Unelected Regional Transportation Authorities

Let’s say the Virginia Senate tries again to push a new level of government, unelected regional transportation authorities, on Virginia. Virginians rejected this at the polls twice – 3 times if you count Jerry Kilgore’s loss.

Need a little help from the lawyers amongst us or those in the know of the Code of Virginia.

What prevents the Governor and VDOT from starting any major transportation projects – if the GA provides the funds?

For example, what stops the Governor from saying, “Here is the answer for the Third Crossing. It will cost $x million in Year One. It will connect truck and rail traffic from the Port of Virginia to the southside connection to Rte 460. It will include the expansion of the existing Hampton Roads Bridge-Tunnel with four new lanes and two new tubes carrying two lanes each. Tolls will be collected on every crossing of the James River from the Jamestown Ferry, James River Bridge, Monitor-Merrimac to the Hampton Roads Bridge-Tunnel to help pay for the Third Crossing. VDOT will set the fee for the tolls and I will review it. I need the GA to provide the funds for the next 20 years in these amounts – please include the first two years in this budget.”


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21 responses to “Unelected Regional Transportation Authorities”

  1. Ray Hyde Avatar

    Unelected is the key phrase here that makes my blood boil. It is not bad enough that people don’t go to the polls because government because government is so impossible and unresponsive anyway. It is not bad enough that they resort to subterfuges like too-small meeting rooms and public herings when no one can attend. It is not bad enough when government avoids sunshine like the plague, now they want more government that is unelected.

    This, by the way, is my main problem with conseration easements: they turn land use governance over to non-elected entities. I think it is wrong, and unelected governance for highways is even more wrong because more public money is at stake.

    Thank you JAB. We don’t alwyas agree, but this time I do.

  2. Anonymous Avatar
    Anonymous

    Well, the first cracks are showing in this year’s budget fight. The Senate Finance committee shot a blank with its regional authority plan and had to scramble today to even put a plan in play. They are clearly not singing from the same sheet of music , as is evidenced from their retreat to their former plan (except for the abandonment of their crazy refundable gas tax scheme). Opponents of tax hikes should seize upon this opening.

  3. Ray Hyde Avatar

    I think a gas tax hike is the best plan. Pay for what you use. Pay more if you drive something heavy. Pay more if you drive ore. Even if you are not a driver, the costs of things you use will rise in price. What’s not to like?

  4. Larry Gross Avatar
    Larry Gross

    well.. how about sending gasoline taxes to Richmond/VDOT to continue the practices you say you dislike?

    and.. elected officials becoming citizens in the fall elections?

    and.. of course that elephant in the closet in the form of those that say that the more you charge for gasoline (by increasing the taxes on it), the more people will choose whatever means available to them to purchase less gasoline so that at the end of the day – there are less gas tax revenues?

  5. Larry Gross Avatar
    Larry Gross

    I note the dreaded word “balkanize” was used to execute the coupe-de-grace on the regionalisim approach.

    Like… our local jurisdictions are not already balkanized with respect to own respective jurisdictions.

    or .. for that matter.. that most urban areas are already, in fact, governed by Federally-mandated regional MPOs that essentially decide what regional projects will be approved with whatever funding comes from Richmond – with VDOT’s able assistance of course.

    Gee.. does the fact that localities build their own schools and libraries and water/sewer mean that they’re “balkanized” on those issues also?

    and.. what about localities agreeing to build regional judicial and prison facilities, or libraries, or water/sewer systems, et al is a BAD thing that needs to be squashed quickly before it gets worse?

    but hey.. throwing the “balkanize” bomb into the transportation fray is sure a good way to further the dialogue.. right? 🙂

  6. Ray Hyde Avatar

    Well, you got me. I concede to having mixd feelings, but let’s try to rationize it. First you can’t do anything if the money isn’t available.

    Say you subscribe to JAB’s approach that taxes kill the economy. If NOVA and HR raise new taxes of their own, their economies will contract and less money will be available to flow to the state.

