dollars collected from the United States taxpayer to build the Tysons metrorail stations and line.

    $900 million collected mostly outside the county.

    Dulles Home Guy

    —————————

    You gotta love this kind of logic.

    RH

  31. Anonymous Avatar

    A class action lawsuit has been filed against the Massachusetts Turnpike Authority over its denial of transponder discounts to E-ZPass drivers that it grants to users of its own transponder branded FAST LANE. The suit filed in US District Court in White Plains NY on behalf of New York motorists visiting Massachusetts charges the state Turnpike with overcharging and discrimination against a class of interstate drivers in violation of the three clauses of the US Constitution and one US law:………..

    Pawa's suit also complains that FAST LANE signage says "E-ZPass Accepted" but fails to say warn that discounts are denied: "There is no warning posted…" The law suit calls the sign E-ZPass Accepted "fraudulent concealment" and "deception" because there is no warning that E-ZPass customers don't get the same tolls as FAST LANE customers.

    tollroadnews.com

    —————————

    See, tollroads will fix all our problems.

    RH

  32. Anonymous Avatar

    BOSTON — The Massachusetts Turnpike Authority is dead, leaving $2.2 billion in Big Dig debt and immeasurable MetroWest frustration in its wake.

    With an enormous transportation overhaul pending, the board met in Boston for the last time yesterday morning.

    Board member Mary Z. Connaughton read a 12-stanza poem titled "Ode to the Pilgrim Hat."

    And then, 57 years after the authority was established, it ended.

    ——————————

    See what we can look forward to?

    RH

  33. Anonymous Avatar

    "They are demanding that the state of Sonora reduce the toll for the highway, which begins south of San Luis Rio Colorado, Son., and goes south to El Golfo then on the Rocky Point (Puerto Penasco). Supporters of the lower toll are apparently ready to blockade the road in a protest if necessary.

    We would be more understanding of this dispute if the only option was to pay the toll, but that is not the case.

    Drivers have a choice. They can pay to use the new road which provides a much improved roadway and cuts about a half hour off the trip, or they can use the existing public highway that takes longer and is less improved."

    ————————

    Like I said, if there is an alternative.

    RH

  34. If the idea is that roads are "paid for" then I would direct folks to the current VDOT budget of several BILLION dollars which contains virtually no money for new projects.

    In other words, we are paying about 3 billion dollars worth of taxes in Va to maintain and operate the roads.

    If you actually want to build more new roads – you'll have to pay more.

    This explains why more than a few toll roads continue to have tolls past the time the bonds are paid back.

    but no shortage of folks who still believe that the tolls should come off when the road "is paid for".

    using toll roads as revenue sources for other transportation projects is a relatively new wrinkle though.

    Both Florida and Florida and now North Carolina operate toll roads that will be subsidized from other – more lucrative toll roads.

    The ICC in MD will need subsidies from other MD toll roads to be able to pay back it's financing.

    The planned HOT lanes operated by Transurban were planned to generate funds for VRE and Metro as well as other transit.

    and no other than Mr. 'no mo tax' McDonnell is in favor of tolling I-95 – an existing road to generate transportation money for Virginia.

    Not sure about Deeds…

    but the title of this threat; "The pain has only begun" is an apt description of the transportation funding situation in Va.

    It will be virtually impossible save some miracle change in GA and Gov attitudes for Va to gain transportation funding in the next year or two.

    and that probably means more toll roads ..though it appears that driving is down and transit usage up.

    just looking at the latest monthly revenues for VDOT:

    motor fuel taxes are down 6% e even though gasoline is a 1.50 cheaper than a year or so ago.

    and fuel taxes are only 25% of the funding for VDOT –

    the 1/2% sales tax is also down 6% and the total maintenance fund is down 24%.

    http://www.dmv.virginia.gov/webdoc/pdf/tracking_sep09.pdf

  35. re: "if they have an alternative".

    well they always have an alternative as to how far they want to live from where they work from the get go.

    I think we're going to find out just how many "free" roads commuters are actually "entitled" to and I'm guessing.. not as much as they thought.

  36. Anonymous Avatar

    Keep in mind that paying higher tolls on the DTR is just for the Tysons landowners. Dulles Rail has nothing to do with traffic congestion (except to trigger more of it due to increased density in Tysons) or getting to and from Dulles Airport (if they wanted to make it easy to take rail to the Airport, they would not have routed it through Tysons).

    However, on a happier note, Fairfax County staff has rejected the idea that an urban Tysons Corner only needs one athletic field. When the area is fully built out, there will need to be 20 athletic fields. Some will be built on top of parking garages, but they will be there. Imagine that planning for growth that benefits everyone.

    TMT

  37. " if they wanted to make it easy to take rail to the Airport, they would not have routed it through Tysons"

    yes. this typifies many of the major transportation projects in Virginia.

    but according to Ray.. if you don't let those developers develop – you're stealing their property rights.

  38. Anonymous Avatar

    "..well they always have an alternative as to how far they want to live from where they work from the get go."

    It isn't an alternative if it isn't an attractive one, is it?

    You can move closer, pay twice as much for half the space, in a place that isn't as safe, and still spend just as much time in travel, for th emost part you still have to support the car and now it is parked on the street.

    Some alternative.

    RH

  39. Anonymous Avatar

    "…if you don't let those developers develop – you're stealing their property rights."

    I never said that. You don't listen very well.

    RH

  40. Anonymous Avatar

    I said from the get go that rail should go direct to the airport, with a loop spur at Tysons.

    Might cost a couple billion more, though.

    RH

  41. Anonymous Avatar

    "Dulles Rail has nothing to do with traffic congestion (except to trigger more of it due to increased density …"

    How does that make Dulles rail any different from the rest of Metro?

    We have had a thirty year experiment that is a patent failure, and we refuse to recognize it. Metro is another Washington Monument or Museum of Transportation History.

