Saturday, February 18, 2006

The Worst of All Conceivable Solutions

After studying transportation for more than a year, Virginia’s state Senate has passed one of the most atrocious pieces of legislation in recent history. The Senate transportation package, which passed 34 to 6 yesterday, did not have one redeeming virtue. Not one. It’s a transportation plan utterly so devoid of merit that only Virginia’s editorial writers could love it.

Let’s grant the Senate the charitable assumption that the solution to solving Virginia’s broken transportation system is to indiscriminately pour more money into it. Even by that standard, the legislation is a loser. According to Virginia Department of Transportation figures – the same figures used to justify a tax increase – the state will need $108 billion in new revenue to pursue a Business As Usual transportation policy over the next 20 years. That averages out to $5.4 billion yearly. By providing less than one-fifth that amount, the legislation falls far short. The Senate proposes no other solution for covering that gap.

But that’s only the first of the legislation’s many failings. The logical way to raise revenue would be to raise the retail gasoline tax, on the grounds that raising the cost of driving would have the salutary effect of encouraging people to drive less and reduce the stress on state roads. Instead, the Senate proposes collecting $210 million by increasing the tax on real estate transactions. Why the Senate chose not to raise taxes on, say, hair stylists or the sale of cucumbers as well, I can’t begin to imagine. The Senate also would raise the motor vehicle sales tax by three quarters of a percent, which would achieve the remarkable result of increasing the cost of car ownership without encouraging anyone to drive less!

Throw in a $10 registration fee and a tiny increase on the sale of diesel fuels, and there you have it. Oh, I nearly forgot the most ludicrous proposal of all: Raising $570 million a year by imposing a 5-percent wholesale tax on gasoline. Virginia’s esteemed Senators must think voters must be pretty stupid to see that as any less onerous than a tax on retail sales. But just in case motorists do see through the subterfuge, the Senate decided to “soften the blow,” in the words of Jeff Schapiro in the Richmond Times-Dispatch, by allowing them to file their gasoline receipts twice a year for a rebate.

Here’s a piece of unsolicited advice to the genius who came up with that idea: Those who think it's too much trouble to file -- half of all Virginians, according to your estimates -- will curse you. Even those who do file their receipts will curse you -- twice a year -- for putting them through that nonsense in the first place!

But the thorough-going abdication of common sense does not stop there. Unless it plans to introduce companion legislation not mentioned in the press accounts, the Senate does absolutely nothing to address the transportation-land use connection. Gov. Timothy Kaine has advanced a proposal. So has the House. But the Senate has nothing to say on the subject.

Neither does the Senate consider any of the many alternative transportation strategies that have been articulated: telework, traffic-demand management, traffic-light synchronization, Bus Rapid Transit and many, many more. The philosophy of the Senate can be summarized thusly: Don’t reform land use. Don’t change VDOT. Don’t try anything new. Don't change anything about transportation policy except the amount of money dumped into it. Tax, tax, pave, pave. Even the Road Builders lobby would be embarrassed to advance a legislative agenda so backward!

The Senate package is, arguably, the most reactionary legislation to come down the pike since the days of Massive Resistance. Indeed, massive resistance – as in, resistance to change – is an apt description of what the Senate has wrought. If Virginia voters had any sense, they would vote 34 senators out of office in two years -- if they didn't laugh them out first.

(Note to readers: I have deleted the concluding paragraph of this post on the grounds that it did not meet the editorial standards of the Road to Ruin blog. In my zeal, I resorted to name calling of those who disagreed with me. Insults, even if obviously hyperbolic, are not arguments; they only diminish from arguments. I apologize to anyone who took offense.)

4 Comments:

At 12:11 PM, Anonymous sdh4vbt said...

1) The purpose of the taxing the wholesale value of gasoline is to capture future price hikes -- something a flat cents per gallon does not do. It is also possible -- and Senator Saslaw believes this based on his own time in that business -- that the oil companies will cut their wholesale costs in Virginia and in effect absorb some of that. It may or may not all show up at the pump.

2) The refund gimmick is just that but it helped get the vote up to 34-6. If they are serious a refundable credit on your annual income tax return is the better and easier way to go.


3) The Senate has several pieces of legislation related to land use and VDOT reform and is likely to approve just about all of the measures coming over from the House. Your refusal to acknowledge this is starting to border on intentional disinformation.

4) Are you really attacking this because it isn't big enough? You want more taxes?

5) The Senate plan makes much greater investments than the House in local revenue sharing, rail funding, mass transit funding -- all things which are not "business as usual." The House is almost all roads.

6) I just drove up and back to Tysons last week and the amount of construction I saw was impressive and cleary demonstrated the link between real estate and transportation. Why not tax that? The House is using proffers, the Senate a recordation tax and I swear I can't see any real difference.

