Who’s Getting Hosed?

by James A. Bacon

Everywhere I go around Virginia, I encounter a universal sentiment: “We’re not getting our fair share of state transportation dollars.” Northern Virginians take it for granted that the politicians in “Richmond” are short-changing their region, the economic engine of the state. Downstaters are equally convinced that NoVa, with its voracious transportation needs, is hogging more than its fair share.

Who’s right?

Sen. Janet Howell, D-Reston, asked the Senate Finance Committee to figure out how much each region of the state pays in transportation taxes and fees and how much money each region gets back. Remarkably, no one had ever made that calculation before, at least not in the 12 years that Jason Powell, the legislative analyst for the SFC tasked with the job, has worked in Richmond. The results he came up with (view here) are surprising — although they must be taken with important caveats.

First, we can drive a spike through the long-held myth that Virginia’s highway funding formula routinely short-changes Northern Virginia. In truth, NoVa, which accounted for 28% of Virginia’s population in Fiscal 2010 and a like percentage of the state’s annual gas tax revenue, received 33% of all transportation dollars in Fiscal 2012.

For all the ire that Northern Virginians direct at “Richmond” — as if the inhabitants of the Richmond region were culpable for the transgressions of state government — the Richmond transportation district, with 15% of the state’s population, contributed 16% of all state highway revenues in FY 2010 and got back only 11% in FY 2012!

Here are the numbers, which I have extracted from Powell’s presentation, ranking the VDOT districts by winners and losers.

(Click on table for more legible image.)

Jeff Schapiro, the Times-Dispatch reporter who highlighted the findings in a column this morning, framed the issue from a downstate Virginia perspective:

When it comes to total state spending, Northern Virginia consistently plays the victim. Its legislators yowl that the region, with its usually robust, federally fed economy, keeps the entire state afloat. That’s a tad hyperbolic. Because personal income in Northern Virginia is higher than the statewide average, the area generates more revenue relative to its percentage of the total population.

This is what literally makes Virginia a commonwealth: It shares its wealth.

As for highway finance, Northern Virginia can’t scream poverty. Of nine transportation districts, two — Northern Virginia and Bristol — take out more than they chip in. Bristol, with 4.6 percent of the population, produces 4.8 percent of road revenues, but draws 8.2 percent.

Schapiro’s analysis may appeal to downstate politicians, but the caveats are important. First, there is no way to know exactly how much tax revenue each transportation districts contributed. Powell made an estimate based upon population, Vehicle Miles Traveled and tax data. His assumptions are reasonable, but they are still assumptions.

More important, Powell provides only a one-year spending snapshot. While the tax revenue percentages won’t vary much from year to year, he says, the distribution of state transportation dollars will. Indeed, the numbers are already out of date: They do not include $200 million that the Commonwealth Transportation Board recently transferred to the Culpeper District to pay for the Charlottesville Bypass and related improvements.

The numbers could shift even more — and not in NoVa’s favor — when the McDonnell administration begins spending funds from $3 billion in bond issues on mega-projects such as the Norfolk-Portsmouth Mid-Town Tunnel, U.S. 460 corridor improvements and the Coalfield Expressway.

“There is year-to-year variability,” Powell told me. “I was just trying to do the most rigorous analysis I could.”

Will the analysis change anyone’s mind? Probably not. NoVa partisans can argue that FY 2012 is an aberration. And they may be right. We can hope that Powell will update his figures annually. In another 10 or 12 years we might have enough data to settle the debate once and for all.

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20 responses to “Who’s Getting Hosed?”

  1. Groveton Avatar

    Usually I’d say that there are lies, damned lies and statistics. However, in the case of those hailing from Richmond there are numbers and pathological deceit. Nothing else. Nothing in-between.

    The most common form of the Richmonders’ pathological deceit is the use of “argument in parts”. In this transparent deceit they isolate a part of a moral question and use that part to justify an overall belief. In the case of taxation in Virginia, the usual device of dishonesty is to isolate transportation from everything else and then imply that Northern Virginia is getting a square deal.

    Once again, this is what Bacon, et al try to do. They isolate a single year and a single spending category. From that, they try to extrapolate some kind of statistically relevant conclusion.

    Of course, even math-challenged members of Richmond’s self-appointed elite know that their analysis is intentionally flawed. So, in hopes of fending off a quantitative argument that a reasonably well informed fifth grader might make they say asinine things like, “That is what literally makes Virginia a Commonwealth: It shares the wealth.”.

    In other words, there is no overall pretense of fairness. Northern Virginians make more so they should pay for more. Needless to say, there is no mention of cost of living in this mindless diatribe – only delusional ramblings about the literal definition of the word commonwealth. Adjusting wealth by cost of living is something that any self-respecting high school student would understand but also something that lies well outside the aptitude of Richmond’s self- proclaimed elite.

