Kaine Defends His Record on Transportation/Land Use

Jun 14, 2008

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An interesting sidelight of Gov. Timothy M. Kaine’s press release announcing the Sub-Cabinet on Community Investment is a defense of his track record on transportation and land use issues. I have broken out that passage from my previous post in order to give it more emphasis here.

Over the last two years, the press release stated, Kaine has worked with the General Assembly to improve coordination between land use and transportation planning, including:

A standardized process for traffic impact analyses for new developments
Stricter connectivity standards for subdivision streets
Improved traffic flow through access management standards
Designation of urban development areas
Expanded ability to issue road impact fees
Local administration of construction projects

Some of these initiatives originated from Kaine’s policy shop, and some of them from the Republicans. Regardless of whose ideas they originally were, Kaine embraced them at some point and was instrumental in passing them into law.

I’ve been pretty tough on Kaine for his tax proposals to boost transportation funding and falling short on campaign promises. But the fact remains, he has done more to elevate the critical link between transportation and land use than any governor in Virginia history.

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Larry Gross

June 14, 2008

Well.. the pachyderms have found their voice:

“House speaker: State should lease toll rights

By having private companies run tolls for bridges and tunnels, William J. Howell says, the state could get upfront cash.”

NEWPORT NEWS – House Speaker William J. Howell said Tuesday that the governor’s plan to use tax increases to rejuvenate the state’s ailing transportation network is unpopular even among Democrats and the state needs to more aggressively pursue innovative alternatives.

“No one’s denying that we have a transportation problem in certain sections of the commonwealth, especially Northern Virginia and Hampton Roads,” Howell said.

But the Stafford Republican said the list of local projects is too expensive, so state officials need to turn their focus toward tolls and leasing the tolling rights for bridges and tunnels to private companies for large chunks of upfront cash.

http://www.dailypress.com/news/dp-local_howell_0611jun11,0,5903940.story

Now .. the real question is whether this is the BEST stance for the Republicans in NoVa and HR/TW to maintain and/or not lose.

I note that Del. Phil Hamilton, R- Newport News has proposed this as a solution for HR/TW.

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Anonymous

June 14, 2008

Any public official that endorses Howells position will not get my vote.

Getting upfront cash now is selling the states future.

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Bob

June 14, 2008

“Getting upfront cash now is selling the states future.”

Exactly.

This is simply bad politics and not a partisan issue. The same myopic strategy cost Republicans the Indiana state House. It’s also hurting Ed Rendell (Democrat) in Pennsylvania — although less so for Rendell since implementation is being blocked.

The sellout fails politically because the plan rests on a faulty premise: assuming people are so stupid they can’t figure out who’s going to be left holding the bag. In Daniels’ case, the motivation is ideology. He is running flashy political ads (here) trumpeting how he’s had a spending spree without raising any taxes — never mind that taxpayers are paying more. In Rendell’s case, it’s typical Pennsylvania corruption. Funny how construction, design and toll road lobbying firms have found a way into his political account.

Long after Mitch Daniels, Ed Rendell and Tim Kaine’s spending spree has ended, the public will be paying off the Spaniards and Australians in an amount 10x greater than it would have cost to pay for the infrastructure up front. 99 year leases? That’s as crazy as buying an SUV with a 15-year loan.

If the GOP in Virginia were any brighter than an energy-efficient light bulb, they’d figure out that opposing this nonsense is the only way to win back the state.

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Larry Gross

June 14, 2008

Well – here’s the other shoe – dropping…

“The Virginia Department of Transportation released a list yesterday of almost 200 construction projects that will be delayed or dropped from consideration in the state’s proposed $7.9-billion six-year transportation program.

“Those projects have no foreseeable funding sources for the next six years,” state Transportation Secretary Pierce R. Homer said of the works left out of the 2009-2014 building program.

“We are unable to initiate major new projects throughout the commonwealth simply due to the lack of funding,” Homer said.”

http://www.inrich.com/cva/ric/home.apx.-content-articles-RTD-2008-06-14-0073.html

Here’s the NoVa Cuts – not a pretty sight:

http://www.virginiadot.org/projects/resources/NoVA_Phase_Cuts_Cancelled_Unfunded_Projects_060608.pdf

here’s some that will NOT be built:

Reconstruct I-66/I-495 interchange
95 Widen I-495/95 Beltway from Telegraph Road to I-395 (5 miles)

Widen I-66 from 4 to 8 lanes

Widen I-95 from 6 to 8 lanes

Widen Route 1 from 4 to 6 lanes

Widen Route 7 from 4 to 6 lanes

Add Westbound climbing lane on Route 7

Widen Route 7 Bypass from 4 to 6 lanes –

Widen Route 28 from 4 to 6 lanes from Route 29 to Prince William

Widen Route 28 from 2 to 4 lanes from Vint Hill Road to Fauquier

about 40 more similar projects – gone

So what say you guys?

Is this Kaine using VDOT to put pressure on the GA for tax increases?

Do you support a 1% sales tax increase to pay for these projects?

What should the Republicans propose instead?

Should the Republicans support the HOT lanes but insist that the revenues go to pay for the above roads instead of transit.

Bonus Question: Should NoVa reject the 1% Sales Tax and require Fairfax and other NoVa counties to stop spending car tax money on other things and instead spend it on the above roads?

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Bob

June 14, 2008

VDOT is out of money, so we need toll roads and foreign company leases and tax hikes to save the day. That sounds awfully familiar. Take a look at this legislative Report pdf from Texas. Page 19:

“In November 2007, TxDOT announced a projected $3.6 billion agency budget shortfall by the year 2015, claiming that the Department was running out of money to pay for new construction. This shortfall ultimately led to TxDOT reducing its fiscal year 2008 construction letting target by $1.1 billion and cutting the Department’s right-of-way acquisition, engineering services, and administrative costs.”

Agreed that this sounds familiar?

“The reasons TxDOT regularly cited publicly and in discussion points provided to its staff , media, and others as the cause of the cash flow problem were, primarily, the uncertainty of federal funds; diversions from the State Highway Fund; effects of unprecedented inflation; restrictions on access to private sector investment; and the need for more emphasis on highway maintenance.”

Familiar? (although, of course, Kaine won’t mention diversion)

“The main problem underlying the immediate shortfall, however, was the $1.1 billion accounting error. TxDOT staff knew about the error as early as September 2007 but TxDOT did not publicly acknowledge it until February 5, 2008 at a joint hearing of the Senate Finance Committee and the Senate Committee on Transportation and Homeland Security. Only after this hearing and at the direction of the committees did TxDOT revise its discussion points to include an explanation of the error as a factor contributing to the shortfall.”

This, of course is not familiar. Texas has real journalists covering the legislature. Virginia does not. Virginia’s books are closed and it’s very difficult to uncover the monkey business. Look at the dates — TxDOT knew the numbers were bogus but they used them anyway.

When you accuse Virginia politicians of lying to get toll roads, it’s a conspiracy theory. Never mind that the exact same lie is fully documented by the Texas House of Representatives and Senate.

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Anonymous

June 14, 2008

“Improved traffic flow through access management standards” VDOTs answer to accessibility.

The leaders at VDOT are using this to confuse everyone. Accessibility is creating convenience by reducing the time citizens spend traveling. Access management is reducing driveway delays along major highways.
Reducing the time and miles citizens spend traveling is a major economic benefit. Reducing the time you are delayed when someone slows down for a driveway does help slightly. It is usually lost at the next light.

True accessibility is created by redesigning our cities in conjunction with our transportation systems to increase destination densities.

Neighborhood schools and safe routes to school anyone?

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Larry Gross

June 14, 2008

I think we’re dealing with the here and now….

was there an answer in your response about how Virginia and/or NoVa should go forward – that is politically feasible?

or.. is the answer that the system is so crooked and non-responsive.. that there is no answer?

I do have my own views of how to go forward.

I’m asking for alternatives from those that disagree.

one caveat: they need to be something the public will accept..

conspiracy theories and off the wall ideas don’t get roads built.

give some ideas about how to get these roads built OR perhaps say that those roads are not needed anyhow…

we know your true feelings about toll roads and concessions.. that horse is purifying…

move yourself to the window that sez “solutions please”.

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Bob

June 14, 2008

You can’t arrive at solutions if you don’t understand the problem. But “Plan B” is, as has been said before:

Take the $5 billion that Kaine seems to think exists to build a useless train to Dulles.

Seems that since this money comes from raiding motorist funds (state and federal), it’s only fair to un-divert it to the widening projects. I’m all for a referendum: “Widen these roads, or build a train to Dulles.” Which do you think would win? If more money is needed, cut the fat. There’s plenty of it: the idiotic 511 program, the electronic message boards that provide no useful information (when they’re even legible), slash the state police budget subsidy, eliminate funding for traffic calming, etc. Dump lawn mowing responsibilities back onto urban/suburban counties (Fairfax County has $200m in extra car tax revenue — use it). That frees up an annual revenue stream. Use it to finance the rest. Raise gas tax a few cents as an absolute last resort (shouldn’t be needed for that list).

Is the Texas state legislature a den of conspiracy theorists?

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Larry Gross

June 14, 2008

hmmmm.. isn’t that 5 billion coming from tolls on the DTR?

so are you advocating using tolls to collect money for other road projects?

I thought you were opposed to tolls?

or.. would you advocate taking the tolls off the DTR all together?

so I’m asking a 2 part question:

1. – what part of the NVTA list of projects (and the just deleted VDOT) projects do you support

2. – how would you fund them?

Here’s Kaine’s Plan:

$445 million for Statewide Maintenance that is derived from motor vehicles sales tax and increase registration fees.

Do you agree that this money is needed and do you agree with Kaine’s idea of where to get the money?

For NoVa, Kaine is proposing a 1% sales tax (about 300 million annually) to be spent (as recommended by the NVTA):

40% for localities
50 million for METRO
25 million for VRE
and about 100 million annually for Regional Projects

http://www.thenovaauthority.org/projects.html

http://www.transportation.virginia.gov/Docs/05-11-08_Kaine_Transpo_Plan_sprdsht.pdf

So .. are you opposed to ANY new taxes for any new projects?

Is the best approach to not increase taxes at all – neither at the State level or the NoVa level and to put pressure on the NoVa counties and cities to reallocate the existing money they collect for car taxes to roads?

re: conspiracy theories

would you trust TXDOT or VDOT any better if they swore off of tolls and advocated gas tax funding only?

I’m trying to understand if these conspiracies are with respect to those who advocate TOLL roads or is it with respect to the entire DOT no matter what sources of funding they are seeking?

or is this sort of a “situational” conspiracy situation?

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Anonymous

June 14, 2008

A key test of whether Tim Kaine’s transportation-land use link is tough will be how VDOT comments on Fairfax County’s 527 traffic study for Tysons Corner. An initial look is that the final recommendation for added density will add horrendous amounts of auto traffic to the roads and highways in and around Fairfax County. Fairfax County DOT personnel have said, off the record, the likely impacts would be totally unacceptable.

At the same time, massive amounts of density will provide landowners and their agents with huge windfalls. I posted an article indicating that one set of Tysons buildings just sold for $311 per square foot and they are not right near a train station.

There will be incredible pressure on Kaine and VDOT to close their eyes to the real traffic impacts. If Kaine goes along, he is effectively an empty suit (ala the guy he’s supporting for president). But if Kaine rejects the political pressure and VDOT rips the Tysons Corner plan to shreds (as it should), he well may deserve real recognition as the first Governor (since I moved here in the 1980s) to take a stand against Developer Worship. His transportation-land use link would be for real.

TMT

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Larry Gross

June 14, 2008

remember TMT – VDOT is one of those conspiracy outfits…

I was thinking of you and Tysons when I read this.

It’s too late for Tysons but then I was wondering if there are other areas in Fairfax up by the river who may have followed the same strategy.

excerpts:

Milton sees septic tanks a defense for rural charm

The Atlanta Journal-Constitution

Milton enjoys a quality of life that many might envy.

Many Milton residents are determined to protect the rural charm. They share a deep-seated fear of being steam-rolled by those well-known country killers: high-density housing, strip malls, industrial parks and the like.

Some believe they have a secret weapon in a war that many others have fought — and lost — in metro Atlanta.

Septic tanks.

