Governor’s Transportation Funding Plan wins support of Businesses
By Krystle Weeks | Wednesday, December 29th, 2010 | PolicyToday, twenty-six business associations across the Commonwealth came out in support of Governor Bob McDonnell’s transportation funding plan. These associations, some representing the construction industry and six Chambers of Commerce, released a joint press release praised McDonnell’s plan saying that it can add “much needed capacity to Virginia’s transportation network, put more people to work, and improve our economy.”
The release also acknowledged how the Governor’s plan will utilize existing revenues to fund the proposed Virginia Transportation Infrastructure Bank and the use of bonds will address the transportation infrastructure needs.
The infusion of dependable, dedicated transportation funds is critical to putting Virginia’s transportation program on a sound financial footing and ensuring sustained economic growth.
Virginia Governor Bob McDonnell has proposed investing $4 billion to accelerate road, transit and rail projects in the Commonwealth over the next three years.
Fully implemented and prudently invested, the Governor’s proposals can add much needed capacity to Virginia’s transportation network, put more people to work and improve our economy.
We believe that creative use of existing revenues to capitalize the proposed Virginia Transportation Infrastructure Bank and the prudent use of bonds will help address the Commonwealth’s chronic transportation infrastructure needs.
Using bonds, in this limited manner, will allow the Commonwealth to leverage and make some of its scarce transportation resources go further. All bonds proposed will use debt allocations already authorized under current Virginia law. The bond packages will be serviced by current existing revenue streams. The use of toll credits will leverage these dollars and will free-up state revenues that will fund new projects. This is smart management and the prudent use of existing revenues.
Still, Virginia’s aging infrastructure requires at least $1 billion a year in new, recurring revenues. Governor McDonnell has stated he understands that his initiative is a short-term infusion of funds into a system that over the long-term requires new dedicated and sustainable revenues. On December 17, 2010 the Governor told the General Assembly money committees that “I’ve talked a little about bipartisan successes in economic development and budgeting; well transportation funding is a bipartisan failure.” We agree.
The Commonwealth must invest additional funds into its transportation system. We appreciate Governor McDonnell’s proposals to jump-start a number of critical transportation projects that will put many Virginians back to work as well as his ongoing commitment to secure a long-term funding solution for the Commonwealth. We look forward to continuing to work with and help him fulfill that commitment to the citizens of the Commonwealth.
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Growing up in Maryland typically does not yield a Republican. Fortunately, Krystle Weeks was one of the lucky few booted to the Commonwealth for her staunch conservative views. From an early age, she has been debating politics, and since 2006, she has been involved here in the Commonwealth helping Republican candidates to victory. Aside from politics, Krystle is a runner and a dynamite cook. You can email her here. Krystle also blogs at Crystal Clear Conservative and Charm Offensive Cooking.
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51 Responses to "Governor’s Transportation Funding Plan wins support of Businesses"
You mean construction companies like the idea of more government contracts and banks like the idea of Virginia taking more loans from them?
I’m shocked!
My experience is that when the PR machine has geared up with these types of endorsements before the business case has been made and discussed with the public, the truth is that there are many legitimate questions that need to be answered and have not been. Does the ABC debacle raise any red flags? As a proponent of improvements in transportation infrastructure, I certainly want to see more funding, but this scheme has many components that I just don’t understand. Sounds too much like FRANs to me. I hope these questions and others will be answered before this initiative goes any farther.
Mike Barrett sums up the PR campaign for light rail and slow speed rail to Norfolk quite nicely when he writes:
“My experience is that when the PR machine has geared up with these types of endorsements before the business case has been made and discussed with the public, the truth is that there are many legitimate questions that need to be answered and have not been.”
Thanks Mike!
Mike, where you been bro? This has been a hot discussion for as long as Bob has been governor. If we do not improve our roads then we better have a backup plan for when the navy says no to future naval investments in our region.
Does this sound like “buy now, pay later” or more like a Obamaistic stimulation package?
Wally, it is the beginning of a compromise that will work across party lines. Without improvements to our transportation system that suports tax positive business (employers) we will not remain competitive and no sane employer will ignore the issue when they look for where to locate.. or relocate to..
