I’ve been a vocal opponent of Gov. Timothy M. Kaine’s proposal to raise $1 billion in taxes for transportation. And after hearing him address the Virginia Foundation for Research and Economic Education (VA FREE) yesterday, I still oppose his plan. But I believe in giving the devil his due. Kaine made a more lucid case for his tax plan than anything I have read in the voluminous newspaper coverage of the issue. In the interest of elevating the transportation debate to a higher level of discourse, I present his arguments here without my usual commentary.
Kaine’s transportation plan does not hinge upon taxes alone. The Governor acknowledges the need to change the way the system works. Virginia has made good headway in improving the accountability of the Virginia Department of Transportation, and the state has begun connecting transportation and land use decisions. “Five years ago VDOT could not finish a construction on time or on budget,” he said. The Commonwealth Transportation Board could not build a reliable six-year plan — its list of transportation projects bore no relationship to the actual costs of the projects or revenue available to fund them.
Today, VDOT is 1,000 employees leaner and engaging in a round of facility consolidations that will make it even more efficient. The number of projects coming in on time and on budget has reached roughly 90 percent. And the projects listed in the state’s six-year transportation plan, though sharply curtailed, are at least realistic.
As for land use, Kaine said, “We will have more discussions about that next year” — presumably in reference to legislative proposals submitted by the House of Delegates but not acted upon in the September transportation session.
Even with all those reforms, Kaine contends, the transportation system needs more funding. One of the core revenue sources, gas taxes, has been flat since 1986 but construction costs have escalated steadily. In “a growing, thriving state with population growth … the only way to solve our challenges is to find more revenues. … You cannot have an ‘A’ system on a ‘C’ revenue stream.”
The question then becomes: Where do the revenues come from? Kaine does not want transportation to “compete with” schools, health care and other General Fund priorities. Transportation needs its own dedicated revenue sources. Kaine proposes to raise about $1 billion a year through “user based” taxes — on auto insurance, car registrations and auto titling, supplement by abusive driver fines. A competing state Senate plan would rely primarily upon a wholesale gasoline tax.
In setting new tax rates, Kaine compared current Virginia tax rates to those of neighboring states. In most cases, our taxes are lower — often significantly lower. Our 17.5 cent-per-gallon gasoline tax compares to $.30 in North Carolina, $.22 in Washington, D.C., $.245 in Maryland, and $.21 in Tennessee.” Only South Carolina, at $.16, is lower. There are similar discrepencies in the auto titling tax, he argues. Bottom line: Virginia can raise the extra $1 billion a year without raising its transportation taxes any higher than its neighbors.
People who think Virginia can solve its transportation problems without more revenue, Kaine suggested, either “don’t understand economics” or are willfully obscuring reality.
Update: Read Michael Shear’s account of Kaine’s speech in the Washington Post. You’d hardly know we attended the same meeting or heard the same speech. Shear focused exclusively on the political elements of the Governor’s speech, especially the implied criticism of the House of Delegates, and totally ignored the substance of his arguments. It causes me to wonder — what else is Shear leaving out of his stories? Which is a scary thought because Shear is less captive to his partisan/ideological prejudices than many of the reporters covering state politics. What are they leaving out of their stories?
If journalists don’t report the substance of politicians’ arguments — as I have done in this post, even though I don’t agree with them — citizens have no hope of understanding the complex issues that confront them.
Note: I have corrected a couple of facts and typos brought to my attention by readers in the comments section.
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