Despite concerns that septic tanks can cause environmental problems if they’re not maintained, many residents see them as a way to keep the bulldozers at bay.

“Sewer brings density, and density will ruin Milton,” said Ferrall Sumrell, who has lived there since 1994. “If you look at any area with sewer, you’ll see increased density. Septic tanks will keep Milton from being overdeveloped.”

Sumrell has plenty of support. An anti-sewer petition last year in Milton quickly garnered about 560 signatures.

The City Council is faced with conflicting pressures. The cash-strapped city could use taxes from more sewer-connected commercial property,

Milton, located in the northernmost corner of Fulton County, has 20,000 mostly affluent residents.

The community’s no-sewer stance is not new. As the area developed, its residents pressured Fulton County to keep sewer out in order to maintain its country atmosphere. Now, the city is only about 35 to 45 percent developed, and residents still revel in the rural feel of the area.
They’ve got everything shut down.”

As a strategy, it may be working, Potts said.

“People in the development community are starting to say, ‘You don’t want to invest in Milton because you can’t get sewer.’ If you can’t get sewer, you can’t develop.”

The sewer-septic issue was the key issue in the last election. Candidates tagged as “pro-sewer” were defeated.

Forsyth’s position is consistent with state and federal studies that have determined that septic tanks are to some degree, a “consumptive use,” meaning water is used and then lost in the soil.

“When septic tanks aren’t properly maintained, and, according to the literature, many aren’t maintained, bad stuff goes in the groundwater,” Stephens said. “If you have enough failing septic tanks concentrated in a limited area, it’s really bad for the environment.”

Supporters of the no-sewer-expansion policy point out that sewer systems also fail sometimes and in larger volume. And, they argue, growth from sewer would bring more people, more water consumption and more storm water runoff.

http://www.ajc.com/services/content/metro/northfulton/stories/2008/06/14/milton_sewer.html?cxtype=rss&cxsvc=7&cxcat=13

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Anonymous

June 14, 2008

The very same holds true in Great Falls, VA. Many areas of Great Falls lacks sewer, and the residents want to keep it that way. Septic tanks and well water serve as a barrier to over-development in one of the most rural part of Fairfax County.

Developers and some landowners hate their inability to obtain a major expansion of sewer service. Most other residents fight it.

TMT

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Bob

June 15, 2008

“so are you advocating using tolls to collect money for other road projects? I thought you were opposed to tolls?”

Government money is fungible, one big pot of cash. You need to get away from project level sourcing, which is just smoke and mirrors. What really matters is the total money in vs. total money out. But to answer your question — the realistic scenario would be to keep the tolls. My perfect scenario would be to eliminate all tolls in Virginia by reclaiming the money diverted to mass transit. (Not talking about sources — the full amount of money taken from drivers would be spent on roads, unlike the current setup.) Obviously I prefer the perfect scenario.

I support every widening project without reservation. I’m skeptical of “improving” interchanges without looking at the proposals. Case in point: the Springfield Interchange. Took a crazy amount of time (10 years?) with huge traffic backups and hundreds of millions of dollars and the result is a confusing monstrosity with no extra capacity. It’s just a mess of loops to provide access to HOV/HOT lanes, not to fix the bottlenecks. A waste.

I oppose Kaine’s tax hikes because all the money will be wasted on transit that nobody uses.

“I’m trying to understand if these conspiracies are with respect to those who advocate TOLL roads or is it with respect to the entire DOT no matter what sources of funding they are seeking?”

Situational conspiracy is a fair point. Here’s the difference: billions in cash. Tolls represent easy money for a lot of companies, and they’re willing to do whatever it takes to “invest” in getting those deals. This represents a factor that doesn’t exist in the gas tax scenario. Basically, it multiplies potential for corruption by a factor of 3 or 4. Specifically, VDOT contracts out about $1b in work right now to the private sector. Tolls/leasing assets could take that to the $3-4b or maybe even more.

In the case of Texas, Rick Perry made tolling every road his priority. You can either believe it’s ideology (“no new taxes! tolls everywhere”) or you can figure out that his top aides have been through the revolving door a few times. It doesn’t matter. The indisputable fact is that TxDOT lied about toll roads, and they got caught. Does it make a difference if it’s ideology-based lying or corruption-based lying, or a mix of the two? Not really.

In Virginia’s case, just look at the deal. It reeks of corruption.

The Australians get to collect money from their toll lanes for 99? years (not sure the length of the deal) with Virginia motorists paying half the bill. Aussies get $589 million in federal loans and $589m in first-ever federal taxfree bonds plus $700m in Virginia money for the set up costs details. Those bonds are an unconstitutional tax free giveaway to a private company.* What it means is that the Aussies aren’t even putting up any of their own capital. So tell me why taxpayers are wholly financing a project so that private companies can profit? I don’t mind short-term contracting for operations, it’s the long-term ownership that makes absolutely no sense for a public asset funded by public money. (* On the bonds, the Supreme Court just issued the decision Department of Revenue of Kentucky v. Davis, in which footnote 2 mentions the tax free bond legality question will be ‘left for another day,’ so at best the legal status of this deal is in question — hello, another toll road lawsuit…)

I have no illusions regarding VDOT. That’s why I do not support any new money being raised from taxpayers (especially drivers) without an iron-clad guarantee that new money will only be spent on building specific new roads and existing road widening type projects.

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Larry Gross

June 15, 2008

Happy Father’s Day Bob and to all BR Blogger Blatherers(me included).

Thanks for further explanation of your views.

Do you think that people who support tolling, including DOT leaders, Gov, etc… are themselves corrupt and conspiratorial in their support of tolling…

Or would you agree that many honest people of good morals simply believe that tolling is better?

I think you might want to allow that some folks are not conspiratorial but instead truly believe that tolls are better from the prospective that less people are opposed to them than guess taxe increases and that the same public that opposes the gas tax by 5-1, supports tolling by 2-1.

Is there room for corruption?

Yes.. but I don’t see it as and more likely or do-eable than many other areas that the government contracts with the private sector.

I’m skeptical that just picking out things that one opposes and then claiming that those areas are more susceptible to corruption ..have moe corrupt individuals involved,

I’d have to see some real data that shows that some types of govt/private sector transactions are that way.

with regard to Kaine’s Budget –

&445 million dollars for maintenance – not a penny for transit –

if you tried to generate that with the gas tax – you would have to raise that tax 9 cents statewide.

With regard to the 300 million annually for NoVa – 200 million is for roads.

and if you wanted to raise it by a NoVa gas tax increas it would take about a 15 cent gas tax increase in NoVa.

The entire VDOT budget of 4 billion has a very small portion of it (5% or so) devoted to transit. Re-dedicating that to road only would make a very small dent in the billion of new funding that Kaine is asking for.

You many have also noticed that in Kaine’s budget – he has broken out transit money separately and he gets the money from real estate and of the billion of new money he is asking for only 142 million is for transit.

Poll after poll in NoVa shows widespread support for transit – and if the money is coming from a sales tax then why should it go to roads?

You’ve said that you feel that regardless of sources – that money should be spent on roads..

Those sources are usually call General Revenues and by definition elected leaders decide how much to spend on what things – different every year according to priorities.

Under that kind of funding – there is no lock-box.

You would have to come up with a way to show how much of non-gas tax funding .. what percentage of it – “belonged” for roads and I’m not sure how you’d do that on a percentage basis – not sure what other things in the budget are decided that way.

It would be like saying what percentage of the budget should be spent on education.

Anyhow. you can take all of the transit money out of the equation and there is a one billion dollar shortfall in the VDOT budget for roads.

That billion is over and above the 860 million that Kaine is asking for – 445 million for maintenance and 300 million for NoVa.

I don’t see how you will be able to generate this much money by cutting out transit.. anyhow

so that leaves us with how to fund the maintenance backlog and how to fund the non-transit NoVa projects.

So I’m trying to understand if you believe these projects are needed and if so.. how should the money be raised?

Kaine’s 850 million plus the one billion projects (with the widenings and interchanges) would amount to 1.8 billion dollars.

If you tried to raise that with the gas tax -statewide – it would require about 27 cents gas tax.

Do you think trying to raise this much money via the gas tax is viable politically?

You say you won’t vote for any Republican who supports tolling and concessions.

What approach from Republicans would you support?

Are you saying: “no new taxes”?

if you are not.. then how about weighing in on how much new revenues you think are needed and how to source them?

thanks!

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Larry Gross

June 15, 2008

re: where should water & sewer be located and why?

I’d like to hear from EMR about where water & sewer should be located .. and why…

for instance, should Great Falls have water & sewer and higher densities or not?

Should Great Falls have greater densities rather than Tysons – as a “balance” that prevents “too extreme” densities in Tysons?

It would seem to me that if Fundamental Transformation implies evolving settlement patterns – that we would need to have a generalized approach that would give some guidance in situations like Great Falls and Tysons as to how much density both should have or not have and why.

TMT has made the point that the current “plan” for Tysons fails utterly to plan for ADEQUATE public facilities for KNOWN and expected needs – that the pursuit of density seems without regard to impacts to quality of life issues.

So, the obvious question is.. why should Tysons become more dense instead of areas around Tysons that are less dense – those areas becoming more dense especially if they have adequate capacity or can have adequate capacity added to maintain level of service standards ..at least much easier than can be done with Tysons?

Full Disclosure:

As per my practice – I have no particular dog in this hunt.

I like asking questions about apparent contradictions that I don’t understand – and my assumption is that if I see a contradiction that I’m not alone..and full-service advocacies seek to fully answer apparent contradictions as part and parcel of the responsibilities of legitimate advocacies.

Advocacies that avoid the hard questions become more and more like “you just gotta believe” and less and less like rational strategies when they fail to respond to obvious contradictions.

so I do ask the questions.

so why should Tysons be developed 10 times more dense than other areas in Fairfax?

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E M Risse

June 15, 2008

Money is not the issue;

Not where Agencies get it;

Not where or how Agencies spend it.

There are no transport facility, or transport facility finance schemes that will solve the Mobility and Access Crisis.

There are settlement pattern solutions that will solve the Mobility and Access Crisis.

EMR

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E M Risse

June 15, 2008

All the things Kaine list are “steps in the right direction” but they are baby steps.

Without a “Wright Plan” for the Commonwealth, and

A rational plan and strategy for evolving functional settlement patterns in the three New Urban Regions into which land in the Commonwealth falls,

Kaines steps take the Commonwealth NOWHERE no matter how laudable the intent.

Again most of the comments in this string document the realtiy that without;

A Comprehensive Conceptual Framework;

A robust, articulate Vocabulary; and

Tools such as Regional Metrics,

There is no chance of success.

Almost all the comments in this string attest, unless there is broad citizen understanding there will be no support for the actions that are needed.

What can you do today so that your grandchildren will not curse the actions that drive dysfunctional human settlemetn patterns?

EMR

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Larry Gross

June 15, 2008

What is the optimal density and population of NoVa and where should it be – and not be?

If you could “design” what NoVa should look like – what would Tysons look like and what would Great Falls look like and if different – why.

Question 2:

on mobility and access –

How should NURs and NUR Support Regions be connected for mobility and access and what governance structure is needed to coordinate these decisions between regions?

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Anonymous

June 15, 2008

Larry

Excellent posts

There is no republican alternative besides toll roads and the claim that there is enough money that can be found by eliminating waste and cutting other programs

If the Rs want to be taken seriously they should identify this waste and programs to cut

The thing you have to remember about all of this though is this is a Regional issue

In almost all of the Republican areas there is no transportation crisis. Everyone knows maintanence will always be funded by taking money out of new construction. Finally, most of the transportation spending would occur in areas outside of their districts. (The opposite of the education funding)

In most of the Democratic areas there is demand for transportation
improvements.

Hence we have the current stalemate

One interesting thing to close on. though The voters of Northern Virginia did reject the sales tax several years ago.

Should be an interesting next couple of weeks

Happy Fathers Day to all the fathers

NMM

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Bob

June 15, 2008

“Do you think that people who support tolling, including DOT leaders, Gov, etc… are themselves corrupt and conspiratorial in their support of tolling…”

First, I do say that some people push toll roads out of ideology. Sometimes the ideology has such a strong hold that ideologues are blinded to the obvious problems. Namely, toll roads cost more to operate, are extremely dangerous and create congestion. These might be people of good morals.