Transportation “IMPROVEMENTS” are in the eye of the beholder.
There are “needs” and there are “wants”. Both can be called “improvements”.
In difficult times we should focus on only the “needs” that offer the largest bang for the buck, not “wants” that only reward certain politically influential industries with “bucks”.
Yes James, totally concur. But perhaps you do not remember FRANs, that is, Federal Revenue Anticipation Notes, that is, a souce of borrowing with the requirement that it be paid back. That is my issue with the recent announcement, and I admit that Sean and Bob have cranked up the PR machine without a full explantion and accounting for how we will service the debt. Especially the toll anticipation segment; makes me queasy that the carrot is the mid town tunnel but the stick is a toll so high it will decimate Hampton Roads, a formula to be used for all new projects. I hope I am wrong.
Which is worse, status quo or improved xtransx with tolls? It is unfair to raise gas taxes to subsidize all roads and toll collection is much less bothersome today. Automate the process for most and the convenience will be rewarded by commerce and people movement.
FRAN’s are part of what is wrong with this country, who wants to have to depend on innovative (anticipated revenue) federal grants to get it done when the lenders are local? One problem with Fran’s is the extra layers of compliance. Lets keep more of the work for Virginians and less of the dollars for the federal moochers.
The rational solution is to raise the gas tax to at least the 1986 level adjusted for inflation, raise other user fees in similar fashion, use tolls when appropriate for no more than 30% or so of the cost, and this combination will raise enough annually so we can get out of the mess we are in. To borrow as the Governor proposes, without identifying the source of revenue to pay the debt service, is just digging the hole deeper.
“When will they ever learn, when will they ever learn” – Kingston Trio.
Somehow leverage proponents never ever seem to understand velocity theory economics and how it hampers the natural influx of increased revenue by slowing the momentum of the dollar in the government to business to households to government cycle.
The problem with incurring governmental debt is it never, never gets paid. In turn, the debt service grows at exponential proportions that reduce the effectiveness of the slowed velocity revenue income.
Setting a ring of tolls about the Hampton Roads will not only slow local commercial interests but will disproportionally burden the Hampton Roads residents in supplying revenue to the “Uncommonwealth”.
Source revenues for funding long term bonds by relying on a gas tax is also short sighted as Federal Governmental fuel consumption goals and the advent of alternate vehicular propellants is clearly visible in the near term.
In other words, “infusion”,”investment”, “sound financial footing”, and the litany of other bureaucratic wordsmith issue framing BS is shallow and unfounded. I for one realize that the Governor is making long term commitments for a shorter term tenure to further his political career at the expense of the Commonwealth.
Wally, do you have a suggested course of action that would be more effective?
Following Wally’s strategy, no one would own a home or a car unless they paid cash for it.
Britt: Yes, I think I expressed the philosophy quite clearly. But more specifically, examine the policies of the past that were in place when the Commonwealth was on a “pay as you go basis”.
For Brian: now you are a financial expert? There is no reason to leverage and finance a car. Never have, never will. I maintain a specific account of tax-free funds to which I contribute on a disciplined periodic which I draw on for vehicular needs. Yes, the interest works for me and not a finance company.
As for a home, remember is works on a declining balance. The government does not pay off bonds in that they replace them with new ones an wind up with an ever increasing balance. A residence is a necessity of life; it is not an asset that should be leveraged regardless of what your equity for life proponents may profess.
Socialism in government is becoming so acceptable by many because the propensity to save and invest for many has become the way of the dodo bird. Instead of becoming debt-free, self income reliant, and letting the magic of compounding working for the individual, the majority demand instant gratification and turn over the majority of their potential accumulated wealth to bankers and finance companies.
Wise up, young man, life is a snapshot, and like a roll of toilet paper, it rolls off faster as it gets shorter.
Wally pay as you go works, but maybe not as well after damage has been done and essentials have been neglected.
We’re facing a difficult economy and don’t have the reserves to fund our way out of it. Either you get innovative, find new revenue sources, or prioritize cuts that will balance the budget without stifling incoming revenue even further.
I wasn’t asking for a philosphy. I think we’re beyond that until things recover.