    Now say that doesn’t happen. For years NOVA and HR have been sending money downstate so Richmond can have relatively uncongested travel. Even if the rest of the state cannot provide very much to send to NOVA and HR to solve their road problems they ought to realize that continuing the current situation will also affect business here, and hence revenues. Accordingly they should accept the idea that maybe the allocations should be shifted such that NOVA and HR get to keep a little more of what they produce.

    If that doesn’t happen at least places like Ladysmith can get some new roads to help absorb the inevitable influx of refugees from NOVA. And, If NOVA continues to support anti road groups that lobby against every project, they will have no one to blame but themselves for the results, and, they can always move downstate.

    Maybe that possibility will be enough to scare the rest of the state into their senses.

  7. James Atticus Bowden Avatar
    James Atticus Bowden

    Help! No one answered the legal question. Do the Governor and VDOT have all the legal authority to move out on major transportation projects if the GA provides the funds?

  8. Larry Gross Avatar
    Larry Gross

    State Transportation Plans are required by the FHWA to be “financially constrained”

    What this means is that, by law, the dollar cost of the projects for any given year AND for future planning windows cannot exceed known available funding in those timeframes.

    So basically, you have a pot of money and it’s up to the state to decide what projects to include – not to exceed the known available funding.

    What this means is that yes, the Gov, the General Assembly, or VDOT can decide which projects to include as long as the total cost of all of the projects does not exceed known available funding.

    So, yes, the Gov can essentially prioritize which projects but if in the process of doing so the total costs exceed available funding, he has to “balance” the plan by removing other projects.

    OR.. if additional funding is provided, he can add new projects but again only if those new projects do not total more than the new funds.

    Prior to Mr. Schucet taking over VDOT, VDOT ignored this requirement and apparently no one at FHWA intervened to force the use of the constrained funded law.

    VDOT kept adding some many projects that they not only violated the constrained funding requirement but actually got to the point where daily cash flow was insufficient to pay for projects already obligated and programmed for construction.

    What Mr. Schucet did when he found out was to force VDOT to remove projects from the 6yr plan so that:

    1. – their cash flow problem was rectified

    2. – that the 6-yr plan did not have more projects than there was identified funding for.

    The concept of constrained funding is not a novel concept. It is utilized by most localities with respect to the CIPs (capital investment plans).

    This practice is effectively enforced by independent auditors that review those CIPs.

    In Virginia, that function is performed by the Auditor of Public Accounts.

    The Virginia auditor found that VDOT was violating both the spirit and intent of constrained funding and further than it had no stated process for keeping it’s 6yr plan in financial balance.

    It’s odd to me that previous Governors did not respond to what the State Auditor reported and further than bond rating agencies were not influenced by this lack of financial rigor – which is usually a key factor for Bond Agencies when rating state finances.

    So the simple answer is that the Governor can designate priorities but not without consequences with respect to the rest of the projects in the 6yr plan and not without consequences from bond rating organizations on Wall Street.

  9. Larry Gross Avatar
    Larry Gross

    Everything I read no days about the future health of the gas tax as a viable revenue source points to problems.

    For instance, in Virginia, one penny increase of the gas tax generates around $50 million dollars annually.

    Put this in context. A single rural interstate interchange will cost about $50 million.

    Urban interchanges in areas like NoVa can be more than 10 times that amount. The Springfield Interchange cost more than $700 million dollars.

    Say.. for the sake of argument that NoVa convinced the state to provide funding for another interchange similiar to Springfield.

    The state would have to raise the gas tax 14 cents STATEWIDE just to pay for that one new interchange – AND, the rest of the state localities would get absolutely zip even though they’d all be paying 14 cents more for gasoline.

    It does not take a rocket scientists to see how far such a plan would fly if proposed in such stark terms.

    The current gas tax buy’s about 1/2 of what it did in 1980. That means that the gas tax would have to double to recoup parity with 1980 revenue.

    That would mean adding 17 cents to the price of gasoline in Virginia.