It doesn’t make any difference if toll roads are pushed from ideology (do-gooders) or promise of future financial gain (revolving door). When one points out the self-interested motivations of the politicians involved, it’s more useful as a warning that (a) the deal might be bad or (b) that they’re lying. In this case, the facts at hand are sufficient to point out that toll roads are being sold on a basis of pure lies.

Let’s look at them. VDOT says it is short $1b. A sister agency, TxDOT, said the exact same thing one year ago. Except TxDOT was caught red-handed in the lie. We won’t know whether VDOT is lying because we have no real media in Virginia. But let’s look at some indicators —

Has not Kaine/VDOT implied the need to use tolls because the gas tax revenue was drying up? I can quote you US DOT sources saying that. As you know, that’s a lie in Virginia. Highest gas prices ever, an economy on the brink of recession and gas tax revenue year to date is up, not down. Most recent month shows a decline of 0.1% — that’s more rounding error than crisis. In fact, toll road revenue is actually being hit much harder as tolls are more of a discretionary expense.

So are Virginia’s claims of being broke are a lie? It appears so.

When you pull out Kaine’s numbers to make your points, you’re already buying into the lie. Those numbers are smoke and mirrors. This is the bottom line:

More money is taken from drivers in user fees and taxes than is spent on roads. I’m talking about fees and taxes that drivers, only drivers, and nobody but drivers pay. Therefore, it is unfair to impose more fees on drivers when they’re already paying enough. Fairfax County steals $200m/year from drivers. If that diversion rate is proportional in other counties (no, I’m not going to read 71 local budgets to find out), then there is your ~$1 billion. The transit budget is $694 million. So when I say that motorist money goes to transit, it’s because when you look at the whole pot of money, it’s pretty obvious where the cash is flowing.

Please, please tell me how Tim Kaine can say “we’re broke” and then embark on a $5b rail project to Dulles that a handful of people will use? This is how every government agency operates. Waste money, claim poverty, demand more money.

As for the public supporting tolls 2-1, that’s push polling nonsense. I’ve already cited the cases where actual votes rejected tolls: Indiana’s House went Democrat after Mitch Daniels sold roads to the Spaniards and Australians. Londoners just gave a 6 point boot to Red Ken Livingstone, Mr. Congestion Pricing. Edinburgh voted (not polled) 2-1 against congestion pricing in 2005 — that was the last time bureaucrats ever agreed to a fair referendum on the issue. In 2006, Stockholm had a referendum that was rigged so that only the votes of people who didn’t pay the toll counted (i.e., those inside the zone) — it did pass by one point. Not much of a victory because in the election, the rest of the voters who did pay the toll deposed Annika Billstrom, the mayor responsible for setting up the congestion pricing. Read the TxDOT report cited above and it mentions people are furious over the Trans Texas Corridor toll road — 20,000 comments, almost all of them negative.

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Larry Gross

June 15, 2008

so… was there an answer there as to what your ideal/hero (Republican?) should support in Va/NoVa?

Do you think the Republicans should say that the way to meet needs in NoVa is for the NoVa jurisdictions to stop spending car taxes on things other than roads?

Would that get Republicans elected or keep them from becoming unelected?

re: 2-1

check your polls Bob.

Folks are 80% opposed to the gas tax.

in the same polls – like the recent Christopher Newport Poll in Hampton Roads – people preferred tolls over sales or gasoline taxes.

The AAA also asked this same question and got the same result.

Why do you use Loundon numbers instead of the data just collected in Hampton Roads?

Is the Christopher Newport poll wrong?

why do you treat polls that you don’t agree with as not credible?

I don’t think people are strongly in support of tolls – true – but there is no question about the gasoline tax – or do you not believe that poll either?

Do you think that people support an increase in the gas tax?

Have you got a poll that shows that?

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Bob

June 15, 2008

“Why do you use Loundon numbers instead of the data just collected in Hampton Roads?”

Assuming you meant London… because it is not a poll. It is an actual vote. And it fits a trend: London, Stockholm, Edinburgh, Indiana. There’s a difference between asking 500 people via telephone about a project that hasn’t been built, and asking one million people what they think about a project that they have experienced first-hand. Surely you can see the difference.

But even your CNU poll isn’t that strong.

23% strong support for tolls with a statistical dead heat on agree vs. disagree for tolling (i.e., it’s within error margin). That’s hardly “2-1 support” and it’s barely stronger than support for increasing the statewide sales tax.

But look at the other CNU question:

“I worry that new funding for transportation improvements will be diverted to other uses and not spent on transportation improvements in Hampton Roads.”

49% strong agree, 29% somewhat agree. These people are going to say no to any gas tax hike because they know it will be wasted. The people who support tolls think (wrongly) that it’s harder to divert a toll than the tax. Tim Kaine has proved that one wrong.

So when you ask “do you think people support increasing the gas tax”, it can’t be answered in isolation. Given the current spending spree on garbage like Dulles Rail, of course people don’t want to send Kaine more cash. I’d vote no in a referendum on that. I ONLY support a hike in the gas tax in a lockbox world where car taxes are spent on roads and it turns out more money is needed. You simply don’t have polling data on that question.

And support for a transportation lockbox is: 67% strong agree, 20% somewhat agree.

I don’t like polling. But this one hardly says what you imply.

I’ll stipulate that you can find a dozen toll road company funded polls that do have 2-1 support for tolls. They’re all found on the Reason Foundation website.

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Larry Gross

June 15, 2008

I think there is an ongoing backlash with tolls and concessions… as the public is starting to more fully appreciate the potentials ….

but the public – as a whole – does not support ANY new taxes or tolls – period – either and the polls are consistent about hatred of the gas tax.

We live in a political world.

Politicians might show some “courage” on a 50-50 public split on some issue but they are not going to fall on their swords on a 80-20 split.. Ask Mr. Bush that question.

That pretty much rules out the gas tax but I did ask you if the Republicans should offer a different way of raising new money or put together a real – on paper – plan to show how to use existing monies without having to ask for more new money.

and to this point.. no Republican that I know of has done this.

what does this mean?

It means the can is going to get kicked down the road until the ONLY option still left on the table for a needed new road is going to be toll-financed..

or .. no road…

It could be that after June 23 – that no decisions are made no approval of Kaine’s proposal and no alternate proposal that succeeds from the Republicans…

.. which is the kick the can scenario.

no tax increases, no tolls, $4+ gasoline = what?

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Darrell — Chesapeake

June 15, 2008

“If the Rs want to be taken seriously they should identify this waste and programs to cut”

That is why the r’s were voted into office. Instead of pursuing that promised mandate they decided to come up with innovative ways to increase taxes on stagnant wages. Now they are getting their a** handed to them in the only public opinion polls that count.

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Bob

June 16, 2008

“Republicans should …put together a real – on paper – plan to show how to use existing monies without having to ask for more new money. no Republican that I know of has done this.”

Almost. Bob Marshall has pushed a “lockbox” constitutional amendment that would undivert at least $100m/year. It’s not a complete solution, but it’s a good start. Haven’t seen Oder’s bill. Marshall’s is HJRes 18.

Of course the GOP should come up with a specific alternative plan. But this is the party of abuser fees — talk about tone deaf nitwits. It it weren’t for Bill Bolling, Howell would have persisted in his party-destroying mania.

A transportation plan in any other state make a prime candidate for a voter initiative. I guess it’s a “descendant of Pocahontas” thing that you don’t want the pesky people to have any ideas of their own. Washington State has a great initiative along these lines: massive PDF.

Basically, you take car sales taxes and profits from red light cameras and funnel it into a congestion relief fund. By a law that the legislature can’t overturn, this money can only be spent on concrete, measurable — and audited! — congestion relief programs. It would force traffic light synchronizing, undoing the evil work of traffic bureaucrats who like to create congestion as a form of “traffic calming.” Roadbuilding qualifies, transit does not. We’ll see how it does.

Regardless, it’s a good idea and good politics.

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Larry Gross

June 16, 2008

well.. it’s like I said:

Here is Kaine’s Plan:

http://www.transportation.virginia.gov/Docs/05-11-08_Kaine_Transpo_Plan_sprdsht.pdf

and his is the Republican Plan:

http://www.nowhereinsight.gov

The NVTA has over 300 million dollars worth of projects that they say need funding not counting the 300 million that VDOT just cut (actually they cut a Billion and I’m assuming 1/3 give or take was probably NoVa).

A 100 million dollar lockbox at the state level is chump change when Kaine is showing a 400 million annual deficit just in the maintenance funding – not a penny for transit and not a penny for new road construction).

If the Republicans think that existing money is being not spent properly on transportation – for instance Fairfax NOT spending the car taxes it collects – on transportation…

then they need to put together this:

http://www.the_pachyderm_no_mo_tax_plan.gov

otherwise all talk no action…

or as they say in baseball

“no stick….no stick”…

What if Howell had said instead – “Non-Profit Virginia Public Benefit Corporation operated by an elected board with one year terms – to use Va pension funds to build new roads – paid back with tolls that are limited to a fixed, market-competitive rate of return”?

And any Virginian can buy shares in that corporation with zero account fees.

The folks who would operate this fund would be the same ones we now trust to run the existing fund – the only difference is that they would invest their funds in Va Roads.

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Bob

June 16, 2008

“Kaine is showing a 400 million annual deficit”

Uh-huh. And Kaine is showing $5 billion that can be spent on Dulles Rail. Either he’s lying that the money exists for rail, or he’s lying that the money doesn’t exist for roads. Your pick.

“And any Virginian can buy shares in that corporation with zero account fees.”

I like your thinking there. Sort of a credit union version of a toll road, which in theory could eliminate the problem of the intentional creation of congestion. That still doesn’t overcome the fundamental problem that tolls are horribly inefficient (and when you’re talking about raising billions, that inefficiency equals hundreds of millions wasted). The tolls would still require big brother tracking. And unless you’re talking all-electronic with no general purpose traffic mixed in, toll roads are still dangerous.

By the way, no argument from me that the VA GOP is derelict in not having a plan. Can you say, permanent minority?

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Anonymous

June 16, 2008

“So what say you guys?”

We don’t need any of those projects, and the money could better be spent elsewhere – – if there was any.

Tolls are not going to create any new money.

RH

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Larry Gross

June 16, 2008

“Uh-huh. And Kaine is showing $5 billion that can be spent on Dulles Rail. Either he’s lying that the money exists for rail, or he’s lying that the money doesn’t exist for roads. Your pick.”

let’s point out what is wrong with this thinking and, hopefully, advance the discussion.

The 400 million deficit is STATEWIDE on ALLl roads ACROSS Virginia.

The DTR toll issue is primarily NoVa with far, far more NoVa support than just Kaine.

In fact, if NoVa was opposed to it, guess what, Kaine would be opposed to it.

But to advance the discussion.

Are you or are you not in favor of using toll roads to generate excess funds for other roads?

take the transit out of the argument.

Let’s assume that the GA – Republicans pass a law that says that toll roads WILL be built …per my non-profit idea – but that the proceeds WILL be …you’ll like this – lockboxed for roads only?

so do you support tolls or not?

no weaseling allowed.. answer up.

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Anonymous

June 16, 2008

so do you support tolls or not?

No.

Tolls are a wasteful way to collect money.

If the money collected by tolls is diverted to other uses – even other roads, then calling them user fees is a fraud, and they are no better in allocating funds to other uses than the present system.

There is NOTHING to be gained by instituting tolls, as far as I can see, and we should not do it. If we do, it willbe a huge mistake we will regret later.

RH

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Larry Gross

June 16, 2008

I’m still waiting for Bob (and Grovetons answer):

Are you both opposed to ANY and ALL tolls – period – as RH is?

and RH:

“Tolls are a wasteful way to collect money.”

compared to what?

is this just your opinion or do you have a comparison study that shows that the transaction costs of tolls are higher than the transaction costs of other taxes?

Do you know right now.. for every dollar of gas tax collect – how much of that is transaction cost?

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Bob

June 16, 2008

“I’m still waiting for Bob (and Grovetons answer): Are you both opposed to ANY and ALL tolls – period – as RH is?”

Already answered above at 8:43 PM and 5:06 AM. And probably a dozen other times. And see below.