“find new revenue sources”
Britt:
Therein lies the irony!
It’s not finding “new” revenue sources; it is increasing existing revenue sources! The Governor is suggesting to alter the slope of the revenue income source at a more obtuse angle, equally proportional to the slope of debt service liabilities. When will it stop? When trend goes vertical? I contend that the burden is synergistic and effectiveness diminished.
And your specific suggestions for improvement, Wally?
Before we decide to increase taxes, fees, and tolls. Let’s decide what our NEEDS are – and what we can AFFORD, first. let us prioritize the list of “improvements” and focus on the most critical NEEDS first.
Let us agree that the object of who is targeted to pay for whatever transportation needs we select as the most critical are those people that benefit most from the “investment” of tax funds.
For example, the YES Campaign pushed 5 major highway projects and a $200M blank check for HRT to spend on unspecified “transit”.
Each project can have a different strategy for funding.
Take the “new” RT 460 highway as one example. The folks that benefit from those billions in tax funds are clearly the property owners within 1 mile or so of either side of the “new” RT 460. Property values will increase because of the taxpayer funded highway – and possibly a rail line too.
Create a special taxing district and a TIF along the RT 460 corridor. Create a “windfall profits” strategy for property owners that captures a percentage of the INCREASED value of the property along the “new” RT 460 highway. Charge the extra tax rate to the property owners along the route – to PAY BACK the taxpayers that put up the money to build the “new” highway.
Consider a special tax on the businesses that are awarded the contracts to build the new highway. Their profits from the project are derived from taxpayer’s money being “invested”. THEY benefit greatly from the new highway – yet THEY are never looked to as a source for paying for the new roads – why?
What about the Port Of Virginia? This “new” highway is largely for the benefit of the Port desiring to EXPAND its operations. Why not a TIF on the PORT’S “profits” such that the increased revenue from the PORT is dedicating to pay off the cost for the “new” highway the PORT’S truck’s need?
Who ownes the “Port”? That is the entire state, right? The profits from the PORT go to the General Fund, right? Shouldn’t the entire STATE help pay for that highway? Shouldn’t the trucking industry pay extra to pay back the cost of the “new” highway they want?
If rail is a component of this “new” RT 460 then those that USE THE RAIL should pay for the cost of the new rail infrastructure. If passenger rail is included, then FARES need to recover the cost of operations & maintenance, not another massive taxpayer subsidy.
Tolls are a reasonable solution too – the USER PAYS. The challege is in HOW WE COLLECT THE TOLLS. We don’t want to impede traffic flow, nor do we want to over burden commuters. Placing tolls on old highways that we already paid for is all the rage these days. That isn’t right either. So holding people hostage by adding a toll to a free highway or road to pay for “improvements” to some other highway or road is not something I agree with.
I do like the idea of “Congestion Pricing”, but I feel that there needs to be strict controls over raising tolls. Tolls should be a Firm Fixed Price contract. The infrastructure has a fixed price. I support referendum as a requirement for raiskng tolls.
I support Congestion Pricing that offers FREE use of the roads during the periods when the roadway is least used. THAT idea will encourage business to use the facility when it is not being used by commuters.
Large trucks cause greater damage to roads than light cars. The same for buses. Heavy venhilces should pay a higher tax to pay for road maintenance than lighter vehicles. We need to better understand the wear and tear on roadways that heavy trucks bring.
Lastly, we need to address the COST of building new roads, tunnels, and bridges. We need to consider less expensive ways to build our transportation infrastructure.
In the case of TUNNELS because of military vessels, we need to consider less expensive bridges, like the Coronado Bridge. Bridges that if they fall, they will not block the shipping channels. If bridges offer a significant cost savings, then we need to consider them. Underwater TUNNELS are very expensive.
Britt:
First and foremost, the policy issues that encompass our transportation needs have deviated from the past, where upon the determination of needs have shifted from professional analysis to political influence. Hence, the allocated dollar amounts are the political resultant directed and guided by special interest influence. More importantly, politicians and special interest have successfully framed the liabilities of failure on VDOT when in actually VDOT analysis and schedules are skewed. Tackle that, then I’ll continue. Since the Commonwealth leadership continues to search for “new” revenue and hasn’t addressed the policy issues, nothing has been changed that has caused our current debacle.
