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We
have quietly passed a landmark in the debate over
transportation funding in Virginia.
The issue is no longer additional
money for highway construction. Now we have to worry
about having any money for highway construction.
Over
the next six years, $407 million of the
transportation revenue specifically promised to
expand our roads, ports, airports and transit
systems will instead be spent on operations and
maintenance. That painful fact was contained in a
report given to the Commonwealth Transportation
Board on June 18.
The
situation gets worse over time. Another analysis
provided by the House Appropriations Committee in
May concluded that because maintenance costs are
outstripping revenue, in a decade or less Virginia
would lack the money to match all available federal
funds. Some of the federal dollars are likely to go
elsewhere -- perhaps to a state that actually wants
jobs and prosperity without massive gridlock.
That
particular economic train wreck may be a decade
away, but in the transportation arena, ten years
goes by quicker than you think. It often takes a
decade to plan and build a project. To companies
looking at Virginia for relocation or expansion, ten
years might as well be next month if they see us
sitting on our hands. They will go elsewhere.
The
political and media spotlight has gone elsewhere, of
course. Eight months after the defeat of two
regional transportation referendum issues, and weeks
after the primary election defeat of the sponsor of
one of those bills, the political establishment
doesn't want to talk about transportation. Instead,
we appear to be gearing up for a General Assembly
election focused on raising new revenue for
education. It polls better.
But
the Virginia Chamber and its transportation
coalition, the Commonwealth Transportation
Alliance
can't afford to just drop it and move on. Election
years are such a wonderful opportunity to focus
everyone (including voters) on problems they would
rather ignore.
Maintenance
costs were the trigger the last time the
Commonwealth addressed transportation at a 1986
Special Session. They were rising steadily in an era
of serious inflation, transportation revenue was
stagnant, and fewer and fewer dollars went to
actually building anything. There was bipartisan
agreement that something needed to be done and,
after some spirited debate on the details,
bipartisan agreement on the final compromise.
The
result was creation of the Transportation Trust
Fund. The motor fuels tax was increased a modest 2.5
cents, to 17.5 cents. The sales tax went up a half
percent and the vehicle titles tax rose one percent.
The Transportation Trust Fund was then further
divided into pots of money for roads, airports,
ports and transit.
The
revenue that existed before the 1986 Special
Session, mainly the 15 cents motor fuels tax,
license fees and two percent title tax, became the
Highway Maintenance and Operating Fund. Until very
recently, those sources were sufficient to cover
VDOT maintenance and operations with millions left
over to transfer to the Transportation Trust Fund
for expansion.
Many
complained in 1986 that the tax increases were
insufficient. Others complained it was wrong to use
the sales tax for transportation. In truth, the deal
worked extremely well for years and helped Virginia
thrive well into the 1990s. Nobody lost an election
because they voted for it. Seventeen years is a
great run for any political compromise.
Now
the flow of money has reversed. Revenues dedicated
to the Transportation Trust Fund are being spent on
maintenance. Mass transit, rail, airports and the
ports are also suffering because maintenance costs
are draining the Transportation Trust Fund.
A
stronger economy won't solve this problem. When the
economy rebounds, growth will provide the state with
additional income and sales tax dollars. Increased
sales tax revenue and improved auto sales will help
the transportation trust fund a bit. But the basic
revenue for transportation maintenance and
operations -- the motor fuels tax -- is less
responsive to economic growth because the source is
tied to gasoline consumption and is immune to
inflation.
Seventeen
years of even modest inflation have reduced the real
cost of the fuels tax dollars paid by people and
companies. Seventeen years of inflation have eroded
the buying power of the money that is collected.
Sen.
Kevin Miller, R-Harrisonburg, recently noted that
motor fuels tax collections per registered vehicle
actually declined from 1988 to 2002, from $123 to
$120, without
adjusting for inflation, mainly because of
increased fuel efficiency. The decline is dramatic
once adjusted for inflation, from $123 to $78.
That simple statistic says it all.
The
funding structure created in 1986 is still sound.
The motor fuels tax is one of the fairest user fees
on the books. It also probably the only user fee the
General Assembly hasn't raised in the past two
years. Adjust it for 17 years of inflation and the
state really isn't investing more in transportation
-- we've just gotten back to where we were in 1987.
We
also have to restore the meaning of the word
"trust" in the Transportation Trust Fund.
That's another column.
--
June
30, 2003
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