“Do you know right now.. for every dollar of gas tax collect – how much of that is transaction cost?”

Your willful ignorance on this point would be tiresome, except it’s handy to explore the issue even more deeply. The budget for the ENTIRE Department of Taxation for Virginia is $97 million for FY09/10 ($80 million in FY07 minus irrelevant stuff). That includes income tax, sales tax, sales tax on gas, etc. The cost per $100 collected is 55 cents. (Page 4). The cost of collections for the E-470 is $16 per $100 collected.

Source: VA Dept of Revenue PDF

Let’s look at a suite of toll roads and their total collection costs
E470: $13,165,200 for 47 miles
Orange County TCA: $37,893,000 for 51 miles
SR91: $7,671,526 for 10 miles
CTRMA: $6,650,295 for 4.5 miles
Total: $65,380,021 for 112.5 miles

Source: Washington DOT pdf

Taking the per-mile average cost of the four best toll roads in the country above, it would cost $649,732,119 just to collect tolls on every interstate highway in Virginia. We’re NOT talking about maintenance, that’s just collection costs. How much evidence do you need before you get it?

I also need to add to my car taxes revenue chart:
Tire tax $5m
Sales tax on fuel $54m (not sure it’s there or not)
Car line companies tax $750,000

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Larry Gross

June 17, 2008

Bob – what is the transaction cost of processing a credit card transaction for a gasoline purchase?

Who pays that transaction cost?

If the customer pays for that transaction cost – what would determine if it were a “rip off”?

is there a number? What is a BAD number for transaction costs?

The Dept of taxation does not pay for the transaction costs for gasoline purchases – they merely pay to process the net receipts that they receive -after someone else has paid the transaction costs.

What is the difference in paying for gasoline or tolls using the same basic electronic collection method?

How much do you think the transaction cost is when you go in to pay for your gas and get a drink

If you want to compare – compare the cost of collecting the toll – per transaction with the cost of collecting for the gasoline purchase (and gas tax)- per transaction.

You don’t know the actual data – right?

You’ve provided no authoritative cites only your own back-of-the-envelope and even that treats the service station transaction cost as zero and it’s not.

Why don’t you admit it.

You are looking at everything you can find as “cons” against tolling – because you’re opposed to tolls not because you are looking objectively at pros and cons.

You’re entitled to do that – don’t get me wrong.

I just don’t buy your analysis and would prefer to see some real data looked at by someone – objectively.
Your “analysis” is clearly biased and you have no intention to provide an objective view.

Transaction costs are irrelevant IMHO unless you can clearly demonstrate that they are way out of proportion to other types of transactions and even then.. it’s like the LOTTO.

Who makes the argument that the transaction costs of LOTTO tickets makes them a inefficient way to collect money?

No one. Because they provide something that people want and and willing to pay for -which including the embedded transaction costs.

In both the lotto and the toll cases – the transactions – are voluntary quid-pro-quo and if people think in either case that the transaction costs are excessive – they can opt out – something they cannot do with taxes.

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Larry Gross

June 17, 2008

“Toll collection costs range from about 10% of total tolling revenue for electronic toll collection, up to 40% for tollbooths.”

http://www.vtpi.org/tdm/tdm35.htm

…”Eliminating cash tolls would save money for E-470, McCuskey said, but officials do not have a solid idea of how much the total savings would be until consultants prepare a new traffic and revenue study.

To illustrate the potential for savings, DeLozier said each cash toll transaction costs E-470 between 25 cents and 30 cents to handle and process, while each transponder transaction costs between 8 cents and 10 cents.”

http://www.denverpost.com/news/ci_6888486

“In many respects, the transaction processing function resembles banking, and several toll agencies have contracted out transaction processing to a bank.”

http://en.wikipedia.org/wiki/Electronic_toll_collection

“Speedpass is a “contactless” payment system that provides members with a quick and easy way to pay for purchases at participating Exxon and Mobil stations nation-wide. Speedpass is similar to the electronic toll technology successfully used on subway, bus, and highway systems around the world.

Your Speedpass key tag has a built-in chip and radio frequency antenna that allows it to communicate with Speedpass readers at gasoline pumps, convenience store terminals, and car wash kiosks at Exxon and Mobil locations.”

https://www.speedpass.com/forms/frmHowItWorks.aspx?pPg=howTech.htm

Now Bob – if Exxon-Mobil will let you pay for your purchase using the same exact technology that highway tolling uses and the transaction costs are essentially the same as for cash or credit card purchases – what’s the problem – especially if you have a choice to use it or not?

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Anonymous

June 17, 2008

Larry, give it up.

People already pay the transaction costs for buying things.

Unlike tolls, there is no entirely new infrastructure to be built, maintained and staffed.

There may be some marginal costs, but it is ordersof magnitude different.

You don’t need the exact numbers to see the difference between an isc cube and an iceberg.

RH

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Bob

June 17, 2008

“You’ve provided no authoritative cites only your own back-of-the-envelope and even that treats the service station transaction cost as zero and it’s not.”

I apologize for not pre-clearing all my statements through a Reason Foundation report or wikipedia. That doesn’t change fact number one: STATE AND FEDERAL GAS TAXES ARE NOT PAID AT THE SERVICE STATION.

So, here’s an incovenient truth for Mr. Larry Gross. There is no credit card cost for gas tax transactions because there are no credit cards involved. Gas tax collection is nothing whatsoever like a toll transaction. It is an EFT at the terminal paid by the gasoline distributor. Not the consumer. Not the retailer. The distributor.

This is fact number two: Charging a few a lot of money is always more efficient than charging many people a small amount. Do you deny this?

Despite repeating these two facts several times, you seem to prefer to persist in your fantasy that the statewide tax is paid at the pump. Look up ‘excise tax’ in the dictionary, then look up ‘cherry picking’, then look in the mirror.

The EXACT, documented cost of collection from the Virginia Department of Revenue is 55 per $100 for income/sales/gas taxes. Page 4 of their annual report. The EXACT, documented cost of toll transactions is $16 per $100. That’s in the charts from the WSDOT report. Facts. Precise. Cited. That is not a “back-of-the-envelope” calculation.

The difference between the two methods is a factor of TWENTY-NINE. As RH puts it, the difference between the ice cube and an iceberg.

“What is a BAD number for transaction costs?”

Any number greater than is necessary. We have an existing system that is collecting revenue that is the most efficient possible as far as collection goes. The gas tax if faring better in a down economy than toll roads are right now. Moving to a system that is 29x less efficient is absurd in the extreme.

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Larry Gross

June 17, 2008

Let’s be clear, I’m not arguing that tolls are better because of transaction costs.

and I think I did provide cites to show that ETC transaction costs are around 10% which is consistent with your number of $16 per 100.

That is apparently an acceptable number for Exxon-Mobile using a very similar RFID collection method and they would not use it if it’s costs were prohibitive.

It’s also an acceptable method for collecting sales taxes at gasoline stations including the 2% gas tax in NoVa.

There is no “horrendous” transaction costs associated with ETC.

There is a cost and that cost is not that different from similar electronic transaction systems.

Your cites .. do NOT support your assertion that the transaction costs of ETC are out of line with other similar methods of electronic transactions.

and you are using this argument as a rationale to be opposed to tolling and it does not wash.

there ARE some legitimate issues with tolling – like the “shrinkage” problem but no where have I seen any report from any source that cites the transaction costs as prohibitive – and a reason to not use ETC.

In fact, the opposite that ETC is quite a bit more efficient than manual toll booths and ETC is cited as the reason why high speed tolling is now feasible.

Again.. I have not found a report from any source that cites high transaction costs of ETC being higher than other similar electronic transactions.

If you have found one, please don’t hesitate to provide it.

Otherwise.. i still consider your back-of-the-envelope to be just that.

It’s clever but it’s incorrect.

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Larry Gross

June 17, 2008

re: “People already pay the transaction costs for buying things.

Unlike tolls, there is no entirely new infrastructure to be built, maintained and staffed.”

It does not matter if it is a “new” way if the transaction costs are in line with other point of sale systems.

And in fact, the infrastructure is not new – it is the same exact infrastructure already in use for existing point of sale transaction systems.

If you bother to read one of he cites provided – you would have seen that some toll companies actually contract out the transactions to banking companies who already have in place those systems.

If you never worried about transaction costs before with respect to other purchases – you never knew what the actual percentage was then why would you now be concerned?

Are you concerned with the transaction costs for airline tickets, for DMV transactions, for Lotto sales.. for movie tickets?

why is your concern about transaction costs ONLY for tolls?

and why should you care if the companies that design and operate point of sale transactions decide on a business basis what is acceptable or not?

Would you boycott a business that had too high transaction costs?

Would you tell your elected official that DMV fees are too high because of transaction costs?

methinks you and Bob don’t really care about transaction costs in the first place – it’s just shorthand for “I’m opposed to tolls”.

you guys don’t have a leg to stand on much less get into a butt-kicking contest.

🙂

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Larry Gross

June 17, 2008

Bob/Ray – Bob sez that the transaction costs for SALES TAXES is the SAME as GAS TAXES.

How can that be?

When you go into a store to purchase something – the point of sale system has to calculate your sales tax.

The sales tax is not paid at the wholesale level but instead is paid at the point of sale.

How does the transaction costs for sales taxes compare to the transaction costs for gasoline?

Would you then say that if the transaction costs for sales taxes is higher than for gasoline that sales taxes transaction costs are too high and should be done away with?

the transaction costs for sales taxes or probably very close to the costs for ETC so why would you advocate that ETC is “too expensive” to administer but the sales tax is not?

And tell me again the difference in the sales tax transaction costs between the point of sale and the Department of Taxation?

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Anonymous

June 17, 2008

“It does not matter if it is a “new” way if the transaction costs are in line with other point of sale systems.”

Of course it does. It is not only new, but additional. Even if it costs the same as other transactions, there is no reason to do it if it can ride piggyback for free.

You buy gas, you swipe the credit card anyway. that transaction cost is paid.

Then you get on the tollroad, and pay it again.

This is as dumb as algae.

It isn’t short for don’t like tolls, it’s the reason I don’t like tolls. Why would I want another aggravation in my life?

RH

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Anonymous

June 17, 2008

The sales tax is not paid at the wholesale level but instead is paid at the point of sale.

But the gas tax is paid at the wholesale level.

The transaction costs for sales taxes are higher, but they are also broader–you pay for what you get.

But with tolls they are MUCH MUCH higher (don’t even think about disputing this) and they are also narrower.

Dumber than algae.

RH

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Anonymous

June 17, 2008

“10% which is consistent with your number of $16 per 100.”

No it isn’t. It is 60% more. That is NOT down in the noise.

RH

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Anonymous

June 17, 2008

Look, I don’t doubt that once you go through the toll booth the electronic costs are pretty much the same, except for savings on the enormous volume handled for commercial sales.

But first you have to build and operate, and maintain the toll booth, and that is NOT like adding another cash register at WalMart.

RH

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Bob

June 17, 2008

“Bob sez that the transaction costs for SALES TAXES is the SAME as GAS TAXES.”

Almost. The agency that handles gas tax handles the sales tax. The agency’s overall collection costs is low: 0.55% overhead. That’s particularly good since their main function is to process paper income tax returns more than the sales tax and about fifty other random taxes they keep.

It is easily deducible that if the average is 0.55 and it’s obvious that gas tax collections is less labor intensive than income tax processing, so the cost to process gas taxes is no greater than 0.55. Here is a report in which you can find that to be true.

As has been said, the state gasoline tax is automatically deposited in a state account by electronic bank transfer. No cost. Distributors need to file federal gas tax anyway, so there’s not even any extra accounting cost involved for distributors. Weights & Measures already does pump inspections, so that’s where enforcement would get a clue that there’s a problem worth investigating. No (new) cost. There’s a one-page form that goes with payments that I suppose some bureaucrat needs to file in a drawer somewhere if a random distributor insisted on actually using paper (EFT is mandatory). This is indeed a cost. It is 100% certain that this cost is less than $80 million. You can’t run more than 150 miles worth of toll roads for $80 million. Fact.