No to tolls and Yes to increased fuel taxes.
I do not see why Republicans insist on tollways as being the answer and refuse to listen to the trucking industry on this issue.
Tollways are an inefficient method of collecting the revenue because of the costs behind collecting the revenue. Tollways motivate traffic to avoid the tolls and provide unanticipated relief because the traffic that was supposed to take the new route avoids the tolls.
Just raise the fuel tax; effective and efficient. You have the entire trucking industry telling you this is the best way to go, but you with your limited experience dealing with the roadways know better, right? Just how many of our 48 contiguous states do dissenting opinions have experience traveling in?
“Just raise the fuel tax; effective and efficient.” So.. everyone pays for major road improvements that trucks pound harder on Little David? How rude.
Automated toll collection is the modern reality. Don’t want the hassle or inconvenience? Buy an EZ Pass.. https://www.ezpassva.com/
LD, why should the truckers dictate how we pay for roads that everyone drives on? I know that tolls inordinately affect truckers, but the gas tax affects everyone. Those who can avoid the tolls do, those who can afford to pay them do.
It’s a convenience tax for individuals and a business tax for trucking. Better than a gas tax that hits those who can afford it least the most.
With gas hitting $3 per gallon again, LD wants to raise gas taxes? Yea, let’s stifle the economy more!
I understand objecting to tolls on existing roadways. Tolling new road ways would change very little since they are new.
Why don’t we just raise taxes on diesel fuel and cigarettes instead? Then maybe LD will feel our pain on taxes.
I can see the issue has sufficiently framed that all are ready to throw “new” revenue at the problem rather than solve the policy issues that is the cause.
Yes, one of the policy issues that is the cause is the dependence on the automobile. Of course, suburban land use policies that encouraged sprawl are now passe’. The Commonwealth acknowledged this by refusing to fund local road building. So intelligent and forward thinking local officials are looking at redevelopment of existing property, and the use of light rail to act as both a stimulus and a convenient and efficient means of accommodating increased density. Critics of light rail in urban corridors want to howl against the wind, but no amount of howling or obstructionism will bring back old suburban land use patterns.
As much as it pains me, I agree with Mike’s last post.
Welcome to the word of government dependency, ever increasing debt, and the loss of freedom. Special interest has so framed the issue, that resolving the true problems, other than throwing more unrecoverable money at it, that determining project priorities is resultant of political favors and power rather than the truly engineered needs. Well done!
If you think things are bad now – Imagine the world the Mike Barrett’s of the world want to build!
And that is where I differ with Mike lol.. Thanks for ending my momentary stupor Ried
And what the resultant urbanization will bring is another liberal democratic strong hold with public dependency. Yes, these so called “strategic” planners will allow government to bear the risk, and what earners remain will be burdened with the escalating cost. In the long term, urban flight and gentrification is the ultimate consequence of listening and proceeding with urban planner experiments.
James,
Mike is right: if you want to keep “down in the county” rural, you have to redevelop the SGAs, with LRT connecting them.
Wrong Henry, if you want to keep down in the country rural you keep city sewer and water lines out. The limited number of drain fields that will pass muster with the dept of health will limit development.. that is why some developers want water and sewer lines down in the county. The problem we have is that without a plan to maintain the rural area open space we will wind up like Kempsville.
Back to the op.. LRT should serve the military bases and that makes the only sense.. anything short of that and it is a boondoggle in high cotton.
LRT service the Navy base? Quite an interesting service since the LRT won’t go on the Naval Base and shuttles will need to run. An interesting note, free bus rides to the Naval Base hasn’t increased ridership. That’s right. Free bus rides funded by the Federal government to military and government employees. Once a week (or month?) you can receive vouchers and turn them in to HRT for bus tickets for transit to and on the Naval base. The procedure has been in place for years, and is significantly under used. Listening to proponents yield nothing but false promises and unsubstantiated LRT La La land solutions.
Wally, the reason is most likely because of:
(1) The Military have to be at muster ON TIME – or they are UA. Intelligent and responsible military members know they cannot depend on HRT.