    It does one thing very well: it runs SRO sardine cans in and out of the city at rush hour.

    At an absolutely fantastic cost, that is about to get a lot worse.

    RH

    RH

  42. Anonymous Avatar

    "Some will be built on top of parking garages,…"

    Great idea. CO is lighter than air.

    RH

  43. Anonymous Avatar

    "If the idea is that roads are "paid for" then I would direct folks to the current VDOT budget of several BILLION dollars which contains virtually no money for new projects."

    OK, so we can come up with projects faster than we can come up with money.

    Especially when the gas tax has gone DOWN every year since 1986, relative to the cost or value of auto transportation.

    It hasn't got any money because we won't pay it, or the no taxers won't let us pay it. We are paying anway, in waste, but that is an external cost, so it doesn't count.

    Every environmentalist worth his salt ought to be writing to their representatives complaining about this waste, rather than claiming that "congestion is our friend".

    RH

  44. Anonymous Avatar

    "If you actually want to build more new roads – you'll have to pay more."

    Well, Duh.

    WE don't need more roads, and we can't put them where we do need them. We have got plenty of underused roads. What we need is more balance. If we can tell people where they can and cannot build homes, then we can tellthem where they can and cannot put more jobs.

    You are raising red herrings aginst solving the wrong problem.

    RH

  45. Anonymous Avatar

    "I think we're going to find out just how many "free" roads commuters are actually "entitled" to and I'm guessing.. not as much as they thought."

    Great.

    How many free roads are everyone else entitled to? How much are the commuters going to pay for those, in addition to paying for their own.

    How much are they going to pay for the ones they don't use, in addition to the ones they do use?

    Oh, never mind, I know the answer. They will pay as much as the majority of state senators make them pay.

    RH

  46. Anonymous Avatar

    "motor fuel taxes are down 6% e even though gasoline is a 1.50 cheaper than a year or so ago."

    That's because there is NO RELATION between motor fule taxes and the price of fuel.

    If there was, motor fule taxes would be down 30% from a year ago, but a year ago we would have had a windfall of taxes.

    And, even though they would be down now, compared to a year ago, they would be UP 400% from 1986.

    Geez, at least make an argument that makes some kind of sense.

    RH

  47. Anonymous Avatar

    "and that probably means more toll roads .."… wont solve the problem. We have now let the problem get bigger than what toll roads can solve.

    RH

  48. Anonymous Avatar

    "The planned HOT lanes operated by Transurban were planned to generate funds for VRE and Metro as well as other transit."

    Where is that written in the contract? That is an entirely new idea as far as I know. Transurban builds the HOT lanes and keeps the profit. Now you are telling me we are going to pay them AND pay tolls on top of that?

    It is not user fees after all then, is it? That "user fee" nonsense is nothing but a damn lie: it is a cover for new road taxes directed at a minority of road users.

    RH

  49. not only in the Contract – but clearly shown in the hearings and public meetings:

    New infrastructure, funding for transit
    – $195 million concession payment
    – Regional free-flowing pathway for buses
    – Bus Rapid Transit stations, new buses and bus routes
    – 6,750 new Park & Ride spaces
    – Transportation Demand Management programs
    – VRE station improvements

    and they have support for it:

    "More than 60 percent of travelers support HOT lanes on
    I-95/I-395 if some of the revenue goes to support public
    transportation in the corridor"

    http://www.vamegaprojects.com/downloads/pdf/95_395_HOT_Lanes_12_3_08.pdf

  50. " That's because there is NO RELATION between motor fule taxes and the price of fuel."

    well we know that people buy less gasoline when it's $4 bucks a gallon – don't we?

    and we know that when gas went to $4 a gallon, people started buying more fuel efficient cars.

    and we know now that people are driving less and buying less gasoline.

    but one of the things that most folks don't realize is that only about 25% of VDOT's budget comes from State gasoline taxes and that one penny statewide will only generate about 50 million dollars – to be split up by about 130 cities and counties.

    If you look at the numbers – that comes out to about 385K per locality.

    10 cents would deliver about 4 million per locality.

    Deeds has supported a quarter – and that would deliver about 10 million per locality.

    see.. even at a quarter – the numbers don't "work" because one mile of median-divided 4 lane will eat 10 million easily.

    So the Transportation issue for Deeds and McDonnell – whoever gets in is not going to be solved with a gas tax increase even if you could get RoVa to sign off on a 25 cent tax.

    In other words – the State is not likely to generate substantial new money for the urban areas and they will have to address the issues themselves.

    They can do that by:

    1. – getting the GA to let them raise regional taxes

    2. – raising property taxes

    3. – building toll roads

    my calculation is that number 3. is going to be a player and the good thing about it is that a proposed toll road has to be analyzed for how much toll could be charged and still attract willing customers and my view is that – that is a much better way to determine true demand.

    if a road is REALLY needed, people will be willing to pay a toll.

    if on the other hand, it is just a convenience or it's a inducement for development then we're going to be able to recognize that from the analyses.

    The good part about this is that we're likely to see the end of new roads for developers.

    The Western Transportation Bypass will happen under only one condition – a toll road and I'm betting that the developer folks are not going to be nearly as happy with that idea as they would be with a "free" road.

    The current Transportation "crisis" in Virginia could be a good thing – if it puts the developer-friendly CTB out of business.

  51. " Every environmentalist worth his salt ought to be writing to their representatives complaining about this waste, rather than claiming that "congestion is our friend"

    If you wanted to compare the pollution of cars in congested and non-congested conditions – then you'd also have to acknowledge that MORE cars would pass a given point in free-flow conditions.

    so the cars would be operating more efficiently and polluting less but because the conditions are free-flowing – more cars pass by the same point – each one adding less pollution but because there are more cars – more total pollution.

    this is what the EPA air emissions model shows an this is why in non-attainment (congested) areas, they'll allow HOV/HOT but not new roads that add capacity which adds more cars.

    as more an more cars become hybrids, congestion will actually result in less pollution as these cars turn themselves off.