The reason is obvious to anyone with open eyes. There’s no “customer service” staff needed. There’s no repair crew to send out when the toll machinery breaks down. There’s no marketing expenses. There’s no lobbyist needed. There’s no need to contract out to a collection agencies. There’s no Board of Directors needed. In short, the gas tax has none of the useless staffing, pension, insurance, and equipment that a toll road requires.

As RH said, it’s not just adding a cash register at WalMart.

“Would you then say that if the transaction costs for sales taxes is higher than for gasoline that sales taxes transaction costs are too high and should be done away with?”

This is a fair point — 0.55% is not too high. 16% is too high. Sales taxes definitely do not make sense for gasoline. They do for other purchases but it brings in different factors related to efficiency.

“the transaction costs for sales taxes are probably very close to the costs for ETC”

No. This is the problem. You are just blindly asserting this without a shred of fact to back it up. Your cash register fantasy has nothing to do with toll collection. You are arguing by analogy, not reality. Stop it. The REAL cost for toll collection at E-470 in Denver is $13 million for $84 million raised. Real cost. Not imagined cost. Not analagous cost. And it’s from a report that YOU recommended. 16% is not 0.55%.

“I have not found a report from any source that cites high transaction costs of ETC. Otherwise.. i still consider your back-of-the-envelope to be just that. It’s clever but it’s incorrect.”

Because YOU are cherry picking. WSDOT says the ETC transaction cost is 16%. Their number, not mine.

You’re not going to find anyone to emphasize that point in a report because the only people who write reports get paid to do so. Sorry, but a fact does not become “incorrect” simply because it has not found in a document produced by the Reason Foundation or a transportation bureaucracy trolling for federal TIFIA cash.

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Larry Gross

June 17, 2008

Your latest “link” to “prove” you assertion proves to me that you know that you not only cannot show what the comparative transaction costs are – but you are cynical about getting caught using bogus data to attempt a misinformation campaign.

shame on you.

Now you say:

“You’re not going to find anyone to emphasize that point in a report because the only people who write reports get paid to do so. Sorry, but a fact does not become “incorrect” simply because it has not found in a document produced by the Reason Foundation or a transportation bureaucracy trolling for federal TIFIA cash.”

Why did you not start out at the very beginning saying you could not determine a comparison before you starting engaging in misinformation implying that you had the “goods” by all these bogus links that you used as whole cloth back of the envelope “proof”?

The fact is that those costs do exist.

Virtually any company knows what their transaction costs are and they work hard to reduce them and virtually all of them have gone to an electronic system that is virtually identical to the systems used by ETC – the primary difference being in the sensors that detect the customer payment info…

The primary difference would be how much the scanners at WalMart cost per transaction verses how much the scanners on an ETC system cost – per transaction.

The rest of both systems is virtually identical and in use at virtually every point of sale location that does business – no matter whether they sell high volumes of items or low volumes.

Even small businesses use these systems now and the reason why is that even though there is a cost to those transactions that in their eyes – it’s worth it.

and you know all of this because this is how you finish:

“You’re not going to find anyone to emphasize that point in a report because the only people who write reports get paid to do so”

so why did you not say this a long time ago – that you did not know?

your assertion that ETC transaction costs are higher than other transaction costs is right where it was many words ago – unproven – despite what I consider a cynical misinformation campaign to “prove” it.

The comparison between gasoline tax transaction costs and sales tax transaction costs WOULD be worth knowing – because Ray has recently switched from supporting the gasoline tax to a sales tax.

Now if he knew that the transaction costs where a lot higher why would he do that?

then you talk about how the sales tax transaction costs are co-mingled with the gasoline tax transaction costs on the State tax website … which prevents you from actually showing the comparison…to back up your prior wrong assertions…

so now.. it’s a “logical” determination that they must be different and one must be less costly..

which is not a comparison of the actual costs and does not begin to show your original assertion that toll transaction costs are way out of line compared to other transaction costs.

you’ve now had your “fool me once, fool me twice” test and guess what – you failed.

You got caught trying to manipulate data… to present a biased view of something you disagree with – rather than an objective pro/con comparison.

apparently the end justifies the means.. right?

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Larry Gross

June 17, 2008

there are two basic problems with the premise about transaction fees.

1. – first is a honest attempt to compare the various transaction fee costs – not only not done but claimed so in a disingenuous, misleading fashion.

An actual objective comparison would have been informative and a valid contribution.

2. -as important, let’s assume that one transaction type cost IS, in fact, significantly higher than another – then who would be the appropriate person to decide whether that higher cost was still justified?

the buyer/customer gets to decide if the total price of a good or service (with the embedded transaction cost) is worth it to him.

So you can have products/services with high transaction costs – but if customers accept the costs in voluntary quid-pro-quo transactions then what’s the beef?

Would you want a system where every transaction fee cost must be disclosed?

For instance, would you make DMV post it’s transaction costs like the State Tax site discloses theirs?

Would you make Exxon/Mobile disclose their transaction fees for a cash verses a credit card or a SpeedPass transaction?

So you might have a toll road disclose it’s fees but you would not decide that a toll road would not be built because you or anyone else thought the transaction fees too high.. as long as the folks who operate the road and the customers who use it find those fees acceptable.

For instance, it does not matter whether DMV transaction fees are 5 times higher than Walmart transactions fees – you are going to pay those fees if you want to drive a car.

why would you not oppose that kind of taxing/funding on the same basis – that it’s transaction costs far exceed it’s tax funding benefit?

this is why I say this whole issue is not about transaction costs at all but really about something else – a fundamental opposition to tolls – the transaction fees just a surrogate… and a bad/unproven one at that.

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Bob

June 17, 2008

“You got caught trying to manipulate data… to present a biased view of something you disagree with – rather than an objective pro/con comparison.”

Seriously, what are you smoking? Answer these simple questions:

– Did it cost $13 million to collect tolls for a year on the E-470 in Denver, Colorado?

– Did the Washington State Department of Transportation not calculate the operational costs of tolling for this road at 16%?

– How is it possible for the Virginia Department of Revenue to collect $900 million in gas tax revenue at an efficiency rate greater than 16% with a budget of only $80 million?

No changing of the topic this time. You accuse me of manipulation and lying, so please have the courtesy of providing direct answers to the above three questions.

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Bob

June 17, 2008

Blogger burped and published an earlier draft of my post. The more precise questions:

– Did it cost $13.2 million to collect $84.5 million in tolls for a year on the E-470 in Denver, Colorado?
(WSDOT did not add together toll collection and toll collection system maintenance, both of which are toll only costs. The two together give $13.2 million)

– Is 13.2 sixteen percent of 84.5? (rounded)

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Larry Gross

June 17, 2008

Bob – that is not what you were claiming to “prove”.

Your premise was that tolls are wrong/immoral/etc because the transaction costs are “too high” compared to taxes on gasoline.

and I asked .. for a comparison.

and your answer was to show some selected data on some tolls instead of industry toll data in general and then you pointed to the State Tax website – which is totally bogus..as the State does not calculate the transaction costs at the point of sale or even the point of tax – but only THEIR processing costs – their INTERNAL costs which is going to be the same because they start the count at the point when the money comes into the door.

Look at the categories of their costs – none of them relate to the SOURCE of the taxes.

Why did you claim that their data “proved” that toll transactions costs are higher than gasoline or sales taxes when you can’t even show the difference between sales and gasoline taxes?

Wrong. Wrong and MR. WRONG – Bob.

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Bob

June 17, 2008

Answer my questions. You made a personal attack. Either back it up, or take it back — stop trying to change the subject.

1. How much did it cost to collect tolls on the four most modern, efficient toll roads in the country? How many millions did they collect in total on 112.5 miles of road?

2. How much did it cost to collect the gasoline tax in Virginia? Hey, I’ll even stipulate that it took the ENTIRE budget of the Virginia Department of Revenue to make the collection, for the purpose of comparison. How many millions were collected?

Those are the amounts collected; those are the costs of collection. That is apples to apples comparison when you’re talking about comparing these two forms of revenue collection.

Since I’m a nice guy, I’ll even provide the answer key:

1. $297.4 million was collected after spending $65.3 million in collection and collection system maintenance. That’s 21.9% efficiency. (These roads are the best of the breed. If I were cherry picking, I’d use the Pennsylvania Turnpike or another bloated east coast road to highlight inefficiency. Trust Reason Foundation: E470 is the single best example of a modern ETC-only toll road at 15.6%)

2. $912 million in gas tax was collected. The ENTIRE budget of the Virginia Department of Revenue for FY07, excluding the research department, was $80 million. That’s 8.7% efficiency.

Put up, or shut up.

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Bob

June 18, 2008

My post elsewhere about Heritage led me to a report with the definitive answer. As a result, I must start by apologizing for being in error. I claimed that the gas tax was collected by the Department of Revenue at an efficiency rate of 0.55%. This is incorrect. The Department of Revenue only collects the NOVA gas tax.

The Department of Motor Vehicles, Motor Carrier Services collects the state gas tax (here). Its efficiency rate is 0.87%, imperceptibly better than the nationwide rate of 0.88%.

Specifically, in 2007, DMV-MCS collected $870,867,000 in state gas tax after spending $7,545,000 to collect those motor fuel taxes and fees. Nationwide, it cost $321,057,000 to collect $36,278,026,000. Source: FHWA Highway Stats 2007, Table MF-3.

There is a bit more of a licensing bureaucracy involved than I imagined, and lots of miscellaneous things are taxed — alternative & aviation fuels, etc. that make things a bit more expensive to operate. Thus, I was off by 0.32%.

So there you have it. $7.5 million is the exact number you desired. For that exact amount of operating budget, you can run 10 miles of HOT lanes (that’s the exact, to the dollar, cost of tolling system collection on the 91 Express Lanes in Orange County, California). Good luck funding the state’s needs with the $25m in net revenue you get from those 10 miles.

—
Just to be double-check to make sure this number is reliable, the ENTIRE budget for DMV-MCS is $22,503,112. That’s for administering fuel tax and truck licensing, truck inspections, etc. So it’s quite reasonable.

Random Bonus Trivia: There are 2,813 fuel suppliers and distributors in Virginia. Virginia conducted 13 fuels tax audits in 2005. There were 27,889 fuel tax transactions (the tax is applied as soon as gas leaves the terminal, not monthly like every other state).
Source: DMV Strategic Plan pdf

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Larry Gross

June 18, 2008

I’ll give you this – you ARE a bit of a whiz in tracking down data…

Kudos!

but I still think you are a way too quick on the trigger and make mistakes in logic IMHO and yes I still think that your use of data amounts to cherry picking and manipulation to serve your agenda and not present an objective pro/con view.

I don’t dispute the data you present – I dispute the conclusions that you draw from it.

comparing the cost data for collecting tolls to the State processing of taxes is a wrong comparison.

You’d have to show the costs incurred in calculating the PAYMENT of the gas tax – from the companies that have to do this -as a cost of business necessitated by the law requiring them to do so – to prove you point.

and you don’t have that data and using the State data for tax processing in general would be like looking at the state processing of taxes on the toll roads …

you’re comparing apples and oranges and claiming they are the same and they are not.

And it does not matter in the bigger picture ANYHOW how much more it might cost to collect tolls that it does gasoline taxes just as it does not matter in the bigger picture if collecting sales taxes are not as efficient as gasoline taxes.

Just as it does not matter if the DMV transaction costs might be 10 times higher than ETC transaction costs.

What matters is if they are within an acceptable range for collection costs for most taxes.

The difference between gasoline and sales taxes is very probably similar to ETC and gasoline taxes and it is my view that you’re dealing in a “noise” range to start with.

If you were able to show all 3 side-by-side for instance, you might have something worth considering especially if the choice in Kaine’s budget is between sales taxes and ETC.

If 50 states find collecting sales taxes acceptable even if it costs ..say twice as much as gasoline tax – but still within an overall acceptable range – it will be done.

That’s the bottom line that matters. And if ETC rates are similar to sales tax rates – what argument would be made against them?

Your data diving does not prove anything more than.. if you were claiming that sales taxes are unfair/immoral/wrong because it costs more to collect sales taxes than gasoline taxes.

or a bigger picture that, in your mind, the best taxes are the ones with the least collection costs …and further than any taxes that cost more to collect than the most efficient taxes are wrong/immoral/unfair/etc.