    On one level, this does not seem like an overwhelming burden given the fact that 17 cents is, while not chump change, only a small percentage of the $2.50 per gallon price.

    But it’s what that 17 cents would provide that’s what shows folks what a futile effort it would me because it would, in effect, only provide around $850 million new dollars for the entire state.

    It IS enough to build SOME new infrastructure but with VDOT claiming a current backlog estimated at 100 Billion… it would take more than 100 years for the doubled gas tax to provide enough revenue to pay for what is currently identified – and one would have to assume that no new projects would be identified in that same time period unless the gas tax were continued to be increased each subsequent year to maintain parity.

    OKAY …

    So, we have some folks who say that if we do not fund new roads that our economy will suffer.

    THEN – we have other folks who say that tax increases will also damage our economy – and I would posit that increasing the gas tax by 17 cents this year and then adjusting for inflation in future years WILL HAVE consequences.

    The most predictable of the consequences is that an ever increasing gas tax on top of a steady rise in the price of gasoline will result in consumers buying LESS gasoline.

    This is already happening nationwide as gas tax revenues are FLAT and are expected to decline even if the tax is increased – and in fact, some believe that it will decline even faster as the price of gasoline goes up.

    Bottom Line – it is not considered a viable and sustainable source of road funding in the future.

    It won’t go to zero but it will fall further and further behind in it’s ability to keep up with new road building.

    This is why the General Assembly is looking at taxing automobiles, insurance, and bad drivers and it’s why VDOT is entertaining TOLL Road proposals from private investors for roads like I-81, I-66 and I-95.

  10. Ray Hyde Avatar

    Thank you, Larry. That was an excellent discusion on fiscal constraint. Combined with the federal air standard requirements it explains a lot that I didn’t know.

    The argument on the gas tax is excellent, too. I have a question though. If the gas tax is flat, even in the face of increasing rates, how can that be? Cars are more efficient, but it’s hard to believe they are that much more efficient, especially considering the popularity of SUV’s and big, powerful cars. Considering that and the huge numbers of new vehicles, it’s hard to see how the gas taxes can be flat in the face of all of that.

    That would seem to make it appear that our road needs might not be as great as advertised. Further, if increased taxes reduce auto use further, those needs might also be decreased. In accordance with JAB, I’m not sure I like the economic ramifications, but there it is. As I’ve pointed out before, if Americans buy less gas, that doesn’t mean that less gas will be produced and sold, just that it will be sold to our economic competitors.

    My thoughts are, and have been for years, more like fifty cents a gallon, which is of course off the political map, unless you consider the European experience.

    You have a certain level of fixed expenses in roads: they’ll fall apart just sitting there unused. On top of that additional expenses accrue due to usage.

    Bacon has argued correctly that our usage projections are based on historical facts, some of which are unlikely to repeat, and so the projections are inflated, and the costs as well. Nevertheless, vehicles and vehicle use seem to be increasing. That drives revenue and some expenses up, while increasing efficiency and higher driving costs drives revenue and some expenses down. Increasing the tax rate beyond some point may generate no more revenue, but still encourage what some view as more socially acceptable behavior, which might also be economically catastrophic.

    As people adjust to higher energy prices they will migrate closer in, so their savings will be partially offset by higher housing expenses and taxes. Plus, cities are giant energy sinks, so we won’t even get all the nergy savigs we think.

    Anybody want to try to graph those curves? How do you post a picture on here? This is wonderfully complicated, it makes me dizzy to chase the conflicting issues around in circles.

    Maybe EMR is right, and the only solution involves Fundamental Change that results in most people living in cubes and walking to work. Then all these messy issues will be perfectly planned and everyone will be happy and content.

  11. Ray Hyde Avatar

    The government has input output diagrams, in which all the SIC codes are arranged across the top and down the side of a grid. To see the outputs of an industry you look up the code and read across. The output is broken up into pieces and placed under the SIC code for which that output appears as an input. On an annual basis this is a zero sum game, except that one of the industries is investment, which is where profits go.