  52. I alluded to this before but here are some specifics:

    VDOT Revenues Fiscal 2009/2010 estimates (thousands)

    Motor Fuel Taxes $714,800

    State Sales and Use Tax $478,400 (this is the 1/2%)

    Fed Gas Tax money
    $812,448

    Total Revenues: $3,246,246

    so the 17 cent gas tax in Va is about 1/4 of it's budget.

    increasing gas taxes by a quarter or less will not have a substantial material impact on these revenues.

    http://www.dmv.virginia.gov/webdoc/pdf/tracking_sep09.pdf

    how would Deeds or McDonnell play with these numbers?

  53. Anonymous Avatar

    "If you wanted to compare the pollution of cars in congested and non-congested conditions – then you'd also have to acknowledge that MORE cars would pass a given point in free-flow conditions."

    Only up to a point. Max throughput occurs when the traffic is traveling only around 25 mph, and 4 car lengths apart. If you ever actually see those conditions, let me know.

    Anyway, pollution is only a small percentage of the waste I was talking about.

    RH

  54. Anonymous Avatar

    "….so the cars would be operating more efficiently and polluting less but because the conditions are free-flowing – more cars pass by the same point – each one adding less pollution but because there are more cars – more total pollution."

    Wrong.

    If you have free flowing traffic at speeds higher than about 35 mph then you get LESS through put and less total cars. Cars are (inexplicably) optimized for travel at around 50-55 mph, which is where their lowest pollution per mile occurs.

    Therefore, despite your claim to the contrary free flowing traffic would result in lower throughput and also lower pollution, unless the traffic is really moving fast.

    But, the lower throughput also means a lower IRR for the cost of the roadway.

    If you are going to argue this way, at least et your physics correct.

    RH

  55. Anonymous Avatar

    "this is what the EPA air emissions model shows an "

    I don't believe it. Reference the model. If that is what the model says, then clearly it is outright wrong. The only way that can work is if they are comparing near gridlock to "free flowing" speeds of 25-35. In that range your assumptions might be correct.

    RH

  56. well you specifically mentioned environmentalists – which do know about the actual pollution levels that result from congestion and do their advocacies with regard to those facts

    The other "waste" you allude to as it impacts individuals is – individual in nature.

    Some people actually have little choice when they must do so during rush hour congestion.

    Others do.

    But everyone – regardless of their true need – pays the same price.

    The cost to the guy going to visit his girlfriend is different from the cost of someone who needs to be at a meeting where one million dollars is at stake.

    This is why I support HOT Lanes so that each person can make their own determination of how valuable time is to them – specifically.

    I would prefer that – a market-based solution to one where we try to figure out who should be driving at rush hour and who should not – as a govt policy.

  57. Anonymous Avatar

    " as more an more cars become hybrids, congestion will actually result in less pollution as these cars turn themselves off."

    They don't turn off very often in free flowing conditions. It will be decades before the fleet is converted substantially to hybrids, anyway. What is your point?

    Doesn't matter what kind of cars we drive, if they are stuckl in traffic we are enduring a huge waste of resources.

    Adding to that the problem of building ANYTHING in a non-attainment area (homes prodece 1/3 of our pollution), all you are saying to me is that a) we can't build more roads in the most cogested areas, b) if we were allowed to do it we can't afford it, c) if we could afford it we would have more pollution and therfore the current solution is d) build new roads anyway (by taking awya the safety lanes) and charge the people who drive on them not only for the roads they use but for the additional costs of other transit they don't use, and we are going to justify this as a "user fee" because the users of public facilities are the ones that should pay for them.

    And we are going to do this despite the fact that we already have plenty of underused roads in other places, because although we can tell people where they cannot live we are unable to tell businesses where they cannot live.

    Well, gee, that makes perfect sense.

    NOT.

    We are using the wrong tools to "solve" the wrong problem. What we are about to do won't work, (for the reasons TMT has pointed out).

    It will be a huge waste of energy and resources and every environmentalist should be opposed.

    RH

    RH

  58. " They don't turn off very often in free flowing conditions. It will be decades before the fleet is converted substantially to hybrids, anyway. What is your point? "

    Hybrids pollute much less than non-hybrids in congested conditions.

  59. you can wiggle every which way from Sunday – but if you are a designated as a non-attainment area, you cannot add road capacity if it adds to the pollution levels.

    Them's the rules ….

    you can.. as you typically do .. argue against them but a few thousand folks (including those whose health is impacted) disagree with you so you lose – as usual – also.

    your calculations always seem to assume that a life is worth X dollars but you don't count the amount of money individuals must spend in dealing with health problems brought on by dirty air.

    One could do s study to "prove" that congestion is more costly than the health care costs but so far, I've not seen one…

    until then – the EPA has done their own studies and until someone refutes them with a credible study.. I suspect he rules stay and roads that add capacity are put into the EPA model to see if they add pollution and if they do – they are not allowed.

    Roads that relieve congestion without adding to overall pollution levels are allowed.

    per the model they use..

    you can find out more about it here:

    http://www.mwcog.org/transportation/activities/quality/models.asp

    but I kinda got the impression that you were already an "environmentalist" schooled in these things…

  60. Anonymous Avatar

    obeduThe other "waste" you allude to as it impacts individuals is – individual in nature.

    So is all waste. What is your point, that it is my choice as to whether or not I recycle?

    The whole point of the environmentalist philosophy is that all these things amount to waste: if you waste something, then that affects me, which you have NO RIGHT to do.

    My position is only slightly different and it is that one has NO RIGHT to cause damage to another that EXCEED the damages he incurs. I have no right to demand that you pay $100 so that I can avoid an expense of $1, and those rights are reciprocal.

