A late entry into the transportation funding debate

The Thomas Jefferson Institute has offered what it calls a “friendly amendment” to the Governor’s transportation plan. In brief, the plan would focus on maintenance and leave it to the next governor to decide how to address construction and transit funding. The specifics of the TJI plan:

First, it raises the gas tax at the rate of inflation (using an inflation rate of 2.5% a year) after raising the current gas tax of 17.5 cents by a full 20% — or 3.5 cents – the first year. Under this plan in five years the gas tax would be 23.19 cents per gallon, or an increase of 5.69 cents. That will raise an additional $284.5 million a year based on each penny of gas tax producing $50 million in revenue.

Which is a tax increase, to be offset with a rather novel, if long overdue, solution:

Second, this tax increase would be “offset” by indexing to inflation the current state income tax brackets. The income ceiling for the tax brackets would increase each year by the same inflation factor as the gas tax will increase (2.5%). The income tax brackets would be adjusted so that “revenue neutrality” is achieved to the increase in the gas tax. The economic modeling results below take this into consideration.

There’s ample room to quibble over tinkering with the income tax to offset increases in the gas tax. But it’s still an interesting approach. TJI says it will be revenue neutral.

Further, the group accepts the Governor’s proposal to increase the amount of sales tax revenue devoted to transportation. They get into the weeds, though, with this part of the proposal:

Re-pass the last major transportation law from 2007 (HB 3202) to conform to the Supreme Court’s ruling.

Localities should be given more leeway in funding transportation. The Supreme Court ruled that unelected government bodies cannot raise taxes. The original HB 3202 law (a bill crafted with the leadership of then-Attorney General Bob McDonnell) gave the authority to raise various fees and taxes to the local elected governing bodies – the Boards of Supervisors, City Councils, etc. Governor Kaine changed this legislation and the Supreme Court struck down that change.

There’s plenty of argument to be made that local governments should have more responsibility for and control over local roads. They would need revenue to do so. My understanding is that the regional authorities portion of the existing transportation bill will receive particular attention from the House-Senate conference committee.

But this part of the plan is problematic in that it’s largely opaque, and is based on a plan that was tossed over the side by the Supreme Court, Nevermind who did what to the funding formula — the terms “HB 3202” and “regional authorities” are dog whistles that will bring opponents out of the woodwork.

And there’s also this bit:

Virginia should ask to be a test case where federal transportation construction monies are sent directly to state without federal strings attached. If construction projects can be completed more quickly and more economically with these block grants, then Virginia will prove that the entire federal transportation construction program could become a block grant to the states. Should this idea work it would be the same as having 30-40% additional federal transportation funds available without raising additional taxes. This would be a huge benefit to our state and its economic future.

It’s not quite as far-fetched as the internet sales tax monies the existing plan relies upon, but it still requires Congress to do something innovative. That’s a sucker bet.

This isn’t a sweeping plan, and does not pretend to be. It does contain some interesting ideas for addressing road maintenance, but leaves it to the next governor to do the heavy, and very expensive, lifting on construction and transit.

It’s safe to say Senate Democrats will dismiss it out of hand because it is limited in scope and does not raise the magical $1 billion per year they want.

A conference committee, though, may be able to use parts of this proposal to help craft a larger deal.

  • Mike Barrett

    Yes, you are correct; this plan is just about as tepit as the Governor’s. Why can’t republicans grasp the magnitute of the calamity on transportation they have created by 20 years of blissful ignorance to the realities of the wear and tear on transportation infrastructure.
    The answer of course is they can’t stand to acutally admit the failure of their ideology. Frankly, no tax republicanism has been a disaster for the nation and the Commonwealth. Sure, they would prefer to have a political escape clause, a get out of jail card, but the truth is, they caused their own critics, and they need to pay with their politicial futures.
    Fact is, we the citizens, us, our children, and our grand children will pay for their gross incompetence, and we will be paying for decades because of the depth of the decay these politicials have create. Even today, they refuse to level with us about the unfunded depreciation that now infects our roads, bridges, tunnel, and interstates. Just a few weaks ago, some on Bearing Drift implied we don’t really have a problem.
    Well, farytales don’t cut in anymore, and wishful thinking by the Thomas Jefferson Institute will not cut it either. NoVa has the worst congesion in the nation; Hampton Roads in not far behind. Republican denial is clear for all to see. Now, we must do something about it, and republicans must pay for their abject failure to govern.