Debating this is losing its joy. You aren't making much sense.

 
At 10:36 PM, Blogger Toomanytaxes said...

Quite a few years ago, I attended a class at the American Management Association. One of things I remember from the seminar was the saying: "If you keep on doing what you've been doing, you'll keep on getting what you've been getting." It has always stuck with me, & I've often found it to be true.

 
At 5:51 AM, Blogger Larry Gross said...

I'm convinced of two things:

1. - Elected officials by the very nature of the word "elected" usually when faced with the twin prospects of being "courageous" and running for re-election usually understand the bottom line quite clearly.

The game is to doing something you can take credit for while at the same time not excessively angering major constituencies.

This concept may "suck" in some folks eyes but apparently our forefathers saw some merit in it and our country uses every opportunity to tell the rest of the world that this is the "right" way for governments to operate.

2. - It's pretty clear to most folks that the amount of money required to actually build everything listed as a project is so far into the ozone that virtually no one believes that there is anything beyond nibbling at the edges that is workable.

Legislators do best when someone can show them that more money or more laws can fix something and it appears to me that neither of these two propositions show a clear path to solutions.

In other words, despite all the ideas put on the table by all parties - I don't see general agreement that a particular legislative package will actually achieve a desired result.

It's not like other states have figured this out and Virginia is clueless either.

The transportation world was fine as long as the gas tax produced sufficient funds to pay for infrastructure. Once that was no longer true, it essentially created a vacuum in terms of vision and direction.

I think the proof of this is that I haven't heard a single person or group state with certain conviction that it's clear to them that a particular legislative path is the "right" way to fix the problem.

Instead, we have no shortage of folks pointing out why what's on the table will not fix the problem - then they stop short of saying what obviously should come next, which is - " Clearly, we must do the following......"

 
At 9:01 AM, Blogger Jim Bacon said...

So much to respond to...

First, Steve (sdh4vbt) said: "The Senate has several pieces of legislation related to land use and VDOT reform and is likely to approve just about all of the measures coming over from the House. Your refusal to acknowledge this is starting to border on intentional disinformation."

I am delighted to hear that the Senate is considering land use legislation. We can debate the merits of that legislation at another time. However, I have not "refused to acknowledge" it, and I certainly have not engaged in "international disinformation."

I have stated on many occasions that I do not frequent the General Assembly and I do not know everything that goes on there. In this case, I was captive to my sources, articles in the Richmond Times-Dispatch and the Washington Post, which wrote about the Senate's funding package without alluding to the existence of land-use legislation. Indeed, I specifically added this caveat in my account: "Unless it plans to introduce companion legislation not mentioned in the press accounts, the Senate...."

Trust me, when the Senate passes that legislation, Steve, I will be delighted to highlight it and comment upon it... assuming, of course, that the MSM feeds me something to work with.

Second point... Steve raises a semi-valid point regarding the decision to add a sales tax on the wholesale price of gasoline rather than a per-gallon tax at the retail level. "The purpose of the taxing the wholesale value of gasoline is to capture future price hikes -- something a flat cents per gallon does not do."

That, at least, is logical... within limits. The Senate is betting that, over time, the price of gasoline will go up and that a sales tax will capture more revenue than a per-gallon tax.

Of course, that logic also violates one of the dictums we've heard repeated over and over, that the Senate wants a stable, predictable, long-term funding source. In that regard, this measure is totally self defeating. The total number of gallons consumed in the state of Virginia may vary three to four percent year after year. The price of gasoline, by contrast, as we've seen in the past year, can fluctuate 50 percent or more. What the Senate proposes, then, is to increase VDOT's dependence upon a highly variable source of revenue, subject to external events from hurricanes to terrorist strikes in foreign countries.

Congratulations, guys. Good thinking!

Third point.... Steve says: "The Senate plan makes much greater investments than the House in local revenue sharing, rail funding, mass transit funding -- all things which are not 'business as usual.' The House is almost all roads."

I beg to differ over the definition of what constitutes "Business as Usual." I definie Business As Usual as thinking that Virginia can build its way out of traffic congestion without making fundamental changes to land use, the implementation of alternate strategies and the ranking of funding priorities on a Return on Investment basis.

If the Senate's idea of a bold break with the past is to shift billions of dollars in wasteful road construction into wasteful rail construction, I'm not impressed.

As for the House legislative package, yes, you are correct, the emphasis is on roads. The House plan suffers from many of the same deficiencies as the Senate plan! When I praised that plan in my recent column, I noted my extensive reservations. But the House plan at least breaks from the failed policies of the past in important ways. Members of the House show signs of trying to re-think transportation policy in fundamental ways. I still see no evidence that the Senate has done so.

Perhaps I will be pleasantly surprised when the Senate passes its land use package.

 

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