Bacon's Rebellion

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More Monkey Business: Update on that $180 Million

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by

James A. Bacon
in

It looks like we have more than a misunderstanding on our hands: GOP legislators and the Kaine administration are spoiling for a fight. The Free Lance-Star and Examiner.com have the latest details (slightly updated from our account Tuesday) on the disposition of $180 million set aside for transportation projects this year.

Here’s how the debate stands: GOPpers are outraged that Gov. Timothy M. Kaine would remove the desperately needed transportation funds from the budget. Kainiacs respond that the roads aren’t ready to build yet, and the funds will be restored in 2010 when the projects are ready to proceed. GOPpers retort that Kaine’s 2010 revenue forecasts are too optimistic and the money may not be there when 2010 rolls around — but Kaine will be gone, and it will be someone else’s problem.

Bacon’s bottom line: That’s what you get when you fund transportation projects out of the General Fund. That’s why we need a segregated funding source for transportation (based on user-pays principles) and there needs to be a constitutional lockbox to prevent this kind of monkeying around.

Question of the day: What ever happened to the constitutional lockbox for the Transportation Trust Fund? Apparently, it died a poor orphan child in some Senate subcommittee. If the lockbox was so important during Tim Kaine’s gubernatorial campaign, why hasn’t the Governor resurrected it? If transportation funding is so sacred, why haven’t House Republicans reintroduced the lockbox legislation?

(Photo credit: Freeslideshow.com.)

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6 responses to “More Monkey Business: Update on that $180 Million”

  1. Anonymous Avatar
    Anonymous

    Indeed. It’s wrong to raid the Transportation Trust Fund to cover General Fund operations, as happened in the past, and equally foolish to expect the General Fund to cover the building of roads, which is what is going on here. The users should pay. What this demonstrates is nobody can really be trusted in this regard — the games are too easy to play.

    You pay for roads the way you pay the builder on a house — in installments as milestones are met. I do not doubt that the $180 million in question will not get spent until 2010 even if all the projects are fully on time. But if the Republicans want to grandstand, fine — now of course, they need to cut $180 million GF out of the early years in the budget (but this gives them another $180 million to spend in the final year of the proposed budget.) How they use that $180 million will be a very intersting test of their fiscal conservative bona fides. I say leave it in reserve — don’t spend it. (HA! FAT CHANCE!)

    Their concerns/complaints that the money might not be there in 2010 were largely hollow because the projects will be under contract. But in reality, no matter what they do in the ’08 session, new Appropriation Acts will be adopted in ’09 and ’10 and they could change things, too. This is all hype and illusion. No General Assembly can bind a future General Assembly — only the Constitution can.

    The constitutional amendment died because, at the end of the day, both parties, and both chambers, refuse to surrender their authority. They like having room to tap dance. The bond rating agencies like it, too. Some of us worked hard on that because we believed in it. The legislators who swore fealty were winking from the start.

    Now watch them again — the wink this time involves this “Homestead Amendment.” This is the car tax scam all over again — promises which will not be kept.

  2. Larry Gross Avatar
    Larry Gross

    do we have a misunderstanding of what a “lock box” is?

    Isn’t the concept related to revenues that come directly from users and that’s the reason why it is called a transportation trust fund?

    If you appropriate monies out of the general fund.. it does not come from users and yes.. we can have all kinds of arguments about how roads “benefit” everyone just as we can have that same conversation about other General Revenue funding such as education, public, safety, DEQ, etc, etc.

    But the General fund by definition is discretionary and subject to changing priorities.

    Everybody in the GA knows this so why are the R’s pretending to not know it?

    This is the problem with the R’s in Va. They are not about solutions but rather posturing and partisan gimmickry.

    I’m not saying the D’s are not guilty also at times but to be honest, I expect better from the R’s and I think the reason for their decline is that they no longer “produce” but instead “posture” except of course when it comes to social issues and having their idea of “small government” to include telling people how they should live.

    NoVa has come to this conclusion and other areas with fairly sophisticated voters are starting to pull back also.