In your mind – yes but in the minds of public officials who do it across every state and many individual localities AND the people who pay taxes via that method – it is acceptable.

Similarly, TOLL ROADS, even MANUAL collection TOLL roads ARE acceptable to virtually every state and certainly every person who agrees to pay the toll or else they would not exist.

Further, Mary Peters, the Heritage Foundation, the Cato Institute, and dozens of other think tanks and hundreds of elected and public officials believe that the transaction costs of toll roads – even if they are higher than gasoline taxes – is acceptable.

Your view that because the toll costs are higher than gasoline taxes – even if you “prove” it – rigorously – is NOT a relevant reason to not build toll roads.

Your complaint about the transaction costs is a lot like your complaint about “diversions” and waste and spending money on things that you don’t agree with.

If Toll roads have existed for a hundred years and were operated with manual collection methods and those methods even with very high costs were deemed to still be worth it AND customers AGREED….

then why in the world would making a case against ETC – which is much more cost effective than manual collection make any kind of a dent in the argument about toll roads anyhow?

Why in the world would anyone pick THAT particular aspect to make a point that ETC TOLL Roads are not “cost effective” when clearly the industry thinks they are – and much more cost effective than manual collection toll roads.

Transaction costs for toll roads do not put them in a range that is beyond an acceptable range for other taxes..

and that’s the bottom line here..

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Larry Gross

June 18, 2008

I separate this post from the others to make sure that I deal up front with Bob’s view that he was personally attacked.

If I engaged in a personal attack in Bob’s or anyone else’s mind – I Apologize.

I still do not agree with the way that Bob deals with data to support his assertions but will redouble my efforts to stick with the data and not the person.

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Anonymous

June 18, 2008

“You’d have to show the costs incurred in calculating the PAYMENT of the gas tax “

Congrats, Larry, you are picking up on the systems approach after all.

Still, this one is so far out of the box, it isn’t worth doing a detailed comparison. I’d have to go with Bob on this.

Suppose you are right and the idea is to calculate the entire cost.

Cost of tolls = cost of collectiong tolls + cost of paying tolls.

Cost of sales tax = cost of collecting sales tax + cost of paying sales tax.

Cost of paying tolls is keeping your EZPASS active, and keeping money in the account, stopping at toll booths when you don;t have an eaz pass, etc. Cost of paying sales tax is the extra fraction of time it takes to calculate and count/handle all those pennies. Plus whatever stuff I haven’t thought of.

Cost of transportation funds = cost of tolls + cost of sales taxes.

Well, you already have sales/gas taxes, so adding tolls raises the price of collecting transportation funds.

QED.

RH

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Larry Gross

June 18, 2008

Ray – You ALREADY HAVE TOLLS.

The question is can you collect MORE money with more tolls…

and the answer is yes you can.

and what you and Ray are saying, in essence, is that ..no you should not because collecting tolls is not cost effective…

and the facts say otherwise…

just because tolls cost more to collect than gas taxes does not mean it is not cost-effective to collect tolls….

If you never had a single toll booth or no existing examples of ETC – your argument might have merit but the reality is they already exist, are in use, and a large number of government officials consider them cost effective enough – certainly within the same cost range of sales taxes to be considered as a source of funding.

The cost of collection argument is arguing in the noise level BETWEEN the different kinds of taxes.

If it cost a dollar to collect a dollar then yes.. you’d have a big issue..

but what it costs is much more like what it costs to collect the sales tax… so your argument is moot…

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Anonymous

June 18, 2008

“Ray – You ALREADY HAVE TOLLS.”

Why are we still installing them then?

It does not matter if the costs of collection are equal. You could collectt the same additional money with the EXISTING sales tax at little increase in expense. So adding tolls is ALWAYS more expensive.

Look at the equations. Argue with them, not me.

RH

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Bob

June 18, 2008

“You’d have to show the costs incurred in calculating the PAYMENT of the gas tax – from the companies that have to do this -as a cost of business necessitated by the law requiring them to do so – to prove you point.”

Why do I have to show this? You toll proponents are so quick to say, “Charge the motorist whatever the market will bear!” Why the sudden concern for the cost to the public? This is transparently an argument of convenience.

“and you don’t have that data and using the State data for tax processing in general would be like looking at the state processing of taxes on the toll roads …”

Haven’t not learned your lesson yet? In fact, I do have the data. I’m still processing it in my brain because it’s a bit complicated. Nationally it’s .50%. Virginia offers an automatic 0.5% discount on the tax to account for fuel evaporation in the tanks and the cost of compliance. So the total net cost of collection to the public is not going to be more than ~1.5%. This is ten times more efficient than the best ETC (electronic toll road).

As RH points, it is an unfair comparison since we aren’t including the cost of end-user compliance for the cost of tolling. Apples-to-apples is 0.87 to 15.6.

“The difference between gasoline and sales taxes is very probably similar to ETC and gasoline taxes and it is my view that you’re dealing in a ‘noise’ range to start with.”

No it most certainly is not. In fact, the data suggest the possibility that sales tax collection may even be more efficient than fuel excise tax collection simply because sales tax collection doesn’t involve the complicated jobber and distributor licensing costs. More precise data is needed, but the existing facts are clear. There is NO EVIDENCE that sales tax is anywhere close to the inefficiency levels of ETC. None. Zero. Zilch. Department of Revenue’s average collection cost (income + sales & misc. taxes) is still 0.55%.

“Further, Mary Peters, the Heritage Foundation, the Cato Institute, and dozens of other think tanks and hundreds of elected and public officials believe that the transaction costs of toll roads – even if they are higher than gasoline taxes – is acceptable.”

Ask yourself — since it is established that tolling is inefficient, who is the beneficiary of that excess money collected by tolling? Mary Peters worked for HDR, a toll road company. Her predecessor, Norm Mineta, was VP of a toll road company. Heritage and CATO are funded by toll road companies. Of course they find acceptable a course of action that increases the profit of their friends and benefactors.

Here’s a concrete example of transaction costs that are outrageous and unacceptable. NYC just launched a database that lets you look up every state contract (imagine if VA had this!). here:

$202,500,000 for ACS — Norm Mineta’s old company — to run the “E-Z PASS NEW YORK CUSTOMER SERVICE CENTER”. It’s a 10-year contract.

So what’s of more use to the public? How about $200 million in new roads. Heck, even a $200 million downpayment on a useless transit system would be better. Why? Because the only reason you need a massive complaint hotline is because you have a lot of complaining customers.

In the many years I’ve driven I-395 every single day, I have not once felt the urge to call a “General Purpose Lane Customer Service Center.”

You don’t need one on a freeway.

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Anonymous

June 18, 2008

” A tax on coal, oil and gas is simple. It can be collected at the first point of sale within the country or at the last (e.g., at the gas pump), but it can be collected easily and reliably.”

Jim Hansen

RH

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Larry Gross

June 18, 2008

Folks, I never ever claimed that the virtue of toll roads was a more efficient way to collect money.

I simply said that it is not proven that they are “too inefficient” compared to other methods of collecting revenues.

I asked for some level of COMPARISON between tolls and other taxes that would clearly establish that tolls were the worst by far.

You’re running around like a hamster trying to figure out what the companies and states that do tolling have already figured out and already concluded that the cost of collecting tolls is acceptable.

Your basic theory seems to be that all of these folks have committed a gigantic error either through group stupidity or evil conniving.

In order to do a fair comparison -you would have to compare the total costs of the infrastructure used to collect sales or gasoline taxes with the total infrastructure used to collect tolls.

When you accomplish this – get back in touch.

but like I said.. unless one wants to believe that no one in the public sector has done some level of due diligence on this issue, one would have to believe that all of them.. elected, professionals, think tanks, governors.. all of them were so inept and stupid as to foist an unfair and inefficient system on people.

so .. in a way ..we’re back to the same old same old – “government is stupid and inept”…

however.. the same stupid and inept government that collects sales and gas taxes is TOO stupid and inept to do tolls….

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Larry Gross

June 18, 2008

Let me give an example of a method of tax collection that is NOT cost effective and for that reason it has NOT been implemented even though it is an even better and more fair way to allocated costs to drivers

.. and that would be the GPS metering technology that has been reported and discussed including in this blog.

.. We know – that the costs for implemented this would initially, at least, be very high unless and until it can be done in a much less expensive manner.

..tolls, OTOH, have been around for years and years.. on the Powhite Parkway and the CBBT, New Jersey Turnpike, etc.. and even with manually collection were consider acceptable.

..when ETC came along, it has been demonstrated to be much more efficient – despite the fact that the initial technology was expensive (just as Walmart scanners where initially expensive)…

..If we were willing to accept manual collection toll roads…

then why in the world, with the advent of ETC..would we now, at this point – say that toll roads are not cost-effective?

It just does not follow.

Toll Roads – around the world – and in more than 20 states are converting to ETC.

The CBBT and Powhite Parkway are converting to ETC

How can one make the argument that after converting – that ETC is not cost-effective if they are at least an order of magnitude more efficient that the previous manual collection?

I’ve asked both Bob and Ray about the CBBT – should it be tolled or should it be viewed like these guys say they view “Montana or RoVa” roads and neither of them have shed much light on the issue other than to say that the CBBT is a “special case” without really explaining why it is.

It would seem that the CBBT – and it’s beneficial effect on the Eastern Shore would make it ideal as a gas-tax funded road since it fit’s quite well the basic “roads benefit all” premise that Bob and Ray seem to support.

It would also seem that using Bob’s methodology that we should immediately – either shut the CBBT down and pay off it’s debt with gas taxes and let it operate as a “free” road.

After all ..why should we provide “free” roads for Wise Va but not for Cape Charles, Va.

What is the difference why we toll one and not the other?

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Bob

June 18, 2008

“In order to do a fair comparison -you would have to compare the total costs of the infrastructure used to collect sales or gasoline taxes with the total infrastructure used to collect tolls.”

Talk about moving the goal posts! Since when have you cared about total infrastructure cost of tolling? NOT ONCE. In fact, when I’ve brought up total infrastructure cost issues in the past (eg., the cost of financing, extra right of way, etc), it has been dismissed as irrelevant.

Sorry, that doesn’t wash. The question is: what should be the government’s policy for collecting money for roads. No matter how you slice it, toll roads come up short by factors of anywhere from 10 to 30 or more. Ice cube vs. iceberg as RH said.

“then why in the world, with the advent of ETC..would we now, at this point – say that toll roads are not cost-effective?”

Because we do not need to guess the cost of ETC. We know the cost. That cost is $15.60 to collect $100 in revenue.

“How can one make the argument that after converting – that ETC is not cost-effective if they are at least an order of magnitude more efficient that the previous manual collection?”

Because the old Turnpikes collect at absurd efficiency rates like 30% and 40%. The drop from 40% to 15.6% is indeed impressive. But it is absurd to waste 15.6% of revenue when you can collect the money with a loss of only 0.86%. The Reason Foundation report you linked to a while back compared (with understandably imprecise figures) the entire range of Old Scool toll roads to the new ones like E470.

“It would also seem that using Bob’s methodology that we should immediately – either shut the CBBT down and pay off it’s debt with gas taxes and let it operate as a “free” road… What is the difference why we toll one and not the other?”

Yes. Free road. But I am completely unfamiliar with any particular details regarding CBBT. The only time tolling is ok is when a private company buys its own land (without eminent domain, public capital, tax free bonds, etc) and sticks up a toll booth. It’s their land, let them do with it as they please. Such roads should also have no cops or speed limits. (The closest one I can think of is Summit Point Raceway in WV… I think VIR in Danville might be on the public dole.)

Finally, the fact that government bureaucrats think something is a great idea is actually pretty decent proof that it’s not.

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Larry Gross

June 19, 2008

I still dispute your so-called “analysis” of comparing toll road collection costs with gas or sales taxes.

How much does it cost to collect sales taxes at the point of sale?

How much does it cost to collect the gas tax at the point of (wholesale) sale?

Those costs are – just like the toll road costs – borne by the operator of the enterprise who has to perform the labor of collecting the tax – not the state taxation folks who receive the receipts after they have been collected.

Only if the State Dept of Taxation was ONLINE to every single POS collecting the tax in real time could you claim their transaction costs and I can guarantee you that if that is what their system was doing that those costs would NOT be the ridiculous .68 you continue to claim.