    But here we have a situation of massive waste, (only partr of which is DIRECT pollution) which is estimated to cost each person in the DC area $1069, as I recall. That is a real cost that affects all of us. We can NEVER eliminate all of that cost, but we ought to be willing to spend $1 for each $1 that it CAN be reduced.

    So the question, as always, reduces tho this: What alternative us of total funds (public and private, since it is all our money) produces a situation that provides the maximum net public benefit?

    We are not trying to answer that question.

    Instead, all sides have staked out a turf, which they will fight to protect, regardless of public consequences. This is a result of each thinking the other side has NO RIGHTS, instead of each thinking the other side has only reciprocal rights.

    The result is that we will hae the wrong answer for the wrong problem: instead of paying $1069 dollars for nothing we will be paying $2069 for $600 worth of benefits and we will be worse off than now.

    Every environmentalist worth his salt should be fighting that result, because it is a waste.

    Instead, we are going to wind up adding to the car pool lanes while heloing eliminate car pools, but keeping the lanes free flowing. By your argument, this is wrong because it will result in more pollution.

    The good news is that your argument is incorrect. If the HOT lanes work as advertised they will result in less pollution than what we have now. (Except if more cars elect to use the roadways because of this new benefit).

    The bad news is that we won;t have solvedthe basic problem and so 15 years down the road, we'll be right back where we are now, but with fewer choices.

    Eventually we will stumble on the right one, but we will have an awful lot of unnecessary waste before then.

    RH

  61. Anonymous Avatar

    " you can wiggle every which way from Sunday – but if you are a designated as a non-attainment area, you cannot add road capacity if it adds to the pollution levels."

    Then why are we doing it?

    And why do we advocate adding more houses and more business which also add to the non-attainment problem?

    You are arguing around in a circle, an the only conclusion you can reach after you go around a couple of times is that we need to be doing someing else if we want to get anywhere.

    RH

  62. Anonymous Avatar

    "your calculations always seem to assume that a life is worth X dollars but you don't count the amount of money individuals must spend in dealing with health problems brought on by dirty air."

    They are not my calculatons, the people eho actually do these things put prices on both life and morbidity.

    We can choose not to do that and ignore the calculations. But whether we do the calculations or not, whatever we do will affect life and morbidity and it will have a cost.

    We will have spent X amount for lives saved and Y amount for additional healthy days, we just won;t have any idea how much. As it is now, we only have a fuzzy idea, but that is better than nothing. We can do better if we work harder at it.

    We are back to the intangibles aregument again. some people will argue that you cannot put a price on your family. But there are only so many resources togo around. If you demand too muchof them to protect your famly, then some other public project doesn't get done that affects other families. By stting an infinite price on your family (so that your favorite project gets done) you set a lower price on other families, which you have no right to do. If you do that you are stealing from them.

    You are supporting a project that values each life at $X and each day of health at $y, while consigning to others only $x/3 and $y/2, or something.

    There is an excellent online debate on this subject at

    http://www.prospect.org/cs/articles?articleId=7696

    You are fighting the wrong battle. it isn't about transit, or development, or roadways or personla consumption, or density of development patterns.

    It is about how do we get the most bang for the collective buck (both public and private). How do you minimze total cost where

    TC = PC + EC + GC? and do oit equitably.

    Really, that is all there is to it. But we will never get there because we prefer to fight over turf, like gangland animals, intent only on stealing what we can get.

    RH

  63. " which is estimated to cost each person in the DC area $1069, as I recall."

    are you saying that the guy on the way to buy tires for his car is losing $1069 or is the lady on her way to a meeting that involves a million dollars out of $1069?

    this is a totally bogus number cooked up by the folks are think more roads paid for by everyone including those who don't use them at rush hour or even use them at all is "worth" it.

    It's not.

    If you are not a person who needs to use these expensive urban roads at rush hour then why should he pay?

    The folks who pay should be the ones who ostensibly are losing money from the congestion – not those that are not.

    that's why congestion tolls are fair and equitable.

    Each person gets to decide whether their time is worth more than the toll charges and no one who is not using the road has to pay for it.

    The view that everyone in Va should pay for the roads in NoVa and Hampton Roads will not fly.

    In fact, this idea won't fly in any state these days.

    The people who want/need the congestion relief are the ones who should pay.

    That way the responsibility falls directly on the person who says they have the 'needs'.

    and that includes the cost of pollution – no matter how efficient the car is – if you add to overall pollution that harms the health of others – then you are subject to restrictions and higher costs.

    you talk a lot about property rights but you turn right around and advocate taking property (money and health)from others to benefit yourself with less congestion.

    Those other folks get to decide if you are going to raise their gas taxes to give to you and more and more of them are saying NOPE.

    If you are driving on a congested highway – you are causing the problem and you should be the one to pay for it either in lost time or higher taxes or both.,

    Which candidate for Gov is going to advocate charging others to pay for NoVa congestion?

  64. " They are not my calculatons, the people eho actually do these things put prices on both life and morbidity"

    total BS

    EPA does calculations that do not support you but you choose to not believe the EPA and instead something else that you won't provide the actual source of.

    The TTI studies do not take into account the health impacts.

    so how about a reference?

  65. Anonymous Avatar

    "…you can.. as you typically do .. argue against them "

    Where do you get that idea? I am in favor of what they do: they use cost benefit and they endorse the idiea that no person should bera an undue cost for environmental services or regulation.

    I just think we need to do a much better job of it. YOU are the one who is opposed.

    The environmental movement as a whole is terrified of cost benefit analysis because it was twisted by republican administrations and used against them.

    They are terrified because they might have to agree on the cost of intangibles, and they see that as a defeat, if they are used to claiming the intangible value as infinite.

    Wht they, and you, don't seem to ealize is that they can be better off, AND have a better environment, as soon as their high horse stops crapping everywhere they ride.