(2) The T-I-M-E it takes to ride HRT (or light rail with so many stops) would cause the daily commute to be FAR LONGER than the time it takes to drive.
You see, HRT isn’t concerned with offer an “alternative” that is actually FASTER, safer, and more convenient than driving.
Light rail will go to the Naval Base if we continue to add to the starter system set to open on May 1st. Then, the connection to the Beach can get done, and the third phase is to connect to the Naval Base. It needs to come to the Beach to connect residences to the naval base. All along, this will be most successful as a regional system, coordinated with connecting bus service, bikeways, pathways, and in the case of Norfolk/Portsmouth, ferries and then to passenger rail to Richmond and the Amtrak system, and to the airport.
Mike, it won’t be an economic success until and unless it serves the needs of the military first and foremost. The residents get the benefit if it serves the prime target audience and it HAS to be designed to meet the military community first.. This should all be subbed out to private industry.. if they won’t bite then neither should we.. just my not so humble opinion..
Actually, economic success will be determined by the increased value of property that is developed around the light rail stations, and by that measure, Norfolk has claimed some $900 M in Transit oriented developenmt completed and/or on the drawing boards, with more to come. The national measure is an average of 8 times more in real private estate development than is spent to build the light rail If the Norfolk system ends up costing $330M, you can expect $2.240 B in TOD in Norfolk and eventually at the Beach as well. Operationally, the military service is important, but the fiscal success will be det ermined by other factors as well.
Let me wade through the arguments.
When the tollway goes in, the trucks will be barred from the old way because the citizens on the old way will demand all the truck traffic shift to the new way. It happens again and again and again nationwide and why is Virginia going to be different?
I already have EZPass. Look what happened in New Jersey when they raised tolls but with less of an increase for EZPass users, they were so successful in getting travelers to switch to EZPass they didn’t raise enough additional revenue so they had to go back to the trough.
Everything you have in your house, everything you put into your mouth in one way or another is affected by the costs of trucks bringing it to you. I won’t feel the cost as a truck driver without passing the costs on and the businesses I serve and ultimately the consumer pays in the long run.
You are the consumer or the businessman and it is your choice; you’ll end up paying in the end. What you purchase at the checkout line goes up or what you sell at the same line goes up and is less competitive. I’ll pass on the costs and if my competitors do not they will not be in business long and then I will benefit from the reduced competition.
I guess that is what our economy needs, lets increase the costs of what we produce so it is less competitive. Makes sense to me, sure it does.
Instead of engaging in wild speculation (like Reid does), you could ask those at Naval Station Norfolk why more don’t take the bus to work (like HRT has):
1. If they need to leave for a family emergency during the day (such as a sick child at school), there’s no bus out.
2. If they miss the bus, they’re stuck.
Neither problem would exist with LRT.
LD that makes a lot of sense. I’m glad you’re grasping the idea that business doesn’t really pay taxes, they pass it on. I’d say you’re onyour way to being a fiscal conservative!
But raising fuel taxes on everyone and shifting the cost burden there (which would also put upward price pressure on goods & services) does not make sense. For similar reason in addition to robbing demand in an era of lackluster consumption.
What happens if overhead demand goes up, but compensating price increases are impossible because nobody is spending? We’re looking at potential for serious trouble. Your scenario is just as unacceptable. I am a free market Libertarian kinda guy after all.
Another issue is that expanding crossing capacity places higher demand on destination road ways. Bottlenecks can defeat much of the purpose before and after crossing.
Henry:
The LRT is not going ON the base. You know how far the carrier piers are from the gate? Are you saying there are going to be shuttles to match the LRT schedule? Let’s get real here!
Unlike Mr. Ryto, I served in the Navy – at NOB, while living in VA Beach. There is no “wild speculation” on my part. I speak from actual experience.
Wally,
Remember that LRT will run every 15 minutes during the day, every 7.5 minutes peak.
HRT is already adjusting the mainline bus schedules to meet the Starter Line trains.
