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SoVaNow.com / January 17, 2013Up in Richmond, Gov. Bob McDonnell has put together an interesting proposal to pull Virginia out of a transportation financing rut that, left unfixed, will bring road building statewide to a halt in a few short years. McDonnell’s transit package has a lot of moving parts, but the major takeaway is to get rid of Virginia’s 17.5 cents-per-gallon gas tax and make up for the loss of revenue (and then some) with an increase in the sales tax from 5 percent to 5.8 percent.
It has been a little difficult for anyone to get their heads around McDonnell’s plan, because it sounds sorta-kinda like a tax cut but really isn’t. The plan is estimated to generate about $3 billion over the next five years, although questions abound as to how solid some of McDonnell’s less noticed nickel-and-dime ideas (Internet sales tax anyone?) will turn out to be. One thing’s for certain, the money has to come from somewhere, and the governor’s previous preferred method for squeezing bucks out of bumper-to-bumper traffic — tolling — has become about as popular as the U.S. Congress or the flu, take your pick. Which is to say, not very popular at all.
Which leaves the governor, and the General Assembly, in a bind.
The fallback position at the Capital on transportation for a very, very long time has been to do nothing. The last time Virginia raised the gas tax was 1986, back when Jerry Baliles was governor. (Remember him?) As a result of this inactivity, the Old Dominion now has one of the lowest gas taxes in the nation. It also has a road-building program that dips into the maintenance fund just to stay afloat, and soon will run out of cash altogether. Yet if the governor has his way, Virginia would become the only state in the nation to have no gas tax at all.
This may sound great — in the same way that Jim Gilmore’s no-car-tax pledge sounded hunky-dory at the time — but it creates a lot of perverse effects. Here’s just one: whenever out-of-state motorists pull over in Virginia to fill up, they help to pay for our roads. Sweet! This windfall pretty much vanishes under McDonnell’s plan. On the other hand, the gas tax is indisputably failing to keep pace with the rising cost of road-building. And vehicles engineered to use less gas will only make the problem worse. (Never fear: McDonnell’s plan includes a $100 surcharge on fuel-efficient hybrid vehicles. Talk about weird incentives in this warming world of ours). It would be a stretch to argue that the gas tax is irrelevant to ensuring the future of Virginia’s transportation network, but clearly it is inadequate to the task unless the tax is raised sharply.
Which brings us to the point: if Virginia can no longer afford to stand pat, and if the legislature won’t touch the gas tax (and it won’t), the only alternative left is to resort to what in politics is known as the “art of the possible.” And never mind if the artwork in question looks like something Jackson Pollack might have splashed on a canvas at the same time he was progressing towards the world’s worst hangover.
So: the business-oriented conservatives who write the Wall Street Journal editorial page detest the McDonnell plan, but the Virginia Chamber of Commerce is gung-ho for it. Republicans in the General Assembly are lining behind the governor for the most part, but the Tea Party and Grover Norquist are crying foul over higher taxes. Some Democrats have announced their opposition, but most seem to be stuck in the headlights. It’s not hard to understand why. The McDonnell plan may be terrible policy, but it’s clever politics, and it might be the best solution, however convoluted, that anyone has the right to expect.
Paul Goldman, a longtime Democratic political operative, has been making exactly this point in pieces he’s penned for a prominent liberal blog, Blue Virginia (http://www.bluevirginia.us). Goldman, a top advisor to another former Virginia governor, Doug Wilder (he was to Doug Wilder as Karl Rove is to George W. Bush) has urged Democrats to take McDonnell’s deal, with modifications. The biggest is a demand that the governor drop plans to divert sales tax revenue from education to transportation. This has been a core position among Democrats in any event, so it’s not like Goldman is asking the party to bend itself out of shape to do business with the governor. From such a starting point, one can see a route to negotiations, even if the contours of an eventual deal are fuzzy.
The irony here is that all sides are going through contortions that might not yield much at the end of the day. The governor’s plan should stop the bleeding in the transportation budget, but it almost surely won’t be enough to finance road and transit improvements on a scale necessary to fix traffic congestion in northern Virginia and Tidewater, scene of the most acute problems. (This is especially true if Virginia continues to waste scarce dollars on boondoggle projects like the U.S. 460 toll road between Suffolk and Petersburg, which even Wile E. Coyote would dismiss as impractical). By severing the link between usage and taxation — the gas tax is, after, the most straightforward user fee imaginable — the governor’s plan might end up contributing further to the problem of sprawl, which is a large part of the reason we have so many problems with transportation to begin with. As for the chances Southside Virginia will realize direct benefits from the extra sales taxes its citizens would end up paying, fuggetabout it. Greater needs lie elsewhere.
So I dunno. It’s long been our view that Virginia needs to do something to kick-start improvements to a transportation system that has gotten downright wretched. One always hopes for the optimal solution — and sorry to be the one to say it, but this implies higher gas taxes — even if one is ready to accept semi-lousy substitutes. The governor is, at the moment, the only player in town who is proposing an answer, however inadequate or ill-advised on certain points. You can’t beat something with nothing, right? At the General Assembly, where doing nothing is what everyone does best, the wisdom of that old saying is about to be put to the test.