    What they want done has value, and it also has costs. Lets recognize that and try to figure out how to get the most value for whatever cost we can afford.

    With that greater value, we can then afford to spend more the next cycle, and have a better environment still.

    And there is no need to steal from ANYONE along the way.

    RH

  66. Anonymous Avatar

    "EPA does calculations that do not support you but you choose to not believe the EPA and instead something else that you won't provide the actual source of."

    EPA does calculate both morbidity and mortality to use in their cost benefit evaluations.

    I'm in favor of that, but I think we need to do a much better job of it.

    For example, there is an obvious problem when EPA justifies a egulation using $6.5 million as the value of statistical life, but OSHA uses a value of $7.5 million, and Serra club thinks it is north of $9.5 million.

    I haven't ever said anything about what I think the price should be, only that we need to agree on some value, or else the rest of our arguments in favor of some policy or another are worthless.

    Go read the online debate, and see what I mean.

    RH

  67. Anonymous Avatar

    The TTI studies do not take into account the health impacts.

    Well, that is a good example of how we can do better, then, isn;t it?

    RH

  68. Anonymous Avatar

    "Which candidate for Gov is going to advocate charging others to pay for NoVa congestion?"

    Whichever candidate does that is an idiot. He is asking the wrong question and he will get the wrong answer.

    He is governor. He should ask one question.

    How do we best spend what state money we have for the betterment of the entire state, without one person or area cheating another?

    That might mean we don't spend a dime or transportation or transit, for all I know. All I know is that no one is asking that question or seriously looking for that answer.

    RH

  69. re: cost-benefits

    From your own source you provided"

    " Almost no one attaches a price to the things they care most about. How much is your family worth to you? Or your religion? Or your health? By arguing that good decision-making requires monetary equivalents for environmental goals, the advocates of cost-benefit analysis degrade priceless values to the level of cheeseburgers and fries. Government activities that the administration wants to pursue are never subject to this test; when is the last time that a cost-benefit analysis was required before sending troops overseas, or, for that matter, undoing an important environmental program?"

    The EPA does cost-benefit analysis and that is what led to the non-attainment rule.

    from your reference:

    ".. EPA's most recent cost-benefit analysis of the Clean Air Act Amendments found substantial net benefits each year from these protections. The Agency's central estimate for the excess of benefits over costs was 52 billion dollars for 2000 (in 1990 dollars)."

    now what was the "cost" of congestion again?

  70. Anonymous Avatar

    "and that includes the cost of pollution – no matter how efficient the car is – if you add to overall pollution that harms the health of others – then you are subject to restrictions and higher costs."

    But you cannot be subject to infinitely higher costs and infinitely higher regulation to achieve infinitely lower levels of pollution.

    Even if it is possible to do, there is no reason to spend more on reducing pollution than the damages pollution causes. That damage will be less and less as youspend more and more to overcome it. At some point, those values cross.

    It is impossible to do that and then claim you are somehow "better off".

    You are going to claim that we need a huge safety margin, because our previous history is so bad. But you are going to pay for that safety margin and it will buy you some lives and some morbidity.

    There is an ENORMOUSLY high probability, almost a certainty, that you could have spent taht safety margin money better someplace else. But you won't even agree to look, because your starting point is that what you are protecting has infinite value and those who own it have infinite rights and those that might damage it have no value and no rights.

    You just keep driving around that logical roundabout and never get anywhere, while the exit is clearly marked.

    RH

    RH

  71. I'm not opposed to cost-benefit approaches.

    That is the exact approach that the EPA has used to determine air quality standards.

    From your own reference:

    " EPA's most recent cost-benefit analysis of the Clean Air Act Amendments found substantial net benefits each year from these protections. The Agency's central estimate for the excess of benefits over costs was 52 billion dollars for 2000 (in 1990 dollars)."

    I support this and this is "hard" costs – not the intangibles.

    The EPA has been challenged numerous times in court over their non-attainment and the score is EPA a bunch to Industry ZIP

    In fact, when Bush was in office, he suppressed the EPA cost-benefits because Industry did not want to see them because they would cause even more restrictions on them.

    your concept of "stealing" is not accepted by anyone public or private doing legitimate work in the area of cost-benefit studies as far as I know.

    you keep talking about the "science" but then you cook up these totally nutty property rights ideas that don't rely on science at all.. unless they can cherry pick something out of context that often is in opposition to the conclusions of the report.

    This idea of cost-benefit has been going on for about as long as the Clean Air and Clean Water Act came into being an industry started to demand them

    and the govt has done them – and they have justified their approach as virtually all the court decisions have come down on their side.

  72. Anonymous Avatar

    ".. EPA's most recent cost-benefit analysis of the Clean Air Act Amendments found substantial net benefits each year from these protections. The Agency's central estimate for the excess of benefits over costs was 52 billion dollars for 2000 (in 1990 dollars)."

    If that is the case, then clearly we are not spending enough. We should be spending until the benefits equal the costs.

    I don't hear anyone suggesting we raise taxes another 52 billion so we can get even more benefit, yet I hear plenty of people saying the costs of pollution are too high.

    How about if we take some of those benefits and use them to compensate those who bear the costs unfairly?

    I know has cost benefit analyses. If they are so good, then let's put all their asumptions for costs and all their assumptions for benefits and put them out there.

    Let's put them in a catalog and see to it that the same assumptions are used for all cost benefit analyses. And let's make sure that the assumptions ae upgraded as we get new information over time.

    I know haw that system works now, and I know how bad it is. We can do a lot better and get even more benefits, but it is going to cost money.

    That money has to come from somewhere, and EPA has regulations that say the costs have to be boren equally.

    RH

  73. the differences in the valuation of the estimated cost of a human life won't change the vast majority of the calculations in any substantial way.

    You can bet if they did – that industry would be arguing over using improper values and they'd come with ample ammunition to prove their point – and they have – and after all is said and done – they lose.