    If you can imagine printing these things on plexiglass and stacking them up annually, like three dimensional tic-tac-toe, it is possible to observe the ebb and flow of inputs and outputs over time.

    Consider the fuel industry. If the economy was perfectly balanced the sam propoartion of fuel outputs would be allocated to railroads, trucks, and home heating every year. If you had soda straws representing the percentage of market, you could drive them stright down through the stack. Instead, conditions change all the time and those annual equality indexes slope one way or another over the years.

    I’ve been accused here of making the argument that no matter what we do, we are screwed. I don’t think tht is necessarily true, but when you look at those input output diagrams, it makes it clear that every time you propose a policy to fix a problem, the changes echo throughout the grid until you reach a net zero sum.

    Under this model, whether we are better off collectively is measured by the total amount of reinvestment we can forward to the next year. Whether we are better off individually depends on where we are on the grid: politics consists of advocating for your area of the grid.

    So, when I raise the objection that says “But, But…..”, I’m just considering the effects on the grid. This simplifies my way of looking at things, and it doesn’t require either a Republican or a Democraticviewpoint.

    As an environmentalist, I see a major failure in this model, in that the environment is not assigned an SIC code.

  12. Larry Gross Avatar
    Larry Gross

    Here’s an explanation from Oregon – but the basics hold true nationwide as there is nothing unique about Oregon.

    “Why is it necessary to replace the fuel tax on gasoline as the principal source for
    funding our roads?
    The state of Oregon is heavily dependent upon fuel tax revenues. For the year 2002,
    state and federal fuel taxes were 70 percent of total state revenue for roads. Our
    ability to pay for roads is at risk when fuel tax revenues begin to flatten or decline.
    Fuel efficiency of Oregon’s automobile fleet has eroded fuel tax revenues over the
    past 30 years.
    Further improvement of automobile fuel efficiency, particularly with the adoption of
    the hybrid electric vehicle engine, will have an even more dramatic effect on fuel tax
    revenues in the not-too-distant future. The expectation is for a gradual decline of fuel
    tax revenues beginning in about ten years. This situation could accelerate if gas
    prices rise significantly due to world events.”

    http://www.oregon.gov/ODOT/HWY/OIPP/docs/ruftf_2003feb14_faq.pdf

    and they continue:

    “Isn’t the gas tax a “user pays” system?
    The fuel tax on gasoline used to operate like a user fee, but not any more. Back in the
    1960s, nearly all vehicles achieved the same approximate gas mileage, about eight to
    ten miles per gallon. If a person drove more, they paid more for the additional burden
    placed on the road system.
    With the coming of more fuel-efficient vehicles after 1975, things changed. Some
    drivers began to pay much less than their fair share for their use of the roads. Vehicle
    fuel efficiency increased from an average of 11.8 miles per gallon in 1970 to nearly
    20 today.
    The future outlook follows the same trend. Fuel-efficient vehicles now entering the
    marketplace will further increase the average miles per gallon.”

    This is one of those issues that is pretty much under the radar screen for the average John Q Public but there is not a legislature or Department of Transportation nationwide that is not concerned about this – including the Virginia GA and VDOT.

    The discussion at this point is not about whether plug-in hybrids will become viable but only when and the “when” may be as soon as 2007 – and they’re conservatively estimated to get about 80 mpg.

    Now think about the implications of this with regard to the gas tax. Cars that get.. not 20, or 30 mpg but over 80mpg.

    In other words, cars will go 4 times as far on a tank of gasoline and … will pay only 1/4 the gas tax.

    To keep up, you’d have to quadruple the State gas tax to 68 cents a gallon from the current 17 and that’s just for the state gas tax.

    The Fed Tax (which funds virtually all of Virginia’s new road construction) would have to go to 72 cents a gallon to maintain parity.

    That’s $1.40 that would have to be added to the price of a gallon of gas as a direct consequence of more fuel efficient vehicles.

    It would drive the per gallon price of gasoline to $3.90 a gallon – similar to what it is in Canada and Europe.

