Gov. Timothy M. Kaine is making a new sales pitch to raise taxes for transportation: Keeping Virginia competitive in a global economy. As the Associated Press reports from Roanoke:
Virginia can thrive in the 21st century’s global marketplace with an international airport and a major port but will falter if it cannot provide road and rail access to both, Gov. Timothy M. Kaine said Tuesday. …
The 27 million passenger visits a year at Dulles International Airport in northern Virginia could be increased to 50 million, Kaine said, but more roads and rail access are needed in the traffic-clogged region. The same is true of Hampton Roads, he said, where the port could become the busiest in the nation with dredging to accommodate even bigger ships. “Are we going to be winners, or are we going to leave these great assets withering and dying?” he said.
Kaine raises a legitimate point: Virginia must bend every effort to maintain its economic competitiveness. That’s always been the dominant theme of Bacon’s Rebellion. So, let’s give the Governor the benefit of the doubt and examine his proposal to raise taxes by $1 billion a year to build the kinds of transportation projects he says will do the trick.
If someone gave you $1 billion a year to increase competitiveness, dear reader, would you spend it all on roads? Or would you spend some of it on education? Or R&D? Or recruiting and building industry clusters? Or, here’s a thought… on cutting taxes?
The problem is that there is no way to evaluate the cost-effectiveness of competing proposals in the absence of a Return on Investment analysis. What is the ROI on upgrading U.S. 460 between Petersburg and Suffolk? No one has calculated such a number, but it apparently is not very high. We know this because three competing proposals from the private sector all say that tolls alone cannot pay for the project. If the Virginia ports, trucking companies, shippers of manufactured goods and the residents of Hampton Roads are not willing to pay tolls sufficient to finance the project, why should the Commonwealth tax its citizens?
Because the $1 billion project would create jobs? So would $1 billion spent in other ways.
Because a more free-flowing port would make warehousing/distribution and manufacturing in Southside more competitive? Fine, that’s a reasonable argument. But let’s see the spreadsheet. How many facilities would Virginia attract with an upgraded U.S. 460 vs. the number we could attract with the old U.S. 460? How does that compare to economic activity that would be generated by letting taxpayers keep the money in their pockets?
Economic development is a worthy cause — perhaps the most worthy of causes. But it does not come from the missallocation of investment capital by the political process, subject as it is to manipulation by special interests.
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