    When the Govt says that the cost is X and the court AGREE Ray.. we AGREE.

    You can still disagree as well as others but it's irrelevant at that point.

    You have options available to you.

    More science done by legitimate and credible sources can cause changes by those shouting that it is "not right" …well.. they just get to shout.

    the rest of us ignore them.

    the cost/benefit stuff is old – as old as the clean water/air acts.

    there is a LOT of settled law on these issues ….

  74. Anonymous Avatar

    "The EPA has been challenged numerous times in court over their non-attainment and the score is EPA a bunch to Industry ZIP"

    It is elementary management to know that EPA should not be doing their own cost estimates.

    The fact that you characterize this as EPA against industry indicates exactly the problem I have been pointing out. No one has the right to unfair beneifts or the responsibility for undue burdens.

    And it isn't industry zip, either.

    RH

  75. Anonymous Avatar

    "the differences in the valuation of the estimated cost of a human life won't change the vast majority of the calculations in any substantial way."

    Well then, whats the problem with picking one?

    And why did Sierra club sue when EPA changed the calculation?

    RH

  76. Anonymous Avatar

    When the Govt says that the cost is X and the court AGREE Ray.. we AGREE.

    But if th ecosts and benefits are what you say they are, we are not spending anywhere near enough.

    One reason we are not spending enough is that we don't pay people when we steal benefits from them.

    It is a flaw in how the costs are calculated. And yet you think it is OK just because it is SETTLED in court. We can't ever go back and revistit with new evidence? Once convicted always conicted, even if DNA proves otherwise?

    There are flaws in how both the costs and benefits are calculated. We need to do a better job, and do it continuously because the facts change as the economy changes.

    RH

  77. The EPA represents citizens/taxpayers like most govt does.

    there is no benevolent dictator Ray.

  78. The SC sued for the same reason that private industry sues.

    They disagree.

    The courts sort it out.

    That's the way our system works.

    there is no objective 3rd party benevolent dictator ..

    in our system – that function is done by the courts.

    deal with it.

  79. Anonymous Avatar

    Last post.

    I'll agree the benefits are 53 million more thanthe costs.

    SO WHAT?

    It is a wrong application of the procedure. It is meaningless unless compared to soemthing else. If there exists some other project that results in alesser cost per benefit, then we should take money out of clean air spending and spend it on the other project first.

    But we ignore that by simply stating the results as you have. It ignores the costs that others have borne wrongly, if we made a bad choice on clean air act.

    We might have saved a lot more lives, or some lives a lot more cheaply, with something a lot simpler, but which has no constituency. And why not? because of the ingoing assumptins you make about your rights vs the rights of others.

    RH

  80. Anonymous Avatar

    "The courts sort it out.

    That's the way our system works."

    It is also why our system fails. We can do a lot better.

    All you are saying is that the court is the benevolent dictator.

    What I'm saying is that with the right quality control we would be in court less often. People don;t go to court unless they think they have been wronged. As long aswe have people going to court, we have a process that needs immprovement.

    RH

  81. Anonymous Avatar

    One more time.

    Im not an advocate for or against EPA

    For or aginst clean air or clean water.

    For or against public transit.

    For or against, denser or less dense development.

    I'm ALSO not an advocate for paying more for clean air or clean water,or transit or development than it is worth.

    I think we make really, really lousy argments on both sides of all these issues, and as a result we are losing money and lives needlessly.

    I'm also not an advocate for making one group or another pay unfairly: that is a lose lose game because I know that it is Total Cost that counts. It does me no good to claim a savings of $2 million in external costs when it is actually costing me $1 million more atthe store and $1 million more in government surveillance.

    As long as that is NOT the case, then I'm on your side. But as long as you refuse to (continually) look and see if that is the case, then your position is suspicious to me. It is even more suspicious when you use arguments like those above, which I know to be wrong.

    RH

  82. Anonymous Avatar

    One more time.

    Im not an advocate for or against EPA

    For or aginst clean air or clean water.

    For or against public transit.

    For or against, denser or less dense development.

    I'm ALSO not an advocate for paying more for clean air or clean water,or transit or development than it is worth.

    I think we make really, really lousy argments on both sides of all these issues, and as a result we are losing money and lives needlessly.

    I'm also not an advocate for making one group or another pay unfairly: that is a lose lose game because I know that it is Total Cost that counts. It does me no good to claim a savings of $2 million in external costs when it is actually costing me $1 million more atthe store and $1 million more in government surveillance.

    As long as that is NOT the case, then I'm on your side. But as long as you refuse to (continually) look and see if that is the case, then your position is suspicious to me. It is even more suspicious when you use arguments like those above, which I know to be wrong.

    RH

  83. Anonymous Avatar

    "All of this must culminate in legislation that makes renewable energy the profitable kind of energy…"

    Barack Obama

    OK, how are we going to do that? We will do it by taxing other energy.

    How much should we tax them? Dunno, as much as it takes.

    Not a good answer.

    RH

  84. Gooze Views Avatar
    Gooze Views

    Jimbo,
    I know you love this tough medicine about debt stuff so here's a revised version of ther famous Carpenters' song from the 1970s.:

    We've only just begun to owe
    Red ink and deficits
    A kiss for luck and we're on our way.
    And yes, we've just begun

    Before the rising sun we borrow
    So many debts to choose
    We start our walking and learn to run
    And yes, we've just begun

    Sharing derivatives that are new to us
    Watching the dunning letters along the way
    Talking it over just the two of us,
    Scrambling finances day by day

    And when the evening comes, we hide
    So many bill collectors ringing
    We'll find a place where there's no telephone
    And yes, we've just begun

    Peter Galuszka

  85. Anonymous Avatar

    Maquarrie also has a new kind of fund where investors can invest in transporttion infrastructure like railcars, etc.