Wally once again ignores the plea of the Navy/DoD for us to resolve our transportation crisis or they will solve it for us. On the program I have referenced herein about the presentation by the Planning Director of Charlotte to the ULI, HR, one of the panelists was a staff officer from the Naval Mid Atlantic Command and she was adamant that light rail could be part of the solution to our mobility crisis. Once the Beach extension is up and running, the plan is for the Naval Base extension to be next. About time.
Even when Mike Barrett writes a letter to the editor saying light rail won’t reduce congestion?
Yes Brian, I do not beleive it will reduce congestion because normal growth will increase the use of roads, highways, and bridges. To suggest that light rail in one corridor, no matter how successful, will counter our absolute failure to keep up with our highway needs would be simply a lie. That said, for those who will choose to use light rail in this corridor, it will provide an alternative and reliable way to get to work, to school, to shop, and to attend cultural and sporting events. Will it take cars off the road? Sure, but will it reduce congestion, I don’t really think so.
Again, accuracy is lacking in proponent statements. There have been no official DOD correspondence that endorse the light rail project. Broad brush individual Commanders statements have been construed and spun; however, one must assess those are individual opinions and not considered an Official DOD or U.S. Navy policy statement.
Henry, are you saying that HRT will provide a shuttle service that coincide with the every LRT event? And golly gee, what about those on 2nd (night)and third (mid) watch?
Now is there flopping from congestion relief to convenience and choice back to congestion?
In all due respect Wally, I attended the event and I heard what the Navy representative said. I have also heard directly in conversation from one of the highest ranking Navy Admirals in this area who has stressed the Navy’s concern about personnel readiness due to congestion on our highways. I don’t think you do your cause any help by denying the obvious; that is, a decade of neglect has caused severe deterioration of our roads, highways, bridges and tunnels, and we must solve this dilemma or fall back into the parochialism of the past.
Wally,
HRT’s Planning Department has made clear that what buses that are scheduled will have as their top scheduling priority meeting the trains.
How many military members report to bases in our region and how many people can the tiny, low capacity light rail system transport ON TIME every morning?
Answer? Nowhere near the numbers of people that need to report on time, for muster. Light rail is the wrong solution for this problem.
The topic of the military leaving the region because we don’t have light rail is a “Light Rail Now” Talking Point that is not only false, it is laughable.
I know a few Admirals too. I recall how the dishonest YES Campaign attempted to make false claims about the navy endorsing the Yes Campaign’s position on the 2002 Referendum. They ran ads on TV with two RETIRED Admirals claiming to speak on behalf of the Navy.
A book was distributed by the Hampton Roads partnership with a misleading letter from Rear Admiral David Achitzel and its was marketing by the YES Campaign as endorsing the Yes Campaign’s position on the 2002 Referendum regarding raising the region’s sales tax for 6 projects on behalf of the Navy.
I asked Rear Admiral Achitzel if the Navy was officially endorsing a YES vote on the referendum. He told me “No”, and that he was not authorized to make such an endorsement.
He did write a letter addressed to “Dear Delegate” at the request of the YES Campaign. The letter was dated 25 Feb 2002 on official Department of the Navy, Commander Navy Region Mid-Atlantic region letterhead that stated “As the representative of the military component of the Hampton Roads Community, I ask that you give close consideration to the needs of all of the Hampton Roads communities and lend your support to this bill”. He meant SB 668.
However, when I pressed him on this and showed him the letter, he admitted that he wasn’t permitted to speak for the Navy on the referendum matter and that he was simply communicating his own personal views.
He pointed to the part of the letter that read, “I wanted to take this opportunity to communicate my support for the bill”.
Since the letter was written in 2002, the Navy has been involved in fighting the “Global War On Terror”, largely in the Middle East – and none of the 6 projects have been constructed. The Navy’s readiness was not adversely impacted, nor has there been a mass death from any of the many major storms our region has had since 2002, due to an inability to evacuate.
Laugh all you want, just as you celebrated at the defeat of the Yes Campaign. Problem is, we have severe deficiencies in our transportation network, recognized by our citizens, our businesses, our economic developers, our elected leaders, even our Governor. The need is not in question, except by those who refuse to acknowledge the truth. The issue has always been who pays, and the failure to agree on that means our system continues to deteriorate and fail, which in the long run, benefits no one.
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