    What will folks do if the cost of gasoline goes up?

    Most folks will buy more fuel efficient autos – especially those that commute long distances.

    The dynamics work against the gas tax as continuing to be a viable revenue for roads.

    The dynamics really only worked as long as cars got really bad mileage.

    If you ask members of the General Assembly who are on the Finance and Transportation Committees – they will tell you the same thing.

    And that is why you don’t see them proposing an increase in the gas tax. They know it won’t work but they can’t resist claiming that they’re against higher taxes – a convenient “side-benefit”!

  13. Ray Hyde Avatar

    See. Those @#**!!! environmentalists screwed us again by insisting on better gas mileage.

  14. Jim Bacon Avatar
    Jim Bacon

    Larry, I agree with much of your analysis in your 4:32 a.m. comment about the gas tax. I would make the following follow-up observations:

    (1) The gas tax, though not perfectly stable, is a more stable revenue source than any of the alternatives considered by the state Senate.

    (2) The cost of new construction is outrageously expensive, which is why I’m so vocal about examining transportation alternatives. However, we have thousands of lane-miles of roads that need to be maintained, and VDOT forecasts suggest that the maintenance budget eventually will eat up all of our gas tax revenues. Assuming that we want to maintain our investment in roads and highways, we will have no choice but to increase transportation revenues. Until we can figure out how to tax motorists on a per-mile-driven basis, I would argue that the gas tax is the best source of revenue for maintenance.

    (3) As maintenance costs continue to escalate (higher prices for asphalt, concrete, steel, etc.), Virginia will have to adjust the gas tax upward. That’s common sense. The politicians just don’t want to do it because they don’t like raising taxes, even if it’s an easily defensible user fee.

  15. Ray Hyde Avatar

    I think you are right Jim. Larry’s analysis just shows that my fifty cent figure may be too low.

    I would still prefer an unconscionably high gas tax to a per mile tax. Per mile tax doesn’t cost more for those with heavier and more polluting vehicles. Gas tax doubles as a user fee and a carbon tax.

  16. Larry Gross Avatar
    Larry Gross

    Jim/Ray –

    Currently the funding model is basically along the lines of using the state tax for maintenance and the Fed funds for new contruction.

    I agree with Jim about maintenance.

    You need to have a stable year-to-year funding source for maintenance and not special GA appropriations which would be a disaster in terms of keeping our roads in good repair.

    But you may already notice that VDOT is NOT maintaining our roads to high uniform levels already.

    They are already under much stress.

    But Senator Houck has pointed out that every year 200 new lane miles are added to our system every year.

    But what is really interesting, is that he says that most of those new lane miles are from new roads in private developments (built to VDOT standards so they state will accept them into the state road system) and that only a fraction are new public infrastructure.

    The argument in Richmond is presented and perceived by the public as what to do about the Backlog of proposed new roads that there is no funding for.

    The House of Delegates are saying that we CAN build new roads on a year-by-year funding basis basically by saying – “we’ll build what we can with whatever surplus we have”.

    Of course the fly in that ointment is that others count on that surplus to fund increases in teacher salaries and medicaid and the like so .. you’re setting up a dynamic where new roads will compete against existing priorities.

    That’s all about NEW construction.

    The gorilla is road maintenance because every new road built means a road that has to be maintained.

    Our maintenance budget grows every year not only due to inflation and the high cost of materials but because we have 200 more lane miles also.

    The dollar numbers I cited in the earlier post in terms of keeping the gas tax revenues stable enough and viable enough to continue their dedicated function are not unreasonable and, in fact, really analysis done by other state DOTs and the gas tax as a funding source is structually doomed.

    Not in a year. Not in 5 years but most believe within a decade as technology will produce much more fuel efficient vehicles that will replace older less-efficient cars as they reach the end of their useful life.

    So, even if there was an agreement to add an inflation factor to the price of gasoline – that would only cover the increased costs of goods and materials necessary for maintenance.