    This has been done before but these funds have a new twist. they involve high management fees risidual cost calculations and a bunch of other pieces. Like some derivatives or hedge funds, I don't know how you would ever figure out what the underlying properties are worth.

    I think Maquarrie and transurban are closely linked, and like the HOT lanes the whole thing depends on some pretty fancy financing.

    Take it for what it is worth.

    ———————–

    Now, Larry, you say that support for transit is built in to Transurbans HOT lane contract, and you also say this is a new wrinkle. Please explain.

    —————————

    "More than 60 percent of travelers support HOT lanes on I-95/I-395 if some of the revenue goes to support public transportation in the corridor"

    Of course they do. They each hope that someone else witll ride transit or someone else will pay the toll and therefore stay out of their way. it is just another way to tax "the other guy".

    All we can hope for is that those same 60% who CLAIM to support HOT lanes in the abstract with no costs applied to thmeslves, don't actually go out and actually try to USE the HOT lanes.

    ——————————

    "You can still disagree as well as others but it's irrelevant at that point."

    If it is true that someone is actually being cheated, it is never irrelevant. But look at my restaurant example above, in case 1. The majority decides to eat vegetarian and the meat eaters complain. They don't value vegetarian meals as much as the majority does, but they have no basis to complain because the price of those meals is both current and subject to market pricing.

    As long as that is the case, I agree with you that the complainers complaints are irrelevant. But if that is not true then no matter who sets the price, it is most probably wrong.

    Lets face it, the EPA setting the valuation for rules they enforce, is a case of the chickens guarding the henhouse. They can cackle all they like and set any rules they like, but the truth is still out there, being discovered. We may as well know what that truth is as take EPA at face value.

    But, if someone said back in 1987 that roads are worth 20 cents in tax per gallon,then they made a crude cost benefit calculation. there is no reason to expect that calculation to be valid today because it is neither current no subject to market pricing.

    I agree with you that there may be complainers that have no standing. WE know that industry has ome to public commnt on some bills with dire predictions. Yet somehow when faced with the real problem at hand they find a cheaper, better, solution.

    So, by now, we have a pretty good handle on what unleaded gas and enforced catalytic converters for all cost us and we conclude it is a good deal.

    (I suspect that enforced health care for all will be a similarly good deal, but some people don't, yet.)

    But those catalytic converters also created a black market in palladium and platinum, so that is a new cost that should be added to the equation. Whether it changes the outcome or not.

    The clean air act also allows provision of a cap and trade mechanism for the emission of SO2, and so there is a case where the regulation is also controlled by some limited market forces.

    Unless we have a way to discover value in the market we can never simply dismiss someone's claims as cranky. you are right in saying that THEY do not get to establish the price, but neither do YOU.

    The nature of prices and values is that they change, so by locking a price in at the courthouse, all you do is guarantee that some kind of cost/value imbalance will occur, and that is wasteful.

    RH

  86. VDOT negotiated as part of the concession – that some toll money would go for transit, VRE, carpool lots, etc.

    Up until the last few years, it was an up or down plain vanilla toll proposition.

    For instance, the CBBT and Powhite Parkway were self sufficient on tolls, did not require a subsidy an did not generate excess funds for other roads or transit.

    they're even listed on VDOT's budget as separate accounts.

    But the "new wrinkle" is charging more for tolls for a road and using the excess for other roads or transit or both.

    that's different – and Va is not alone – it's becoming more widely practiced – basically because it's a new revenue stream to take the place of the failing gas tax.

    and it's not just because the gas tax has not been raised in umpteen years.

    It's a recognition that to generate significant new funds in an era where cars are much more efficient than 20 years ago would require 25 cents or more and while that is not an impossible proposition it is dang near it.

    this is going on at the Federal level also – basically both the State and Federal gas taxes for virtually 100% committed to existing obligation for maintenance and operations with almost nothing left over for major new roads.

    That leaves tolls as the only other path…

    now again.. there is no benevolent dictator who will make things right here.

    we have a process. It's called elections.

    You have a couple of guys called McDonnell and Deeds and one of them pretty much promises to raise the gas tax a quarter and the other guy says he doesn't need to if he can sell some liquor stores, let NoVa keep some of it's sales tax, toll I-95 at the borders, and dedicate any budget surplus to transportation.

    People will choose from these two.

    That's the way we make decisions.

    I'd only point out that counties tax automobiles just like the state does but we say the state should dedicate that money to transportation but we do not hold the counties to that same standard so then the counties say that the State is "not doing it's duty" to fund transportation.

    all of this boils down to one thing – tolls.

    and no.. they're not charging the guy behind the tree.. they're charging the guy who says that he has no choice but to live far from work and drive solo every day at rush hour to get there.

    if that guy wants congestion relief – it appears to me he's going to have to pay to get it.

    Deeds is not going to give it to him.
    McDonnell won't
    and NoVa counties won't

    so he's gonna pay tolls…

  87. Groveton Avatar

    I've been in Australia this week. Just got back last night. Saw Jim's article on state economics and 86 comments! I thought, Wow, that really got a response! Then, I added up the sources of the comments – LarryG = 27, RH = 53, everybody else – 6.

    Glad to have LarryG and RH commenting but it seems like we need to get a few more participants. Whatever happened to Accurate and Deana and Darrell …. etc?

  88. Groveton – would I be too nosy if I asked you what kind of work takes you worldwide?

    I'm very envious…you're visiting all the places I've always wanted to.

    and guilty as charged on the posts.. I need to get a life…

  89. Groveton Avatar

    LarryG – I work for a technology services company with contracts all over the world. I am the head if technology (chief geek type of thing) for the company.

  90. Anonymous Avatar

    Existence values are an unusual and somewhat controversial class of economic value, reflecting the benefit people receive from knowing that a particular environmental resource, such as Antarctica, the Grand Canyon, endangered species, or any other organism or thing exists.