    Once again, we have a simple-minded analysis focused entirely on transportation. In fact, the simple-mindedness is exacerbated by analyzing a single year. And this “analysis” is put forth by a newspaper? Dear God. When will that same “newspaper” report on total taxes vs. total spending? Or, taxes used for education vs. education funding? I doubt we’ll be seeing much of that soon. You see, this “newspaper” is about the usual Richmond elites trying to excuse their 200 years of abject failure and unconscionable greed by trying to claim that things are fair. What a disgrace.

  2. I’m with Groveton on this one. Revenue generation and spending need to be examined on a basis that exceeds a single year. The addition or completion of major transportation projects in the course of a year is going to change the results. A snapshot will produce a skewed representation of what actually happens over time. What happens on a five- or ten-year basis? That would give a much clearer picture of what actually happens. (I don’t know the answer, but would like to see the figures.)
    I am confused by the analysis considering vehicle miles as the Commonwealth uses lane miles, as far as I know. That’s been the beef of urban and suburban areas. Their roads carry many more drivers and funding ignores that factor.
    Finally, we need to consider costs. If it costs less to pave a mile of road in RoVA than in Fairfax County, a tax dollar goes further in RoVA. It’s similar to a comparison of two teachers each making $50 K. What does $50 K buy in rural Virginia versus NoVA?

  3. Groveton, you are foaming at the mouth. You need to pop a Xanax and then re-read the article.

    (1) Pathological deceit? Janet Howell asked for the data, not a downstate politician. Jason Powell compiled the numbers and laid out all of his assumptions very clearly in the document. He drew no policy conclusions from the data. In my article, I went out of my way to state the caveats in the data, including the fact that it represents only one year. Moreover, I gave concrete reasons why future years might change the numbers. Did you read that far before erupting in apoplexy?

    (2) Isolating a single spending category? Now you’re trying to re-frame the issue. No one disputes that the education funding formula short-changes NoVa big time. I’ve never disputed that — indeed, I have oft noted that disparity and advocated ways to create a more equitable formula. But I’m not writing about educational funding formulas today. I’m writing about the transportation funding formula which virtually every politician in NoVa, D or R, believes is skewed against the region.

    (3) I’m not Jeff Schapiro. Indeed, I made it clear that he framed the issue from a “downstate perspective,” and I listed caveats in my post that he did not include in his column. If you want to get mad, get mad about what he said, get mad at him, don’t throw around blanket accusations of what “Bacon et al try to do.”

    (4) Math challenged? Who’s math challenged? I see you spewing a lot of outrage here, but I don’t see you disputing Powell’s methodology. Perhaps his methodology is debatable, but at least he laid it out clearly for all to see. As I warned readers in my post, Powell’s numbers are based on a number of assumptions. But before you reject them out of hand, I’d like to know the grounds you have for disputing them — other than the fact that you don’t like Powell’s numbers.

    Groveton, based upon your reaction, I would suggest that you are the one who is fact challenged and impervious to reason. You know NoVa is getting screwed out of its fair share of transportation, by god, and nothing’s going to change your mind! When you come up with a better way of crunching the numbers, let us know, and we can have a serious conversation.

  4. Groveton Avatar

    Oh gee, TMT, there you go again. Asking grown up questions of childish analyses.

    Here’s another … what is the “Richmond VDOT district”? A tightly drawn area centered on the City of Richmond? You know, the kind of area that could explain a comment like, “For all the ire that Northern Virginians direct at “Richmond” …”. It couldn’t possibly be some gerrymandered BS that stretches all the way down to the North Carolina border, could it? Because if it were some vast stretch of land it might call into question the honesty of comparing it to an urban agglomeration of just four counties.

    Oh, but I forgot my own words, when it comes to the Richmond elite, there are numbers and pathological deceit.

  5. TMT, you raise legitimate issues regarding the proper criteria for allocating transportation dollars. Lane miles? Vehicle Miles Traveled? Regional differences in construction costs? You can make a case for each.

    But that’s not the question addressed in Powell’s analysis. He was simply trying to calculate how much transportation-related tax revenue each transportation district generates and how much each district gets back.

    If you want to make the case that NoVa should get more money back than it does, based on whatever criteria you believe are relevant, then go ahead and make that case. But don’t confuse what you think should be with what is.

  6. Groveton Avatar

    “But I’m not writing about educational funding formulas today.”.

    Of course not. That would require you to look at the issue of fairness in total and honestly.

    “I’m not Jeff Schapiro.”.

    When you use an article as evidence for your argument and directly quote someone, you have to accept criticisms of your reference points.