    It will do nothing with respect to the advent of more and more fuel efficient autos – and in case anyone really wants to get concerned, do a simple GOOGLE on plug-in Hybrids.

    These are cars that plug-in at night to recharge at a rate equivalent to $1 a gallon gasoline.

    These cars have a 60 mile range – well within the average commute of many commuters.

    … AND when you power them with electricity – you pay ZERO gas tax.

    So.. folks speculate about when or if these cars will come to the market but if you were a gambling person – which side would you put your bets on?

    Myself, I’d not bet against the hybrid plug-ins (or equivalents) over the longer term.

  17. Larry Gross Avatar
    Larry Gross

    re: environmentalists…

    nope.. these are ordinary “non-green” folks who replace their gas guzzlers with 30mpg Hondas.. not to be “green” environmentally but to be “green” financially.

    Note the government is not requiring people to buy 30mpg cars and really cars like Hummers are equally available.

    It’s just that for every Hummer than someone chooses to buy, there are 50 folks buying Hondas.
    🙂

  18. Jim Bacon Avatar
    Jim Bacon

    Larry, you raise a good point about the long-term fate of the gas tax. Eventually, the entry of electric cars and other non-gas technologies will create two classes of cars: those that consume gasoline and pay the gas tax, and those that don’t. Obviously, that undermines my principle that those who use the road system should pay in direct proportion to which they use it.

    In order to preserve that principle, ultimately Virginia would have to move to an Oregon-like system that taxed motorists for road maintenance on a per-mile-driven basis.

  19. James Atticus Bowden Avatar
    James Atticus Bowden

    Larry Gross: Dunno the background for your expertise, so thanks for the feedback on the legality.

    “What this means is that yes, the Gov, the General Assembly, or VDOT can decide which projects to include as long as the total cost of all of the projects does not exceed known available funding.”

    So the Republican Senators have no one to blame but themselves since the Jan 00 session.

  20. Anonymous Avatar
    Anonymous

    Where was the logic in comparing unelected transportation authorities to land trusts? Conservation easements do not turn land use over to unelected entities. They preserve environmentally sensitive land and, to a large extent, prevent land “use.”

    Conservation easements often result from partnerships between elected government entities and land trusts. The land trusts assume the costs of protection. Reminds me of the much ballyhood public-private partnerships for road improvements.

  21. Ray Hyde Avatar
    Ray Hyde

    Local officials either buy conservation easements through PDR’s or coerce them as proffers in support of some other development. Government also offers tax incentives to those that can afford to give away conservation easements.

    In any case control of the easement then passes to a non-elected (publicly elected anyway)board of the land trust. Permanently. The local officials have then abdicated any responsibility for use of this land, Permanently. Preventing land use is the ultimate control of land use.

    Ordinarily it is not allowed that you can pass a law in such a way that it cannot be unpassed by your successors, so conservation easement violate this principle. If, at some future date the local authorities decide they need the land for some other purpose, they are out of luck because they no longer control it.

    I know of one case where local officals created a greenbelt and later wanted to undo it. they had to petition the legislature at great expense to do what would have been under their control had they not granted the “permanent” easement in the first place.

    In effect, the local officials abdicate their responsibility to manage land use, and remove permanently the right of future generations to elect the people that control the land use, or non-use as you say.

    Land conservation is important, but this isn’t the way to do it. If we continually add land to the conservation rolls, we will eventually cross over the point at which it is advantageous. The result will be higher housing prices, lower economic productivity, etc. The conditions that lead us to preserve land today, may be entirely different in the future.

    I once asked a VOL official what their final goal was, when they thought they would have enough. You would have thought I had slapped her in the face. “Well, I don’t know, but clearly we don’t have enough”, she said.

    If easements were protecting environmentally sensitive land, or preserving farming, that would be one thing. But even American Farmland Trust concedes that easements do nothing to promote farming, or guarantee it will continue on the land. Furthermore a considerable amount of land under easement isn’t protecting the land so much as it is protecting the privacy of homes located within the easements: private parks held partially at public expense.

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