    Existence value is a prominent example of non-use value, as they do not require that utility be derived from direct use of the resource: the utility comes from simply knowing the resource exists. The idea was first introduced by John V. Krutilla, though he used the term "sentimental value."

    ——————————-

    There is a price for anything.

    RH

  91. Anonymous Avatar

    "basically because it's a new revenue stream to take the place of the failing gas tax.

    and it's not just because the gas tax has not been raised in umpteen years."

    ——————————–

    How many more hundreds of million do you think would have been raised had the gas tax been a sales thax instead of a per gallon tax? Of COURSE it is because thegas tax hasn't been adjusted.

    ————————————

    "It's a recognition that to generate significant new funds in an era where cars are much more efficient than 20 years ago would require 25 cents or more and while that is not an impossible proposition it is dang near it."

    ———————–

    Complete and utter horse manure.

    A toll of a penny a mile is just about equivalent to a gas tax of $0.25 per gallon.

    The tolls will be many times higher than that, so it isn't a mattr of how much, or what is politically and economically acceptable, it is a matter of who pays it.

    By using tolls you can circumvent the state constitution requirement that taxes be appllied equally.

    RH

  92. Anonymous Avatar

    We are not going to get congestion relief by charging tolls onthe HOT lanes.

    RH

  93. actually the quid pro quo with congestion pricing is that you pay and you get a relatively uncongested, reliable trip.

    and you can make up you mind if you got your money's worth each and every time without having to pay someone a penny a mile and worry about not getting your money's worth.

    quid pro quo transactions are superior to taxing with a promise.

    that's what people want.

    they're tired of paying taxes with promises of what they'll get that never materialize.

    With this particular meltdown, we have an opportunity to go back and get rid of the things of questionable value.

    I think it is the perfect environment for someone like McDonnell but not Deeds.

    and I can pretty much predict that McDonnell is not going to favor a gas tax increase nor taxing by the mile but will support tolls.

    there's that nasty old mob role rearing it's ugly head again.

  94. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    Actually Groveton I've been taking a break from blogs, content to allow the optimists free reign until after the election. You see, it's all well and good to advocate new money for the pet project du jour or apply tolls to every piece of asphalt in sight, but reality will set in soon enough.

    From sea to shining sea, Americans are facing an unprecedented assault on their meager paychecks. Big government, and even little government, is putting together plans to maintain their tax and spend ways. Big business, and even little business, is putting together plans to push their increased overhead down to the consumer and employees. And the little guy, well he's at the bottom of a food chain with no avenue of escape other than being eaten alive through bankruptcy and poverty. Even those who thought they could save their way out of the carnage will find themselves listed on the daily special.

    "No Mo Tax" is a great campaign slogan that flies in the face of past actions by both parties when times were good. Now that the solvency of the state is once again on the line, do you actually believe the GOBs will implement what they promised in 1995? Back when they were elected by a solid voter mandate to reform government? A mandate which no longer exists because today's reality trumps slogans, false promises, lost opportunities? What does it matter who captains the teams in an empty stadium?

  95. I think Darrel's retirement parable is right on target and wouldn't mind hearing from Groveton also.

    I just want to point out that many paycheck stubs have a plethora of items representing unemployment insurance, worker's Comp Insurance, Medicare and Social Security.

    and it's true – each of these costs will reduce the paychecks of those who work there.

    but here's the deal.

    you could take away all those deductions and give folks a bigger paycheck – and tell me that they need to put aside some of their paycheck for each of these things because some day – they might need workers comp or they might retire and need medical care.

    But many of the folks will not.

    they'll instead head down to the local Walmart and get that big screen HD TV they've been eyeing..

    an then 30 years later when they are broke and need "assistance" they will come to their Ex Boss and tell him that his taxes are going up again to 60% of his income – to pay for all those folks who spent their money on sporty GM cars with $1000 chrome rims or a speaker system designed to blow out the windows of the folks around you at the traffic signal.

    Unfortunately, when we decided a long time ago that we would not have 'our people' homeless and dying in the streets and that we would pay for their needs – we committed ourselves to a path where we either force them to set aside money for their future needs – or we will tax the dooda out of those who did have a lot on the ball and formed their own small business.

    When the owner of that tire shop has to pay health care premiums – incorporated into his premiums is the cost of treating people without insurance in the ER.

    So.. I would submit to you Darrel, that the owner of the tire shop is right on the issue but wrong on real life.

    Real life requires us to take money from people's paychecks to set aside for their future needs – because many of them will not do it themselves and without that forced savings plan – your kids – you know the one's you teach to be self-reliant and personally responsible will end up being taxed to death to pay for these folks.

    The tire shop guy is so worried about me, me me, that he really is not seeing the longer term issue.

    Will his workers have less money to spend? Yes.

    Will they have to live in a more modest home than they'd prefer or work a second part-time job or not trade their car in every 3 years or hold off buying the large screen TV or eat at McDonalds only one day a week instead of three.

    Yes.

    social security is not a govt welfare program – it's a forced savings program.

    I'd rather see the govt take money out of that guys paycheck for 30 years than for him to be buying lottery tickets or Bombay Gin with that money.

  96. Anonymous Avatar

    "there's that nasty old mob role rearing it's ugly head again."

    At least you recognize it for what it is, now.

    The majority has no right to steal from the minorities.

    RH

  97. don't they do that every time we have an election?

  98. Anonymous Avatar

    don't they do that every time we have an election?

    No.

    They elect representatives. Those representatives have the job of adminsitering the law fairly and justly to everyone.

    Those representatives may elect to bias the administration in favor of what the majority wishes, in order to enhance their chances for re-election.

    Theoretically, that bias is held in check by a system of laws protecting minorities and other checks on their elected authority.

    When elected officials bend, break, or ignore those rules and customs, then they are stealing.

    Election by a majority of and by itself does not constitute stealing. That happens when the majority attempts to get something for nothing.

    RH

    RH

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