    “Janet Howell asked for the data, not a downstate politician.”. Janet Howell is a member of the Richmond elite. Just like John Kerry is a member of the Washington elite. Janet “Big Bird” Howell stopped representing her constituents in Northern Virginia years ago. In fact, her secure place among the Richmond elite allowed “Big Bird” to play “Chicken Little” in the recent re-districting crime spree. She dodged a loss in November by redrawing her district to avoid a formidable competitor. In this effort, she was aided and abetted by the rest of the Richmond elite. You see, the Richmond elite is like the Nazi Party. They may be concentrated in and around Richmond but they have members and sympathizers everywhere. Richmond hero Harry F. Byrd was actually from Winchester for example.

  7. Groveton, Once upon a time, your argument used to be that NoVa wasn’t getting as much money back in transportation tax revenue as it contributed. Now, confronted with reality, you’re changing your argument: NoVa isn’t getting as much money back as it should. There’s nothing wrong with making that case, but you really don’t help your cause by going postal and accusing Powell, myself and downstate Virginians generally of “deceit.”

  8. Groveton, stop hyper-ventilating and read the post. I was not using Schapiro’s column “as evidence for my argument.” I was using his column as evidence of a “downstate perspective.” I then proceeded to list important caveats that Schapiro had omitted.

    And you really have to get over this thing about the “Richmond” elite. When you classify Howell as part of this elite, it becomes a meaningless concept. What you’re describing is a statewide political class that happens to assemble in the state capitol complex in Richmond. Just remember, 28% of the General Assembly comes from Northern Virginia, twice as many as from the Richmond region.

  9. Groveton Avatar

    “Groveton, Once upon a time, your argument used to be that NoVa wasn’t getting as much money back in transportation tax revenue as it contributed.”.

    My argument has always been that Northern Virginia wasn’t getting as much back in total as it contributed. I further argued that the excessive focus on transportation to the exclusion of other areas was a form of deceit. I stand by that belief.

    “There’s nothing wrong with making that case, but you really don’t help your cause by going postal and accusing Powell, myself and downstate Virginians generally of “deceit.”

    Actually, I accuse the Richmond elite of deceit. Not Powell and not downstate Virginians generally. Whether you are part of the Richmond elite is a question for you to answer.

    One example of the deception of the Richmond elite is the fact that these calculations have only been requested now, in the run up to the General Assembly election. Apparently, Richmond elitist Janet Howell smells trouble and wants to gin up some half-assed statistics to support her re-election campaign.

  10. Groveton Avatar

    Let me try this tact:

    1. Janet Howell is facing re-election. She has already used the corrupt redistricting process provided by the Richmond elite to try to preserve her membership in the Richmond elite. However, even that may not be enough …

    2. Janet Howell has been in the Virginia Senate since 1992. In her nearly 20 years of elected office she has never asked about the level of contribution and receipt of transportation funds. Why now? Because she can manipulate the question to get an answer which favors her. First, she asks for a single year analysis. Why not ask for an analysis of the 20 years she has been in the State Senate? I assume it’s because it woud prove her ineffectiveness as a representative of her constituents. Powell has no choice. He does what he’s told. So, he provides the information. I have to assume that he could have done the same in the past and could reconstruct historical information if he was asked to do so. I also assume he could branch out and look at total expenditures and total receipts if he were asked to do so.

    But Howlin’ Howell didn’t ask Powell to do any of these things because she wants to distort the truth in her effort to stay in office.

    3. All of which brings me to the supposed journalists in all this. Namely, you and Shapiro. Do you guys ask why the calculations haven’t been done in the past? Not really. Do you ask for data from prior years? No. Do you ask for a similar analysis of other spending categories? No.

    Why not?

    I assume it’s because you are part of the Richmond elite more than you are journalists seeking the truth. The narrow, single year transportation-only analysis suits your needs as propagandists of the Richmond elite.

    Either that or you are unwitting dupes of Janet Howell.

  11. Actually, I think it would be a good idea to track the data back 20 years. I didn’t recommend that in my post, but I did say something similar in wrapping up the post: “Will the analysis change anyone’s mind? Probably not. NoVa partisans can argue that FY 2012 is an aberration. And they may be right. We can hope that Powell will update his figures annually. In another 10 or 12 years we might have enough data to settle the debate once and for all.”

    The critical point here is that we need more than one year’s worth of data to draw meaningful conclusions.

    I have no interest in defending Janet Howell, whose politics I do not share, but I would suggest that it’s a little quick to accuse her of wanting to distort the truth. When she asked for Powell’s analysis, she had no way of knowing the outcome. She had no way of knowing that the FY 2012 data would show NoVa getting more transportation revenue than it kicked in. From what I understand, Powell completed the analysis only a few days ago. She really hasn’t had a chance to assimilate the findings and ask for more additional years of data.

    It’s not even clear what she makes of the data. Is she using it to justify the status quo? I see no evidence of that… at this point.

    Come back in a month. Let’s see what she does or doesn’t do. Then we might have a basis of charging her with intellectual dishonesty. But it seems to be premature to do so at this point.