Instead, the companies themselves have to collect the tax and produce the reports that accompany the receipts send to the Dept of Taxation.

If you wanted to do an HONEST comparison – you would have to compare the operational costs of each enterprise collecting the transactions…

Every 7-11, every WaWa, every Kohls, etc..

EACH of them has costs in processing each transaction at each POS.

It is THOSE COSTs that you’d have to compare to the transaction costs of the ETC to be able to have comparative data.

I should not have to explain this.

I will again presume that you made an honest mistake but I have to tell you.. there is a pattern that I find nettlesome.

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Bob

June 19, 2008

“I still dispute your so-called ‘analysis’ of comparing toll road collection costs with gas or sales taxes.”

On what basis? The government collection cost for gas tax is fact. The public-private toll collection cost is fact. Cherry picking means discarding facts that are inconvenient to preconceived notions. I would hope that is not the case here.

“How much does it cost to collect sales taxes at the point of sale?”

Why do I need to defend the sales tax? There’s no logical reason for me to do that. I can sit here and assert that the fuel excise tax is the only way to fund roads, and leave it at that. It’s a wholly consistent and reasonable position. Except I am curious now how excise and sales compares, so I’ll do some digging out of curiosity.

“How much does it cost to collect the gas tax at the point of (wholesale) sale?”

Nationwide, it is 0.5%. I haven’t had a chance to dig further. I think it’s slightly higher (possibly ~.8) in Virginia since our idiotic state is the only one to process transactions instantly, not at the end-of-month.

“Only if the State Dept of Taxation was ONLINE to every single POS collecting the tax in real time could you claim their transaction costs”

DMV-MCS transactions are online, and all transfers of cash MUST be electronic (EFT). Every state mandates this.

“EACH of them has costs in processing each transaction at each POS. It is THOSE COSTs that you’d have to compare to the transaction costs of the ETC to be able to have comparative data.”

Ok. Let’s review:

Cost of state collection + Cost to fuel dealers in payment/paperwork vs. Cost of toll road collection + Cost to motorist to maintain a transponder

0.86% + ~.8% < 15.6% + X This equation is true without solving for X. This equation is true whether the cost of the state’s fuel dealers in making transactions is 0.5% or 0.8% or anything under 14%. And let me tell you about X. There are tons of monthly fee requirements and complications that make it very expensive to have a transponder if you’re only an occasional toll road user. If you’re paying with a credit card and you’re an idiot, you might float your balance on a 25% interest rate. These are all end-user costs and they’ll all vary among the millions of drivers in Virginia. It’s rather pointless to think you could capture X. Since you find it so hard to believe, how about a real example. Take the Beltway toll lanes. It’s $1 per mile during rush hour. It’s a 14 mile road. That’s $14 in the morning and $14 in the evening, or $28 per day. Five days a week, 50 weeks per year. That’s $7,000. Now what if, instead, we raise the gas tax by 50c from 17.5 cents ($900m/yr) to 67.5 cents ($2.5b/yr). That raises $1.6b in new money each year. That’s the cost of the Beltway lane construction in ONE YEAR. Wham, it’s paid off. Next year, we can build something in another district, in cash. Or build 30 projects simultaneously by leveraging the money with finance for statewide benefits. Cost to the end user? I do 50 gallons of gas per month. Another 50 cents means I’d pay $25/month, or $300 per year. $300/yr or $7,000/yr. Not enough cash for projects to make ROVA happy? Make it $1. It doesn’t matter. The math still works. The ripoff factor here is so massive (10:1 minimum) that it can’t be hidden, no matter how hard you try.

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Larry Gross

June 19, 2008

“I can sit here and assert that the fuel excise tax is the only way to fund roads, and leave it at that.”

You can do that and you’ll be wrong if there is no feasible way to increase the gas tax and the choice is between raising the sales tax or tolls or other “inefficient” ways to finance new roads.

Even with the gas tax – you STILL are not providing the POS cost data for neither the state nor the fed tax.

The cost of collecting the tax is borne by the companies that have to do it and then they deliver it as a single payment to the Dept of Taxation.

That payment that they send – represents hundreds, thousands of transactions that they had to pay to process,, and account for in computing that payment to the state.

The number you keep quoting is the the cost for the Dept of Taxation to process the PAYMENT from the company that represents the total of it’s various transactions.

This is why the Dept of Taxation “costs” are not categorized .. it’s because ALL of their transactions are ALL the same… processing RECEIPTs regardless of their source.

they are reporting their costs of processing payments – not the transactions that produced the taxes.

Compare to your own efforts to compute the tax you owe and then you send the paperwork with your check. It costs you time to go through the record keeping and computations… multiply this by hundreds of thousands of transactions that a business has and has to account for.

This is the real cost of those transactions .. this is the cost that you are not accounting for and claiming that the state’s simple processing of the check received is the processing costs.

Do you not understand this?

your “data” continues to be your own wrong views on how the process actually works…

You need to get yourself down to a tank farm.. and talk to the folks about how they pay the tax on the gasoline that they purchase and distribute.

I admit.. I don’t know the cost but it’s clear that you not only don’t know either – but you don’t even know that that’s where the transaction costs are – either.

That’s were the cost of processing the gas tax is…

NONE of this MATTERS ONE WHIT

ANYHOW

if the State determines that other less efficient means of collecting other kinds of taxes – still “works” for them.

and my point about the sales tax is that it is very probably just as “inefficient” as tolls are and yet.. the sales tax is ubiquitous and there are millions of transactions ..each one has to calculate the tax, store in in their electronic records …etc..

and if the gas tax no longer “works” because of high gas prices… and the State has decided to abandon it as a source of new revenues – which they appear to have done –

your argument is MOOT

Kaine’s current budget proposal seeks to do just that with a sales tax increase (instead of a gas tax increase) so your argument about the cost advantages of the gas tax mean what?

NEXT –

if the gas tax is no longer being considered for NEW/additional revenues for roads…

between the sales tax and tolls – which of these is closer to the gas taxes original premise of “user pays” from the people that actually use the roads?

Ray has abandoned the “driver pays” philosophy.. now he is advocating that we tax everyone because everyone benefits – not proportionality to paying for what you use… no matter.. if you exist .. you get benefits from roads – so you pay.

You pay the same if you are retired and don’t drive as the guy who drives everyday solo at rush hour… there is no difference…

The retired guy who buy’s $100 worth of insulation at Home Depot will pay the same for roads as the guy who buys a $100 worth of lattes at Starbucks.

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Larry Gross

June 19, 2008

“Now what if, instead, we raise the gas tax by 50c from 17.5 cents ($900m/yr) to 67.5 cents ($2.5b/yr). That raises $1.6b in new money each year.”

Is this statewide Bob?

Tell me who has lined up in the GA to support this?

How about you figure out how much the gas tax increase would have to be in NoVa to pay for what NOVA needs since most of RoVa needs are minuscule in comparison and besides, I thought you were in favor of NoVa paying for RoVa’s roads anyhow.

I’m sure RoVa would sign on to taxing the bejesus out of NoVa to solve the statewide funding problem.

Bob – you’ve got the same problem that Ray has – your ideas won’t fly politically and the problem is to find a path that will fly politically

and here’s the bottom line

if at the end of the week of June 23 – there is no agreement in the GA about new taxes – the DEFAULT condition will be for all of Virginia -whether it be RoVa, NoVa or TW/HR – if you want new roads they will be toll roads.

So the week of June 23 will be your chance to see how many folks in the GA will support a 50 cent gas tax increase.

Good Luck!

do you have a “plan b” is that idea fails?

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Bob

June 19, 2008

First it was moving the goal posts. Now it’s jump to the conclusion to show the premise must be irrelevant.

Enough with the dodges, games and distractions tossed in from out of nowhere to avoid the inconvenient truth that arises unavoidably from conclusive data. Answer this question:

Is it or is it not eighteen times more expensive for the Virginia state government to raise its revenue with a modern, all-electronic toll road like E-470 in Denver than it is to raise revenue with a fuel excise tax?

The other issues are worth exploring, but one step at a time.

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Larry Gross

June 19, 2008

It’s not cheaper if it is not politically viable.

It’s a non-starter.

It’s not cheaper if your road needs require 50 cents worth of gas tax instead of a nickel and there is no realistic way to achieve that level of revenue.

You are so far down in the theoretical weeds here.. that you’re not even away of the practical realities.

Your statement could be..true if you preface it with “In theory….”

agree?

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Jim Bacon

June 19, 2008

Bob and Larry, I’ve been following your thread, and I generally agree with Larry on the value of congestion tolls. But anyone who looks at the facts has to concede that it’s not all cut-and-dried.

I think we have to admit Bob’s point that the cost of collecting toll revenues is significantly higher than the cost of collecting gas tax revenues. I think it’s also fair to say that steadily improving technology will bring down the collection costs over time — maybe not to the point comparable to the gas tax, but to a lower level than is generally the case now.

While I would concede that point, I think Bob needs to concede the point that the gas tax is living on borrowed time. Almost everyone acknowledges this — it’s viable for another 10 years, 15 years tops. Why dispute it? At some point, we have to devise a replacement.

What will that replacement be? A Vehicle Mile Driven tax — using GPS technology that would dovetail beautifully with tolling.

Meanwhile, congestion tolling does two things that gas taxes don’t: (1) they limit traffic to a level consistent with maximum throughput, thus *increasing* peak load capacity, and (2) they allocate scarce highway capacity to those with the greatest need and/or ability to pay.

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Bob

June 19, 2008

Larry Gross: Answer the question. The numbers are real. There’s nothing theoretical about them.

Jim Bacon: “I think Bob needs to concede the point that the gas tax is living on borrowed time.. Why dispute it? At some point, we have to devise a replacement.”

You could have said the same thing about tolls in the 19th Century. “We’ve been collecting tolls for 400 years; one day we’ll have to devise a replacement.” And we did. That was a movement from an inefficient tax method to a more efficient one. To return to the medieval method is backward in both respects.

I find all the arguments that the days of the gas tax viability sound good, but don’t hold up to scrutiny. The argument that gas prices will drive down revenue has proved false. Electric cars today have little more range than the very first automobiles that were electric. It’s hard to beat the bang-for-the-buck that gas gets you.

And if someone figures out how to run cars on water (you know, the same day that flying cars become a reality), we might as well just fund roads from the sales tax. Only 95% of the VA population doesn’t have a car — so that’s close enough.

A “vehicle miles driven tax” doesn’t give you anything the fuel tax doesn’t already provide. Whatever car you own, the more you drive, the more you pay. There’s no way around that. There’s even a built-in punishment for driving a Hummer, and rewarded for driving a Toyota Pious. What’s not to like?

As for congestion tolling, you are ignoring the effect it would have on the transportation network as a whole. You charge $14 to drive on the Beltway, but people still need to get to work in the morning. So where do people end up? Route 123, Route 7. These all become jammed. Do you toll the side streets (like Dallas proposed to do)?

If you want to ensure maximum throughput for those with the most ability to pay — and are therefore the most worthy — there’s a much simpler way to accomplish this.

Just ban all cars except Rolls Royce, Aston Martin, Porsche 911, and BMW (but not the 3 series).

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Larry Gross

June 20, 2008

I’ll concede the point – with the proviso that we get a correct number for the gas tax and for Bob to concede that the number he was using for the Dept of Taxation is not a correct number since the assertion is that the cost of collecting tolls is being compared to the cost of collecting gasoline taxes and the Dept of Taxation does not pay those costs for either source.

To argue that the gas tax days are not numbered though is ignoring overwhelming and ample evidence to the contrary.

It’s that knowledge, that is affecting public policy that is gravitating towards tolls – not dumb/corrupt/inept public officials.

I think there is fairly general agreement that the gas tax will not “die” but it’s ability to generate revenues will probably, at best, be limited to what is needed for maintenance.

And for me -that has been the essential premise from day one.

The question on the table is how will new roads be funded.

It’s not my question.

It’s the same question being asked across the country by virtually anyone who is involved in transportation.

My support of tolls is NOT because I think it is more efficient to collect than gasoline and not because I think it is a choice between taxing gasoline or using tolls…

.. it’s because .. Tolls is “plan b” unless and until – a better “plan b” (such as JB’s mileage metering) comes to the fore.