  3. Groveton Avatar
    Groveton

    “In general, a lock box is P.O. Box that is accessible by the bank. A company may set up a lock box service with their bank for receiving customers payments. The company’s customers send their payments to the P.O. box. Then the bank collects and processes these payments directly depositing them to the company’s account.”.

    Source: Wikipedia

    So, it would be a lockbox when the customers of transportation (i.e., the toll payers) started sending their checks into a bank. The proceeds could then be deposited into accounts that were dedicated to meeting transportation needs in their localities.

    I am not sure what taxes fund the Transportation Trust Fund but I guess that it’s more than the gas tax. If true, it’s not really something that can be “lock boxed”.

    I agree with the need for a transportation fund lock box. The money taken from tolls should be sent to a bank lock box and deposited into teh accounts of the regional transportation authority where the usage occurred. The state legislature should have no ability to get at the money. It should be spent only by the localities.

    And this should be constitutionally guaranteed.

  4. Larry Gross Avatar
    Larry Gross

    well.. until .. we redefine .. the traditional meaning… since the inception of the gas tax, the proceeds from the gas tax have been dedicated to the transportation facilities used by the user payers of the gas tax.

    but the lock box concept was violated when Virginia decided to dedicate 1/2% of the sales tax – not paid by drivers but paid by everyone on every purchase whether they drive on not or how much they drive.
    In Virginia about a 1/3 of the transportation budget comes from 1/2% of the sales tax.

    so .. clearly.. by doing that.. they left the door open for folks to reconsider the justification of the 1/2% .. and more than that.. gave others justification for “borrowing” money if priorities so dictated.

    Some would argue, for instance, that the 1/2% dedicated to transit would instantly solve their problem of finding more money for expansion and operations.

    And I’d bet money that most urban folks – even auto drivers – would sign off on 1/2% going to transit.

    The basic reality is this. The gas tax, if truly limited to gas taxes only ..would have been unable to fully fund road needs quite some time ago.

  5. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    Bond rating agencies? Weren’t they in the news today? Something about losing their credit ratings and how that will adversely affect all those trillions of dollars in corporate and government bonds they insured. Gee, a few low income losers are starting to have quite an impact on the financial market. But wait! Another report presented today indicates that the almost primes, and prime borrowers are starting to default at a greater rate as well.

    Next in the news will be all the cities and counties who won’t be able to maintain their P and I payments because they aren’t getting forcasted revenues from real estate. If they raise taxes, another layer of homeowners take the fall. And the state can’t intervene because they have their own problems of economic ineptness. Bet there are a lot of budget bureaucrats getting figgity right about now. But the politicians think it’s business as usual.

    Oh yea, you ain’t seen nothing yet.

  6. Anonymous Avatar
    Anonymous

    Virginia has become a state where candidates can and do say anything to get elected. They promise more spending on this or that – or no new taxes — or lockboxes — or whatever.

    But then, they walk away from the promises; the media cheers; and the buffoons who vote don’t care.

    I don’t think much of Senator Jim Webb in terms of substance, but I strongly admire him for voting in Congress the way he said he would vote. It’s refreshing to see a person walk his talk. Senator John Warner usually does the same.

    Contrast Webb to Mark Warner. The latter spent part of his fortune telling us that he wouldn’t raise taxes. Mark Warner is too smart of a businessman to have believed that Virginia’s fiscal state was good when he ran for office in 2001. The Internet bubble was bursting. He knew what was going on. But why did he run campaign ad after ad promising he wouldn’t raise taxes? Where was the courage of his convictions?

    Kilgore was so confusing that I’m not sure what he promised. Kaine promised to fight for land use restrictions and to establish a lock box. Yet, once in office, Kaine simply forget about enacting land use changes and the lock box in favor of higher taxes.

    Why is this honorable? Reasonable people can disagree about spending and taxes, but shouldn’t candidates honor their campaign promises? This is not to argue that things never change or that one will always prevail in the legislative arena. But shouldn’t elected officials, be they Democrats or Republicans, walk their campaign talk?

    TMT

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