  12. Jim,
    A snapshot on something as variable as transportation funding is not sufficient data upon which to draw conclusions. The staff was just providing what was requested, and I suspect Sen. Howell requested this because of the election to diffuse criticisms about how much transportation money she’s help direct to Fairfax County. And I tend to believe that NoVA does better on transportation funding than on some other types of state funding. All those side streets that have been developed add up to quite a bit of state money.
    I still don’t understand why when the state uses lane miles, an analysis uses vehicle miles traveled. And costs differences need to be addressed for valid conclusions to be drawn. You might well have drawn the correct conclusion, but the report should be changed to compare apples and apples.

  13. TMT, here’s why Powell used “Vehicle Miles Traveled” instead of lane miles. The gasoline tax is the top revenue generator for transportation projects in Virginia. Because of the way the tax is collected, apparently it is impossible to generate a figure for gallons of gasoline sold for each locality. Therefore, Powell had to look for proxy data. The best substitute he could find was Vehicle Miles Traveled, which is a number that VDOT generates. If you know VMT, you can get a pretty good idea of the number of gallons of gasoline sold, hence, the amount of gasoline sales taxes paid.

  14. I’m amused. If you go to Commonwealth DataPoint and use the drill-down feature – you can get right down to monthly receipts in some cases.

    If Virginia can track how much each locality is generating in sales taxes – in order to allocate them their 1%… then why can’t the same be done with fuel?

    If Virginia can figure out how many Targets and WalMarts are in Nova and Lynchburg and have the ability to decide how much each store generated in sales taxes…then why can’t they do the same with businesses that sell gasoline instead of kitchen utensils and groceries?

    It’s a bogus concept.

    Virginia has the data.

    this is more playing games… and I have the same discomforts that Groveton and TMT have.

    There is a lack of accountability here… and Ms. Howell and her colleagues know it, and have known it for a long time, and have chosen to do nothing about it.

    By the way.. there is a way to cross-calibrate NoVa and that is that the VRE supplemental tax on gasoline of which they account to each locality how much tax was generated (and from that you can get a ballpark number of the number of gallons sold… times the Va gas tax.

    But govt that goes through all the trouble of the Commonwealth Datapoint Site and the Virginia Auditor of Public Accounts – keeping track of every last dollar of taxes and expenditures … EXCEPT for the fuel tax… is not dropping that ball accidentally … it’s purposeful… and Ms. Howell knows it.

  15. Jim,
    I understand the use of “Vehicle Miles Traveled,” instead of what VDOT really does. But I don’t believe for a moment that the Senate Finance Committee staff doesn’t know or cannot find out how much gasoline is sold in each county or city in Virginia. The tax is a on a cents per gallon basis. I cannot imagine the Commonwealth just accepting a dealer’s remittance in dollars and cents. It would not be hard to determine how many gallons or how much money is being collected by city or county. I am with Larry and Groveton. This is another game being played.

  16. TMT, Just for you, I got an answer from Jason Powell. I quote him directly:

    “On page 3 of the analysis I clearly indicate that motor fuels sales taxes are collected at the distributor level not at the retail level. This was a policy decision made in the mid 90s, and would need a Code change. Because my analysis only looked ay State revenue sources, I had to use what was available. You do have better TAX information for the NVTC and PRTC localities that impose the 2.1 percent field sales tax, but since I dont have that data statewide I used the proxy. As I said earlier it appears that population alone could also be an adequate measure but I feel that it includes individuals and children that may not consume transportation resources.”

  17. Jim, thank you for the answer. I have no doubt it was true, but wonder what skullduggery occurred in the General Assembly to create this monster.

  18. well just wait one minute here…

    if PRTC can and does report to EACH locality how much tax was collected – and allocated to each locality – then why can that same process be used to calculate the 17.5 cent tax?

    something is rotten in Denmark…..

  19. The smell emitting from Richmond on this issue reminds me of driving past the stockyards in South St. Paul, MN as a kid.

  20. Groveton Avatar

    The belief that the Commonwealth of Virginia can’t account for the sources and uses of its funds on a locality-by-locality basis is absurd.

    The accounting is not done because it does not benefit the political elite in Richmond to do this accounting.

    Of particular note, the all but useless state legislators we elect in Northern Virginia are the biggest miscreants in this ode to opaqueness. They believe they can get re-elected again and again without ever having to account for the financial impact of their decisions as delegates or senators.

    However, it appears that Janet Howell is running scared. Questions are being asked and it seems she is unable to simply ignore the questions as usual. In my opinion, she is trying to cut the data in a very disingenuous way in order to bolster the appearance of accomplishment.

    But the big story may be that questions a being asked and incumbents are feeling threatened.

    That alone represents major progress for Northern Virginia.

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