Christina Nuckols at the Virginian-Pilot has described the role of business lobbies — in particular, groups representing Realtors, insurance companies, gasoline retailers and the auto dealers — in defeating General Assembly efforts to raise taxes for transportation. All of these groups felt threatened by one plan or another to stick them with the tab for higher transportation spending.
As Nuckols sums up the situation: “Every new idea that emerged for financing roads mobilized a new business group that felt it was being targeted.”
Kudos to Nuckols for digging deeper than the Axis of Taxes spin on the special section, parroted by so many in the Mainstream Media, that blamed obstructionist ideologues in the House of Delegates for the failure to reach an agreement. If only she had taken her inquiry one step further to observe that the Axis of Taxes legislative strategy was fundamentally flawed from the beginning.
The problem with the tax-raising schemes is that none of them established a rational nexus between those being taxed and those who would benefit from the construction of new roads and rail projects. Of course, those who were targeted for taxes were going to lobby as if their lives depended upon it.
Virginia’s transportation system clearly needs more revenue. The trouble is, lawmakers steadfastly refuse, for fear of alienating voters, to raise the gasoline tax. I can conclude only that Gov. Timothy M. Kaine and others in the Axis of Taxes made a political calculation that it would be easier to raise $1 billion through a mish-mash of narrowly targeted taxes than through a tax that established a direct connection between miles driven and taxes paid. I have greater faith in the voters: I think they would be willing to raise taxes on themselves as long as they were assured the funds weren’t going to be spent on politically driven projects that benefited mainly road builders, land speculators and politicians.
I believe that voters could be persuaded to support the following:
- Maintenance. Peg the gasoline tax to the cost of maintaining the state road network. If costs go higher, as many fear it will, the tax goes higher. If efficient VDOT management or devolution to localities can constrain the rise in maintenance costs, then taxes will stay stable. In either case, voters can understand — and accept — the connection between what they’re paying and what they’re getting. (Eventually, the gasoline tax should give way to a Vehicle Miles Driven tax, adjusted for the weight of the vehicle.)
- Congestion Mitigation. Use congestion pricing to address the issue of road “scarcity” during periods of peak demand. Promise voters that congestion revenues will be plowed back into congestion-mitigation investments in the same transportation corridor/district.
- Economic development. Use the General Fund to pay for economic development projects like U.S. 460, the Coalfield Expressway, U.S. 58, Interstate 73. Because such projects constitute an inter-regional transfer of wealth, they should compete with other priorities in the political bargaining process — not put on transportation funding auto pilot. Tap the state’s AAA bond rating to issue long-term bonds as necessary.
(Hat tip to Tom McCormick for pointing me to the Nuckols article.)
Update: It’s noteworthy that the Daily Press also has editorialized in favor of the gas tax. But there’s a world of difference between the DP‘s thinking and mine. To the DP, higher gas taxes are the quickest, easiest way to raise large amounts of revenue in order to Build More Stuff. To my way of thinking, a gas tax (to be supplanted eventually by a Vehicle Miles Driven tax) is critical to establishing a rational nexus between payers of the tax and beneficiaries of transportation improvements — a nexus that changes the economic calculation of driving and incentivizes motorists to curtail demand. Additionally, while raising more money (to Build More Stuff) is an end in itself to the Axis of Taxes, it is, to my mind, only one of many fundamental changes we must make.