    • “They” have created? I seem to recall the fact that we’ve only controlled the General Assembly since 2000, and we’ve had multiple Democratic Governors in that same time period. The blame goes both ways, Mike.

      • Mike Barrett

        Brian, please don’t insult me nor you with that statement. You know that Bill Howell and the no tax republicans have controlled the appropriations in the General Assembly for over 2 decades. He and they own this problem and have owned it since they decided on the policy of now new taxes. Frankly, they still own it today and that will not change until they leave office.

        • Uh, unless 2013-2000 = 20, you’re wrong. We did not have a majority until 2000. The Speaker assumed the office in 2003. That would be 10 years, not 20. The fact that we may have had influence over the appropriations process doesn’t mean it was the Republican party alone who was controlling things. Like I said, the blame goes both ways.

          • Mike Barrett

            There are some who would blame all our transportation problems on the Governor, and I have been one of them. However, the real foundation of our failure to sustain our transportation infrastructure rests squarely on the shoulders of Bill Howell, the Speaker of the House, and his no tax republican caucus. It had been their intrasigence that has caused a system that worked quite well 20 years ago to have crumbled and failed due to starvation.

            And nothing has changed that would suggest this will over soon. Republicans have won this battle to destroy our infrastructure through denial of the facts and the politicl favors that come from those who deny the need for taxes.

            There, I said it. Yes, a society needs taxes to survive. Without taxes, our community begins to decay. With this decay somes denial from those in power at the need for taxes, for as long as they can keep denying the truth, they say in power, they collect their pensions, they make up absurd reasons to explain why we don’t need resources to fix our roads, and some citizens want to believe, so they do.

            Ignorance is a powerful weapon. The ignorance displayed by our no tax republican caucus is astounding in and of itself, but worse, citizens and voters are taken it by this everyday. The suppression of the facts about the need for funding for improved roads happens because republicans are simply too scared to admit the truth.

            Republicans have decided to refuse to live in an evidence based world. We pay the price

          • Are we not trying to pass a tax plan right now that ATR has said is not revenue neutral? Come on, Mike. You want to complain about us not living in the real world, take some of your own advice. The the blinders off.

          • Mike Barrett

            No Brian, you and the Governor are not trying to pass a transportation plan that comes close to what is required. The plan is too tepid, not absurd, too complicated, and too dependent upon revenue from a federal source that has not been proposed, adopted, nor passed. If you want to signal your true intentions, propose revenue that is based upon a figmant of your imagination.
            The real world in terms of transportation in Virginia is crumbling, decaying, and deteriorating at such a rapid rate that civil engineers fear for our safety. That is reality as you and the Governor breen around with your tepid proposals that mock aggressive executive action.
            Republicans have boasted just months ago that we han sufficient money to finance transportation; now, you own governor has given credence to the fact that we are in crisis. Fact is, we have been in crisis for a decade, and with NoVo the most congestion region in the nation, and Hampton Roads not far behind, you and the Governor cannot deny the crisis any longer. Real solutions are required, and tepidness will not do.

          • Mike Barrett

            When Vince Wilkins and the repubicans took over in the early 2000s. the transportation infrastructure system was showing signs of stress, as noted by the Virginia Champer of Commerce and regional chambers as well. But when Howell replace Wilkins, and the republican no tax caucus too over, no funding increase took place to this day. To wait for 26 years for improvent is too long and the denial too loud.

        • pinecone321

          I thought it was all Bush’s fault!

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