Finally – from a general public policy perspective with respect to the merits of utilizing the most efficient means to collect taxes in general verses using methods that are not as efficient would be an interesting thread if the data were valid and useful.

And just to point out something ancillary – “inefficient” tax collection means what?

well it means that you are paying for products and services as a cost of collecting those taxes – i.e. that money does not go away in a bonfire.. it actually creates jobs.

so you say.. that’s not the right way to look at it right?

well.. take a look at why NoVa is an economic powerhouse and tell me that all those wasteful government jobs do not benefit the economy.

🙂

Bob – can we agree to disagree?

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Bob

June 20, 2008

“To argue that the gas tax days are not numbered though is ignoring overwhelming and ample evidence to the contrary.”

What evidence? Please, I’d love to see some beyond the statements of those hocking policies for their financial benefit. This is something consistently asserted as an article of faith without anything concrete to back it up beyond vague predictions of future technology adoption.

“It’s that knowledge, that is affecting public policy that is gravitating towards tolls -“

Why is it so hard to believe that the documented, cozy relationship between tolling interests and public policy makers might have an influence on their judgment? It’s already gospel on this site that the real estate lobby runs the show in Richmond.

“That money does not go away in a bonfire.. it actually creates jobs.”

…in Australia.

“Bob – can we agree to disagree?”

I find most of your posts in response to EMR to agreeable, actually. As for the gas sales tax number, I’ll try to see if Dept of Revenue will send me their actual budget spreadsheet.

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Anonymous

June 20, 2008

“Ray has abandoned the “driver pays” philosophy”

I never had it. My philosophy was always that the benficiaries should pay. That includes nondrivers, people who ride the bus, peoeple who call the fire truck or ambulance, developers, homeowners, and a lot of other people besides just auto users.

Most of those people are auto users anyway, so it doesn’t matter very much how you collect the money, as long as the collection method is cheap.

You still have the problem of allocating how to spend the funds. Roads are closely associated with commerce, so spend the moey where it will do the most good – irrespective of where the money comes from.

RH

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Anonymous

June 20, 2008

“borne by the operator of the enterprise who has to perform the labor of collecting the tax – not the state taxation folks who receive the receipts after they have been collected.”

Wrong. It’s a cost of doing buisness and the customer pays whatever is not deductible.

RH

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Anonymous

June 20, 2008

they limit traffic to a level consistent with maximum throughput,

What incentive has the operator to do this, if maximum throughput isn’t the same as maximum revenue?

We have plenty of highway capacity: it is only that it is in Farmville instead of Fairfax. Tolls are solving the wrong problem or using the wrong tool to solve the right problem – take your pick.

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Larry Gross

June 20, 2008

re: What evidence? Please, I’d love to see some beyond the statements of those hocking policies for their financial benefit.

The stock reply seems to be that anyone who believes that the gas tax days are numbered has a conflict of interest, is stupid, corrupt or conniving.

It would seem that nowhere in your calculations can it possibly be that honest people of good morals looking at real data believe differently than you i.e. they MUST be evil.

I gladly invite debate on the merits – I think debate is how better mutual understandings can be arrived at by all parties but I eschew attributing pejoratives to entire industries, entire groups of people.. professions, elected officials, etc.

One person or even a group with an agenda can and do deal dishonestly with issues but not entire diverse groups unless one is seriously into conspiracy theories.

Let me say again. There is no way in heck that ALL of the people involved in public policy transportation issues – who believe the gas tax is in trouble as a revenue source…

are.. evil, dumb, corrupt, crooked, conniving or even ugly and have bad breath….

one guy or a group with an agenda – yes – but thousands of people with diverse backgrounds and interests – no.

it is an honest consensus based on real data that the gas tax has not kept pace with construction costs even when indexed because if the sales of gasoline declines – you don’t need to be a rocket scientist to understand what happens to revenues.

The “evidence” is not in dispute unless you believe that the folks doing the reporting are lying:

“The report, Drivers Turn the Corner in the United States, conducted by CERA’s global oil service predicts that U.S. gasoline demand will likely decline in 2008 for the first time in 17 years. If petroleum prices stay at or near their current levels, 2007 could prove to have been the peak year for U.S. gasoline demand.”

http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDetails.aspx?CID=9568

Now.. the next thing that normally will happen when I present things like this is Bob will then impune the character of whoever has been quoted…

In this case – CERA – Cambridge Energy Research Associates, Inc. will be dismissed as an Industry mouthpiece .. who stand to make a profit from releasing such heretical information…

The “evidence” Bob IMHO is pervasive and overwhelming… no matter who the message is coming from…

after a while.. impugning one messenger after another gets to be a pattern of just rejecting information that one disagrees with rather than recognizing it as – “evidence”.

I agree to disagree.

you are entitled to keep on with your conspiracy theories but it does not become you.

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Larry Gross

June 20, 2008

re: Rays support of the gas tax.

really? truly?

seems like I remember the discussion as being that if cars pay the gas tax -that the revenues should go to roads.

Isn’t that the idea of a “lockbox”?

How would you do a “lockbox” for the sales tax?

How much of the sales tax do you think “belongs” in a “lockbox” for roads?

re: “Wrong. It’s a cost of doing buisness and the customer pays whatever is not deductible.”

always true – no matter what.

so what?

Do you not buy something somewhere as an objection to the embedded transaction costs?

You do not.

You base your decision on whether or not the product or service is “worth” the price of it – a voluntary quid pro quo transaction.

What would you do?

would you have it a law that EVERYONE who sells a product or service fully disclose to you the embedded transaction costs?

Do you want the toll road folks to be required to post next to their tolls that part of your toll is 15% for transaction costs?

do you think this would change the numbers of people who would voluntarily agree to the transaction?

what is the point that you are trying to make?

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Larry Gross

June 20, 2008

Alright Bob – This is a GIFT!

“A second advantage of fuel taxes is their low administrative and collection costs.

Historically these costs have averaged around one-half of one percent of tax proceeds (Crawford
1939; Highway Statistics 1945-1995). The gas tax is collected directly from gasoline distributors
— rather than from retailers or motorists — which helps keep collection costs low and reduces
the potential for payment evasion.”

And I want you to remember two things:

1. – I WILL provide objective data even when it does not buttress my own arguments. I am fair in that regard.

2. – with a certain amount of smugness – why didn’t you find this?

🙂

Oh and this .. from the same report:

“When fuel taxes were first implemented in the 1920s, they were chosen as the most
practical way to charge drivers for use of the road system. Policy makers saw universal tolling as
the ideal user fee, but acknowledged that widespread toll collection was impractical.”

you’re welcome.

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Bob

June 20, 2008

“with a certain amount of smugness – why didn’t you find this?”

Ha! Because you would have accused the data of being too old. 🙂 My 2007 number is 0.88, not 0.50, by the way.

“The stock reply seems to be that anyone who believes that the gas tax days are numbered has a conflict of interest, is stupid, corrupt or conniving.”

No, that’s not my argument at all. It is to challenge those who proclaim the end is nigh for the gas tax to produce evidence. The usual response to my question has been, “Mr. X says it is going to end.”

I point out that Mr. X is a former, current or future employee of a toll road company. That’s entirely appropriate. It doesn’t follow that everyone who likes tolls is on the payroll, just the ones who are most commonly cited are DEMONSTRABLY on the take.

I have checked current gas tax revenue for two separate states. Gas prices are double what they were a few years ago, yet year-to-date revenues are up, not down. Toll revenues, on the other hand, are significantly down on most of the major roads I’ve looked at (Chicago Skyway, Indiana Toll Road, etc). In fact, check out the stock charts for Transurban and Macquarie — their shares have plunged partly as a result of (a) investors figure high gas is bad for tolling and, (b) their ponzi scheme business model has been publicized.

So my skepticism is firmly rooted in reality.

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Larry Gross

June 20, 2008

Just FYI – Bob –

I readily accept 2007 data over any “roll your own” data…

If you use an authentic source, I’ll usually accept it as fact and almost always if it is correlated with a second confirming source.

If I provide you with a authentic source that says that less gasoline is being used do you accept that as a fact and not propaganda?

Do you accept the fact that if less gasoline in purchased that it more than likely means lower gas tax revenues?

You keep saying that gas tax revenue is going up but are you not shading the truth if the point is that the gas tax is not keeping pace with construction costs?

If gas tax revenues are going up by 1 or 2% but construction costs are going up by 15% what does that mean?

and now we have direct evidence that the latest data is showing a downturn in gasoline sales.

and the NET result is less money for new roads.

which leads directly to the question of how new roads will be funded.

re: toll road revenues are down

yes – but just keep in mind – that the companies that do toll roads are thinking 50-80 year time-frames and their projections include current experience with toll roads in countries where gasoline is $8 a gallon and more – and there is still adequate traffic for toll revenues.

and what happens when the gas tax no longer provides ANY money for new roads?

For myself – I choose tolls over higher taxes.

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Bob

June 21, 2008

“Do you accept the fact that if less gasoline in purchased that it more than likely means lower gas tax revenues?”

It depends on the method of collection. In Virginia, that would mean less statewide gas tax, but more NOVA gas tax. Thanks to high prices, NOVA’s gas tax revenue doubled over the past 5 years (appx. $20m to $50m). So the system is not broken. Moving to a percentage of price gas tax is certainly superior to tolling (I have practical problems with going down that road, but if it’s needed, I’m fine with it).

Let’s just look at USDOT’s statements on the issue. I’ll summarize:
“Oh no! 30 billion fewer vehicle miles traveled! We need tolls!” (full press release from former toll road employee). Thirty billion drop sure sounds scary, doesn’t it?

Facts: VMT estimates are down 2.1% for the year. The economy is down. Most indicators of economic activity (except exports) are down about the same amount. This is no surprise. But look what happens when you take a long view of the numbers:

2004 920.6b travel, gas $1.87
2008 934.8b travel, gas $4.01

The correlation of price jump to VMT doom just isn’t there.

Sources: VMT / gas prices

But even this is only looking at individual travel, and doesn’t count commercial travel which pays even more in taxes. Let’s look at the whole numbers in context:

2002: 2828.9 billion VMT, gas $1.34
2007 3,009.4 billion VMT, gas $2.97
2008 2981.8 billion VMT, gas $4.01

Yeah, that 30 billion drop doesn’t sound very scary when you point out it’s dropping out of 3,000 billion. Gasoline prices are up 34.7% for the year and 300% since 2002. So travel is down 2% from 2007, but long-term it’s still up.

The controlling fact is that revenue is not down in Virginia. Not down, despite all the above.

So I ask Jim Bacon and Larry Gross to read that US DOT press release word-by-word. Who’s the cherry picker? Me, or US DOT? Who’s using a partial set of data to suggest something that is not true?

“You keep saying that gas tax revenue is going up but are you not shading the truth if the point is that the gas tax is not keeping pace with construction costs?”

Construction costs for new schools has gone up as well. So where are the cries that we need a new way to fund schools? Where are the cries that the school funding system is broken? Why don’t we replace the property tax with a Rube Goldberg scheme that’s 15x less efficient? Perhaps go back to the days of Ben Franklin and impose a window-pane tax to fund schools.

You might have an argument for increasing taxes by 1%. But you sure as heck don’t have an argument for raising taxes by 15.6% PLUS 1% by switching to tolls.

Let’s also remember that the gas tax is only one (major) item on the list of two dozen ways the local, state and federal government pick the pockets of drivers.

“yes – but just keep in mind – that the companies that do toll roads are thinking 50-80 year time-frames and their projections include current experience with toll roads in countries where gasoline is $8 a gallon and more – and there is still adequate traffic for toll revenues.”

Ha! Funny you should mention that. All of the projections that toll road companies made for current and recent projects were based on cheap gas. E.g., the Beltway lane estimates were based on 2004 gas ($1.87). They aren’t even open yet. Newly opened roads like CTRMA in Austin were based on $1.33 gas prices. Their business models are in deep trouble, and only now the stock market is beginning to wake up and punish these companies (Transurban and Macquarie).

“For myself – I choose tolls over higher taxes.”

Tolls are higher taxes.

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Bacon's Rebellion

Kaine Defends His Record on Transportation/Land Use

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Kaine Defends His Record on Transportation/Land Use

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